Alan Gould, co-CEO of ad measuring firm IAG Research, likes to breakfast at restaurants with paper tablecloths. They let him diagram his conversations. So it was at a meeting earlier this month: By the time the coffee cups were drained, he had inked, annotated, and cross-referenced a universe of interlocking and competing ad and media entities alongside the remains of a meal.
Gould's job is to get super-geeked about this stuff. IAG measures how effectively TV ads dent the consciousness of those watching them. Its data are based on continual online surveys of about 2.5 million viewers, who respond to a series of questions about all major broadcast and cable programming, and the ads shown around them. IAG seeks to measure—please forgive the marketing-ese—how "engaged" viewers are with all of it; that is, which commercials and programs they recall and form stronger-than-average attachments to. This quantifies a very fuzzy area of marketing mathematics, and, since IAG sends its clients weekly reports on the performance of both their ads and their competitors', marketers can use the findings to tweak campaigns. Certain spots, says Verizon (VZ ) Senior Vice-President John Harrobin, do better when they appear in comedies than dramas and vice versa; it's a simple task to swap out the nonperformers.
IAG's promise—we can make your advertising work better—broadly echoes that of Web advertising, particularly the text ads that appear alongside search results. It also sounds ridiculously grandiose. But IAG's clients include the big four broadcast networks and many of the largest U.S. advertisers, including all the domestic car companies, Procter & Gamble (PG ), and Toyota (TM ). IAG has focused on TV since its inception in 1999, but it's begun measuring ads on Verizon's mobile service, and deals with major marketers to measure their Web ads are expected soon. "The Holy Grail is to measure people across platforms," says Alan Wurtzel, NBC Universal's president for research. IAG data on Web ads could make big marketers comfortable slinging more ad spending toward the Web, since nothing bolsters the bravery of the modern marketing executive like a data-rich PowerPoint.
Some of IAG's broad results confirm what you already knew. A key indicator of ad effectiveness is how engaged viewers are with the show on which ads appear. Serial dramas such as Lost attract unusually avid audiences. ("If you can't naturally grab viewers with your ad, you want to be in a program" that people are glued to, advises Gould.) Movie ads, thanks to glossy surfaces and celebrity, keep viewers hooked. But other findings surprise. After Lost, IAG's most engaging show among affluent TV viewers last season was the mysteriously (to me, at least) popular CBS (CBS ) sitcom Two and a Half Men. The ad that spurred the highest brand recall in 2006 was one from the sandwich chain Subway, and its Dinner Theater ad series starring comedian Jon Lovitz; No. 2 was a Gillette spot featuring Nascar's Ryan Newman, in which he shaved his #12 on the backs of his racing rivals' heads. Other anomalies float to the surface. Verizon's Harrobin recalls an example of IAG testing the impact of some of its competitors' product placements. When viewers were asked about them, they thought Verizon had been the brand mentioned onscreen. "Which is good and bad," he observes philosophically. But it also left Verizon "mindful" of how to design its own placements.
IAG's Webward moves come as media measurement is changing fast and new means to cull data are emerging. Nielsen now averages the viewership of a TV program's ads. (Gould is no fan of this approach, calling it "blurry," since marketers can't yet divine a specific ad's ratings.) Google and Nielsen have announced plans to meld Nielsen's demographic data with what Google can gather on viewers' behavior from satellite provider EchoStar (DISH ). Yet IAG is further along in convincing clients it has a reasonably accurate measure of which ads resonate. And this helps shape clients' ads. Harrobin says IAG data on cell-phone advertising have given Verizon a path to what works in that largely uncharted terrain. It's useful to imagine mobile as a form of outdoor advertising, he says, which puts a premium on very few words and sharp colors rather than, say, an expressive 30-second spot. As IAG starts measuring Web ads, its data may end up influencing the look and feel of Web advertising itself.
For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia
By Jon Fine