Summary:

Fasten your seat belts for this episode as the Director of the Ehrenberg Bass Institute, Professor Byron Sharp, challenges industry conventions around ad targeting, addressability, ad frequency, media flights and so much more! Byron will get you questioning everything you thought you knew. An episode you won’t soon forget (even if you want to).

Transcript:

Duane: Legends of Media Research is a podcast series featuring interviews with the media industry’s leading researchers, where we go behind the scenes sharing stories from their greatest achievements and challenges. Brought to you by MediaScience, the leader in media and advertising innovation research.

Stay tuned at the end of the podcast for more information about MediaScience, but for now, I’m your host, MediaScience CEO, Dr. Duane Varan. Welcome to another exciting episode of Legends of Media Research. Now, in our last episode, Bruce McColl, the former CMO of Mars, talked about how our next guest challenged and ultimately transformed his worldview, resulting in approach to marketing research that was far more grounded in scientific evidence.
So naturally it only makes sense that this week we’re gonna follow up and introduce you to that culprit [laughs], to the director of the world famous Ehrenberg Bass Institute: Byron Sharp. Byron and I are something of metaphorical twins [laughs]. We both started academic research centers at relatively lesser known cities in Australia.

You know, in Byron’s case out of Adelaide, in my case out of Perth. Around the same time, Byron had a focus on bringing science and marketing together. I had done the same thing with the ‘media and science’ kind of like focus. We both ended up in the same playground with advertising, and so we’re gonna talk a little bit about that today.

What’s ironic about this is that these centers that we both created became global research centers of excellence in both of our spheres, attracting most of the Fortune 500 companies, ultimately as sponsors. Something that elite American Universities find hard to do. In fact, most of those initiatives ultimately fizzle.
And so the fact that these two centers out of Australia were so successful and still are, in Byron’s case, –I mean, mine, I retired in 2015, but Byron is still up and running and doing great and growing from strength to strength every day. So it’s great. Now, the irony of it is that when I say ‘metaphorical twins’, the reason I say that is we started these centers at the same time.

We had similar profiles in terms of what we built, and now, ultimately in the latest, global rankings of advertising research, Byron and I came out equal seven. So we both tied [laughs]. So that’s truly ironic. And in fact, Byron, in your case, an extra congratulations because in that exercise that had been done a decade earlier, the Ranking of Global Academics and Advertising, 10 years earlier, it was actually Andrew Ehrenberg who ranked seventh. And so you truly have… [laughs] So you’re truly his successor.

[laugh]

Now for the benefit of the audience, we’re talking here about Andrew Ehrenberg, who Byron’s Research Center is partially named after. Andrew was another legend, an early pioneer of an approach to marketing research that was truly grounded in science, looking for repeatable and replicable patterns.

So Byron, how did you and Andrew start collaborating together and how did that evolve into the growth of your research center out of Adelaide?

Byron: Actually, a funny story. I mean, I read Andrew Ehrenberg’s stuff when I was a master’s student, where I read anything that had the word ‘brand’ in it, and I actually…

I remember putting most of his articles, I put on a little side folder, which I sort of marked as ‘this stuff I think is really important, but I don’t really understand it cause it’s so different’. [laughs] But afterwards I got… I started to realize this was, this was proper science. I think someone suggested that I signed a journal that was about doing replications and things and I think, you know, retesting studies and seeing where they generalized.

And someone suggested, ‘why don’t you ask Andrew if we’d be on editorial board?’ I was like: ‘oh, I don’t know’. I don’t know if I wrote a letter or email or something, but he responded immediately. And then we started collaborating, Rachel Kennedy, I think went over for about half a year in London and…

You know, Andrew had been funded by industry all his life. He –cause when he, you know, he worked as a sort of consultant research in a sort of marketing analytics agency. And then he beca– but he published while he was doing that. And so when London Business School, I think was their first marketing professor, they looked around and they saw this guy, you know, ‘you can be our marketing professor’.

And he was like: ‘okay… I haven’t actually, I don’t actually have a degree in marketing. I’ve just sort of fallen into it’. And they’re like: ‘well, you publish good stuff’. But he quickly went: ‘I’m not very good teacher. [laughs] Is it okay if I just do research?’ And they went: ‘oh, wow, if you can fund it’. And so that’s when Andrew reached out the industry and said: ‘you know, I will write reports on findings for you.

Can you fund me a bit?’ And that was what was called the R&D initiative in marketing, and Andrew asked me if I could take over that. He was pretty sure that I would move to London, which I was not going to do. And I said: ‘no, I think we can run it from Adelaide’.

I remember Andrew explaining to his dean of research that he said: ‘I run– I’ve got a few people, they’re all retired and they’re working with me. And Byron’s got down in Australia. He’s gotten sort of the opposite of that’. The dean went: ‘well, opposite of retirement home what? Kindergarten?’

[Duane laughs]

And we were very young and self-taught [Duane laughs], but we had that same ethos of doing, you know… we peer review our questions a lot, like: ‘Is that worth?’, you know, particularly when we’re giving a topic to a new Master’s or PhD student. I feel there’s an ethical thing of like: ‘no, just cause this is fashionable in the literature or something at the moment.

You’re gonna spend three years of your life on this. Are you gonna come out with some findings that if you stand up on a stage in an industry conference, people are gonna say “oh, that’s interesting and useful”. Not: “oh, well that’s very academic”. So we peer review, make sure that we’re studying important things.

And so that, yeah, that ethos is undermined everything. And, you know, we believe in advertising and we’ve got more and more famous, and therefore we’re supported by corporations all around the world.

[music]

Duane:It’s a great story. It’s remarkable that more university centers haven’t tried to emulate your model. You have a successful model. You would think that there would be more appetite and ambition for kind of like replicating that model.

Byron: People love the idea. We’d love to have sponsors.

You have, you have people who just support. They just give you money. They give you money every year and they don’t, we don’t have to do anything that: ‘oh, we’d love to do that’. And I go: ‘well, that’s fine. Just make some discoveries and then go out to an industry conference, stand on stage and just tell ’em the discovery, and if it’s a worthy thing, you will find people are very happy to support you’.

But of course: ‘that’s the problem. I haven’t got discoveries’.

[laughs]

Duane: So much of the work that you’ve done, and we will talk a little bit about this throughout the podcast, but you’ve done a lot of work that is disruptive. That has taken convention and that’s challenged convention and I feel that often academics are just reinforcing the convention.

They’re just trying to find, you know, more support for something that’s already kind of like assumed in the market rather than really testing and kind of like challenging some of the prevailing views.

Duane: It might help the audience if we use a concrete example. So I’ll help, I’ll help prime this with an example, you know, when…

Duane: Well, one of the things that I think was really shocking is I remember one of our clients required us to go through their brand school.

This is, yeah, I won’t name them specifically, but this is one of the largest marketeers in the world. You know, definitely somebody that everybody would look up to in terms of, you know, this is where you would find the way to do good marketing. And as part of the background to the project, our team had to go through their brand school, and I remember that in the brand school, probably the central most important thing you learned was the application of the Pareto principle.

You know that there’s 20% of the market, which represents 80% of your value, and so that is the group that you should target. So good advertising is about finding that 20%. Going after that 20% and communicating with that 20%.

Forget about the 80%, the 80% no value, that 80%, you know, not worth the effort. Focus on the 20%. That’s where you’re going to maximize your, your effect. And, and of course that view is still prevalent in a lot of circles. And then of course, these Ehrenberg Bass people come along [laughs] and they turn that assumption on its head by correctly pointing out: ‘where does your growth come from? Is your growth gonna come from that 20%?’ So, you know, maybe you can, you can speak to this side of this principle.

Duane: And that particular principle I think had shockwaves in the industry. Again, because if you have a convention that everybody accepts as gospel, and then somebody comes along and challenges it, and particularly challenges it with evidence, which of course invites the question: ‘well, okay, well let’s go look at our evidence’.

And then suddenly you start to question: ‘well, is that really what our evidence has been saying?’ [laughs] You know, like it–

Duane: So if you’re at an organization that still applies the Pareto principle to your targeting, I think, based on Byron’s advice, you’d be good to look and explore what the real numbers are, rather than just accepting that as a principle. Is it really the fact that your top 20% of customers are giving you 80% of your value, or is it more like 50%?

And then of course also ask yourself the question ‘where your growth is coming from’. But a great example again, of where we’re challenging or not just accepting industry conventions.

[music]

So you built a center together with your colleagues that was, applying empirical generalization, you know, the ability to searching–

Duane: Yep. Yep. Searching for those repeatable patterns and drawing those scientific laws that you could apply to many circumstances.

But of course, a lot– I mean, while much of that was published, there was a lot of that that was happening, kind of like, you know, within the confines of the community of sponsors that you bill to, were gaining access to those insights before they were published. But I think the big turning point for the institute, really, probably came with your book ‘How Brands Grow’.

Duane: So, I mean, a lot of people within your community of sponsors, of course, knew what you were doing and were really impressed, but the world at large hadn’t yet discovered that. And then you wrote your book. I, of course, because I know you personally, and I know a little bit of this story maybe…

You know, you really were a reluctant author, [Byron laughs] which is very unconventional for an academic, but you were really a reluctant author of the book. Maybe you could tell us a little bit of the backstory about how the book came to be.

Byron: [Byron laughs] Yes, it humbling story. The institute has advisory boards in North America and Europe and Australasia, and it might have been the European Board who started this and then the Americans endorsed it.

You know, they said: ‘we need you to write a book to help us in the transformation’. Well actually, first of all, they told us something that was quite shocking. Well, it was shocking to me. They said: ‘we don’t actually sponsor you for the reports, [laughs] for the new report’. It was like: ‘no, no, no, no, no. You gotta keep doing that.

You gotta keep making discoveries. But the real reason we sponsor you is just to be close to the thinking, close to the research, and for you to help us on this transformation. As we try to pull these principles into the organization and change practice. And so it’s a sort of a journey from sort of anything goes marketing to evidence based marketing, and we need to be close to you to do that and you need to help us.

And one of the things you could do to help us would be… could you write a book on just the early fundamental findings, you know, and what they mean and, you know, something that we could give to the CEO and say “we’re making changes in marketing”, you know, again. But this time there’s some science and rigor behind it.
Okay. So, you know, it should be a hardback and you should have a nice prestigious publisher and things, which is why, you know, we have Oxford University for. So I always joked they’re not too shabby as a publisher.

So that, you know, that was the brief. Do this hardback book that covers the early and Elké, who was the commercial director, but she’s executive officer on the board, she sort of rolled her eyes going: ‘well ,that’s not gonna happen, they’re not going to do that’. [Duane laughs]

‘Cause you know, she knew we were academics, you know, always on the new things and writing new papers and wouldn’t wanna do that hard slogan. That what we do. But the problem is if you have a board, advisory board and they give you good advice, then you have to follow it.

It took about three years of writing. Fortunately, a lot of the material was honed by doing presentations to sponsors. Some of the book chat business came off keynote slides that had been– So I knew I had the material and I thought probably is good that this is written up.

It won’t be a best seller or anything, but it’ll be the sort of book that, you know, sells for many decades. That what I thought. So, you know, I got everything wrong really. [laughter] As far as forecasting.

So because, yeah, it really surprisingly took off. And I guess that’s about what you said before, that just some of the things were a bit shocking and so people had to find out they had to read this book, even if it was to later burn it or something, you know, the original digital, I’ll read this and then burn it.

But it started a bit of a revolution and find things to…

[music]

Duane: Byron, you cover a lot of ground, of course, in the book and in the larger body of work that the institute has done, and that really covers the full marketing gambit. But of course you deal specifically with advertising within that larger framework, if you will.

Maybe you can share with us some of the things that you’ve learned, over the decades now of research that the institute has been doing about how advertising works. What has the institute discovered about how successful advertising works?

Byron: Well, unlike you, we were not advertising people.

So, you know, our background was studying buyer behavior and brand performance. So when we started, we… I did the right thing, I think, which is you should, if you’re not in from the industry and stuff, you should be humble, first of all, and just go and check, because I did not want us doing sort of some research and then standing up and in front of someone like you and you going:

‘Yeah, we did that 15 years ago. Like, you know, that’s no one’. [Duane laughs] So the first thing we did, and I think this was Sam Hake who went on to work for the ABC and Network 10 and stuff, but, she did interviews with media buyers, with lots of interviews with media buyers and asking them like: ‘how do you make your decisions and what knowledge do you use?’

And that was quite motivating because if, to summarize that research, an awful lot of people went: ‘I don’t know. I, you know, the person before me gave me two weeks training before they left’. [laughter] ‘We just do it like this’. And we realized it was really craft based. I remember when we asked about what sort of scientific evidence is on at the moment, the biggest one that came out was the rule of three.

You gotta have three exposures. And so we went, wow. You know, the most used principle is actually wrong. [Duane laughs] And there’s hardly any, hardly any principles used and the one that’s most used is wrong. So we– that was quite motivating, made us feel we can make a contribution here. And yeah, so I don’t know.

I wouldn’t think of myself as an advertising researcher, but apparently the metrics say that we are. Well, I think it was good to start from that humble base. So we started just looking at basic patterns about how people buy and how people view, so in How Brands Grow I’m quite proud of the advertising chapter because it says that, you know, advertising is not simple.

It can work in multiple ways. Knowing this to make out five different mechanisms I think that are outlined there and you know, and potentially I can work in, you know, multiple of those things. But the dominant previous view was very much one from sales people that advertising, you know, grabs a person and tears.

You know, ‘Pepsi is the choice of the new generation, Coca-Cola is all wrong. Completely change your mind. Stop that. Don’t buy Coke anymore. Now buy Pepsi’.

When you look at the patterns of buyer behavior, you go, that’s just fanciful, that doesn’t happen, this religious conversions don’t happen. [laughs]

Advertisements hitting people with a feather, it’s a little subtle change in their memory structures. And that led to Jenny and I putting out the concept of ‘mental availability’ and saying that the marketing literature was just attitude obsessed and wasn’t noticing that it had, it just sort of assumed that awareness was something like–

Awareness was something like: ‘you know, brands like Coca-Cola don’t worry about awareness anymore because everyone knows about Coca-Cola’. So, you know, there’s no reason to advertise unless you can do an ad that is gonna religiously convert the Pepsi drinker to you. Nonsense. It’s a constant battle for mental availability and for building new memory structures.

To tell a funny story, I was with the growth officer, I think it was called Chief Growth Officers for Coca-Cola, and just being pointed and, I said: “coffee”. Coffee consumption became huge and coffee bars, right? Which is a caffeine drink. Is a drinking situation. It’s a caffeine drinking situation.

And people sit down in a Starbucks or something and they don’t think of cola. So you’ve got great awareness and things, but your mental availability in the situation is just miserable. And that’s a link you need to work on. And I do remember, I don’t know where it was, somewhere in the world, they were starting that–

They had a picture of the silhouette. It was a black and white silhouette of a Coke bottle. And the words were “The Original Long Black”, [Duane laughs] which I thought was really cool.
But the story, I thought was quite good because he listened to me with a very straight face and three weeks later it was announced that Coca-Cola had bought Costa Coffee chain, which obviously he knew.

And, you know, there’s a billion dollar purchase that probably going on for many, many months. That’s the difference in awareness and mental availability. You can be aware of Coke, but you can be in a buying situation, which is like ‘coffee shop’ and then just, you just don’t think of them then. Well, that’s a marketing problem to fix and broaden that mental availability and that’s how advertising works.

By building these memory structures, that just gives someone more of a chance that when they sit down in the Starbucks, they go: ‘actually, I want– it’s a bit hot. I want something, actually, I’ll have a Coke’. It’s advertising that does that millions more people have just a little bit more chance of that.

Whereas 10 years earlier they sat down on the Starbucks and they didn’t think of that. And you ask people: ‘would the advertising affect you?’ And of course they say: ‘nah, not really’. Because it doesn’t feel like it affects you! They haven’t changed their view of Coca Cola. They never remembered sitting in front of the TV and going: ‘oh my God, next time in Starbucks I’ve gotta order a Coke’.

It didn’t work like that. It was very subtle, and so then you realize that, wow, our advertising, it needs to always be on because, you know, every day people are sitting down in a consumption situation.

[music]

Duane: And we might dive on that, because that’s another one of those areas where the institute kind of challenged the convention, the idea about what the optimal or what the right flight was for advertising. Maybe you could share a little bit about that as well.

Byron: Okay. Well, that just fits with the low propensity that most of your buyers are very, very infrequent.
But every day someone buys. You never know when they’re gonna come into the market. Technically it’s a plus on distribution. Someone can go buy, buy, buy, and then nothing follow over, and then buy, then nothing, then buy. It’s ike rain drops hitting a pavement.

Even though every five minutes the same amount of drops may fall, when they fall. Exactly. The timing intervals– impossible, right? It’s very random, but you know, everyday people buy. So really, do you ever want be off there? No. As far as your budget will go, you want to always be advertised. It took us an embarrassingly long time for us to convert the research results to a practical principle, which was in general, adjusting for seasonality.

Every month you should spend about a 12th of your budget. Every week, about a 50th. Spray it out. The most important media principle is to spread it out. You always get more rich for your dollar, then it’s very wasteful. And the single source research shows this and it’s really– if someone’s sitting down in front of TV and they see your ad, great.

If you hit them again tonight, you don’t get so much a thing. And well, that’s fine if you’ve got a massive budget, but if you haven’t got a massive budget, you better just save that second exposure for tomorrow, next week, or another person. Some people say to us, the Ehrenberg Bass Institute’s had such a huge influence on practice, but I actually use that as one example of going: ‘Really?

I don’t think so’, because you watch TV tonight or listen to radio, whatever, you’ll hear or see the same ad multiple times and then a week later do it and you won’t want to do that at all.

Duane: Yeah, I think there has definitely been a convention that it’s almost wasteful to do what you’re describing, Byron. Which is it’s wasteful to spread it out, and that the more effective thing to do is to concentrate in little bursts, even if that means you only might have four bursts in a year, you focus and get those four bursts and then, and don’t worry about it because it’s so effective that it’s going– but as, as you say…

Byron: It’s gonna work by magic all the other times for the people that never saw it. The people who never saw your ad will somehow be magically affected [laughs] by the people who saw it eight times.

Duane: But I mean, the assumption here is also that there’s a minimum frequency required for any effect to happen in the first place. And that if you don’t get sufficient frequency, you’re essentially wasting your money. And I mean, there are companies that specialize in providing the recipes for these minimum spend levels.

Byron: Look, this really dawned on me when I saw a tracking company present to a major firm and they showed this, you’ve gotta have this many GRPs or something. I went: ‘that’s just your, it’s your method. It’s because you interview, you know, 50 people every week and then you aggregate the data up and smooth it.

You need a big turn on on advertising and a big turn off for your needle to move, and then you translate that. So a recommendation to the client– GRP below, basically what you’re saying is GRP below this level don’t work.

Duane: I think the curse also of the GRP… You know I hate the metric.

And one of the reasons I hate it is because by inherent in it is this assumption that frequency and reach are one and the same. You report them both equally. And of course getting reach is wonderful, but getting frequency, it’s not the same as reach. It’s something very, very different in character.

And you can achieve the same GRP with very little reach and very high frequency with very little effect, you know? So, um, yeah. I think one of the things going back though to the evidence–

Byron: Certain media, like, you know, like radio things love the frequency idea because they could deliver frequency really well. [laughs]

And the idea that people might not want it and might want to discount it for lots of frequency.

[music]

Duane: Going back to the evidence, because again, I think what makes Eherenberg Bass work, the secret to its success ultimately is, at the end of the day, it’s evidence. The evidence based approach. You know, I think one of the things that you’ve achieved, which has been instrumental to your rise and your growth has been the access to single source data in particular. That single source data has been such a valuable kind of like, component of the evidence that you’ve been able to put forward around questions like, ‘what is the impact of flight’, you know?

Duane: Absolutely.

Byron: Sorry, sorry. By single source what I mean is that you are measuring for the same individual, their advertising exposure and their behavior.

And we need better than– we need, even more than that. We need data on like, consumption because you know, sometimes the effect of an ad is that you then go to the fridge and pull something outta the fridge.

Duane: Right.

Byron: That it makes you remember the thing that you just pulled out of the fridge. The advertising reminds you that that was actually the brand.

Duane: It’s a great point. It’s a great point. You know, for all the data that is multiplying exponentially, it’s remarkable how little good data is actually growing in that mix. [laughs] But, you know, one of the–

Byron: Too much stuff, that’s too much stuff that’s siloed or that’s brought together by only statistical means so that, you know. It’s not single source really, it’s not the same individual.

Duane: One of the things that Ehrenberg Bass has achieved, which I think other academic research centers would really benefit from learning from, is the relationship that you’ve been able to build with your sponsors. Oftentimes, the way that that would work in terms of an interchange between industry and academia would be that, you know, academics would do their own research, kind of, and then they would kind of like pitch that or ask the industry to sponsor it or something along those lines.

But one of the things that’s remarkable about what you were able to do is you were able to build relationships where those brands trusted you enough to share their data with you. And, you know, again, you built these unique relationships which have a publishing dimension to them, but which also. Provide for confidentiality around certain layers of that research. Obviously nobody’s gonna share that information if not. How have you been able to go to a brand and to gain access to their golden jewels? This incredibly extensive and valuable data that they have around the performance of their product and the market and stuff.

How have you been able to convince so many, in many cases, competing brands even, to share that with you?

Byron: I remember the first work we did, on share of voice– share of market relationship, and a very large soft drink company I won’t name said: ‘we’d like to look at this, we’d like to know about spending our budgets and knowing how much’, and we went: ‘well you must have like, Nielsen-type data and a tracking…

Yep. Great. Yes. Excellent. But then as soon as they went to their, you know, provider of that sort of data, who they presumably pay hundreds of millions of dollars a year to, that provider went: ‘you want what, five years? We archive it after three’. Archive as a euphemistic, meaning it’s gone. So there are practical things that actually make quite hard to get data.

And I think a lot of people in the industry sort of realize this too, that when they say they have lots of data, they’re like: ‘well, it’s all over the place. It’s messy or it’s lost, or we are not getting very much value from it’. I think is the probably the biggest. They’re willing to give over data because all this data could be worth something, but actually it isn’t at the moment.

And if you could make it worth something that tended into something that would, that could help my position, that would be fantastic.

Duane: There have been brands, for example, who were well known in the industry for maintaining these single source panels, and then they walked away from it. I always found that very, very odd. What do you think motivated that decision?

Byron: You turned out the collapse of Project Apollo, which was…

Duane: Oh, that was one for sure. [laughs]

Byron: Yes. That was a good example of, well, there’s all sorts of different things. I mean, it depended on two rival research agencies working together.
And you could say that neither of them had a great vested interest in it. Surviving, but they did it because P&G and others, you know, sort of told them to, yes, it was very expensive, but that doesn’t matter if you’re getting value out of it. But I don’t think people– people hadn’t done their framework festival to work out what the value was.

They hadn’t even educated the marketers to what sort of questions can you solve with this? So at a certain point it’s like, well wait, the next stage of this will cost a hundred million dollars. You don’t even know what to do with the data that’s come out of the… so far. So that’s one of the agendas of the Ehrenberg Bass institute, to explain to people the power of single source data and being able to test your creativity and then start to learn about media principles.

When people understand that, then there’ll be a lot, it’ll be a lot easier to justify spending the money to gain that data. ‘Cause things to record what people are doing are getting more and more ubiquitous and much cheaper. You know, we’ve got lots more non-invasive ways of measuring consumer behavior.

We don’t require them to do work, and we don’t require them to fill in surveys.

[music]

Duane: Now, Byron, these days, there’s a lot of shift, maybe, in prioritization for performance based measures. If you think about brand equity, brand equity is probably suffering in the mix, I would say. Particularly because of the ways in which it’s measured. There has been this movement towards the things that are more easily measured, and that is leading to more performance measured objectives, if you will.

But it seems, and certainly a lot of the work that we’ve done is highlighting that this is hugely problematic for a brand. That brands are actually making a colossal mistake, which they won’t fully appreciate or understand because of the length of time that it takes for these effects to kind of like show up.

What is your research at the Ehrenberg Bass showing on this really crucial question around brand equity versus performance metrics?

[laughs]

Byron: We were on a bit of an agenda at the moment to try to clear up this misunderstanding between performance activation– terrible word ‘activation’. It’s like… [Duane laighs]

Like it implies that I can say something like ‘20% off lawn mowers this month’ to you who is not in the market, I’m assuming, for a lawn mower, ‘cause most of us already have one, but suddenly you are ‘activated’. [laughs]

There’s just no way you can activate someone who’s not in the market for lawn mowers. That sort of stuff is like, what tells people we used to do with this in-store displays and things. Someone has walked up to the fridge or the shelf ‘cause they wanna buy the category. And your Google Search or yourperformance advertising is about trying to capture more than your fair share.

You know, you’re a 10% brand. Well, no, you want to grab 12% or 15% of the people who are coming there. You’re not activating them, you’re just trying to grab them at the last moment. There’s that stuff, and then there’s that we know that we do something else that helps expand the category and helps expand our long term market share and reaches people who, you know, aren’t in the market yet.

And the problem is we always// we never really knew how that worked. And so we called it this mysterious brand equity thing. Something about: ‘oh, well this is gonna make people, it’s gonna make our brand cool, or it’s gonna make people feel better about it’. And I think a lot of CFOs and CEOs went: ‘so basically you’re telling me it’s unmeasurable mumbo jumbo, and I’ve just gotta trust you’.

They didn’t like that. They didn’t like that. And then they liked the performance stuff ‘cause at least, you know, it’s measurable. The difference is the real advertising is reaching brains that aren’t in the market. And it’s just, you know, subtly laying down some memory structures so when they do, it’ll help the performance stuff, right?

‘Cause when the ad bounces up on your screen, you go: ‘oh, I know that brand’. So it’ll help that work. But also people, it’s still an enormous amount of buying is done on memory. Lots of us don’t like McDonald’s. Don’t really like McDonald’s food.

We hardly ever buy McDonald’s, but we do actually know a hell of a lot about McDonald’s and it does mean that occasionally, uh, yeah, we buy McDonald’s.

I mean, I know a lot of– I’m a very, very infrequent McDonald’s, but I know what’s on their menu. I know pretty much how the prices work. I know where their stores are. I know which ones have parking. I know that they have toilets. It’s like, wow, you know, you’re a pretty infrequent buyer.

Like, yeah. Well, McDonald’s has done a really great job with its advertising. It is. It’s got fantastic mental availability. It’s even taught people who can have breakfast at McDonald’s now. Yeah. It’s taught people who can get coffee at McDonald’s now.

That’s what advertising does. I mean, McDonald’s also does performance thing, which is $1 shakes this thing, but that only catches people who are really walking past the store.

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Duane: Another area where the institute holds somewhat controversial views perhaps is in the promise that that industry is currently really excited about around addressable advertising. You haven’t been as enthusiastic about adjustability.

Why is that?

Byron: For an awful lot of brands, you don’t need an awful lot of targeting.

I mean, your segmentation should be big, obvious things. If it’s not big, obvious things that affect buying behavior, then they’re not practical and useful. No one, I think, no one, puts into their segmentation length of fingernail, unless maybe selling nail polish or something, because we get length of fingernails is not gonna affect your, credit card purchase or preference or what size car you have or– we only use big, practical things. And the big practical things tend to be the really most important is where do people live. So addressability is pretty good for that.

It’s cool. Gives us geographical targeting things, which, yeah, that’s great. Then, for some brands gender matters, men’s clothing, women’s clothing, but for a lot of brands it doesn’t matter. How many people are in the household or how much money they have. Or if you’re a B2B marketer, how many employees does that company have?

What’s its turnover? These are big things. And then after that, usually there’s not really that much that you really need. So if you’re selling, I think Bruce McCall said as well from Mars, if you said, we’re selling to about– there’s about 7 billion people on the planet.

When you look at the stuff we sell, we can sell it to pretty much all of them. You could go, ‘well, you’re not gonna buy dog food if you don’t have a dog, but even people who don’t have a dog are probably gonna have one in the future’. So we pretty much like to reach everyone. We’re not gonna do a lot of targeting.

We will do some customization. We’re obviously gonna do, you know, in Brazil the ads will be in Portuguese. In Canada, they’ll be in English, but in Quebec, maybe they’ll be in French. We’ll do that. Those big things. So I’m not anti-addressability, but I saw a thing from Dunham and Pierce that they analyzed something like 10,000 DNA, which is just you, science and knowing stuff.

What they mean is characteristics about the household and the person. I’m like: ‘you don’t need 10,000. You need, where do they live? How many mouths in the house?’

Duane: You mentioned the dog food example. Certainly I think that is the holy grail that most advertisers who look at addressability seem to be pursuing, which is that assumption again of getting the category buyers– you know, targeting the category buyers.

Byron: Yeah. I don’t wanna put an ad to someone who doesn’t have a dog or a cat.

Duane: I don’t wanna have an ad to a person who doesn’t have a dog. Yeah. And, and the assumption–

Byron: …often is that panel data. So in the pet food industry, go look at some panel data.

And some of them may have done this already, and they’re quite shocked about how many people at the end of the year like, have a pet that didn’t have one at the start of the year, or they had one at the start of the year, but they don’t at the end of the year. It’s quite a lot of turnover in that.

And then there are people who still buy pet food for, you know, ‘cause their neighbors ask them to feed the cat or so.

Duane: Right. Good point.

Byron: It’s pretty broad. It’s usually a broader market than you’d think. I like using the example of luxury watches. You’d think luxury watches would only– these are watches that cost like 15,000 euro plus and you think, well, who’s gonna–? They could buy a car for that!

So, who’s gonna buy? It’s only billionaires. Right? So you’d think that if you’re a luxury watch marketer, you’d put ads in what? First class lounges of airports? And then pretty much anywhere else would be wastage. Right? So people like me would never see a luxury watch ad. I see lots of luxury watch ads.

Clearly they go quite broad. And the reason they go quite broad is they go, yeah, billionaires are more likely to buy a luxury watch, but there’s only a few thousand of them on the planet. Most of our sales go to people who aren’t billionaires. And we don’t know who they are. We don’t know where they are, but some people just like really beautiful, crafted watches.

Some people go: ‘I’d never buy a luxury car’, but they’ve got a beautiful luxury watch. The real world is a weird place. Human beings are delightfully unpredictable. You can get carried away thinking that if you have more and more little segmentation variables, you’re gonna be able to predict better.

But all the forecasting scientists tell you no, you’re not. Go for simple, simple models predict. Yeah. Which is why if you’re a luxury watch manufacturer and you decide to just try to do hyper targeting one, only people have bought one before, something that’s a really good way to shrink-market.

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Duane: Many of the interviews that I’ve done, certainly to date, have been people who’ve retired. Legends who have retired from the industry. Of course, you’re still in your prime. You still have a lot of juice left in you to squeeze, so to speak. [laughs]. What’s next? What is on your horizon?

You’ve achieved so much in your career to date. The Ehrenberg Bass Institute has really evolved and it really has an enormous impact on the industry. Where to from here? What’s next for you?

Byron: In the media area, and this is something we need to do something together on, Duane.

We need to get people to understand what attention is and what it is not. The reality of the world, the advertising world, is that we live in a world of fleeting exposures. Really most advertising is very fleeting exposures and we need to understand, well, when does ‘fleeting’ work and when does it not?

We don’t even really know. How many people who walk along past a bus shelter ad actually registered the ad? Do we? The analogy I do is it’s like chefs. Chefs from thousands of restaurants every day going out to the markets, to buy produce, to take back to the kitchens, and yet they’re like not allowed to see the fruit. Or there’s like his strawberries where, ‘how much do they cost?’

‘It’s a dollar per “gallooleum”’. What’s a “gallooleum”? It’s a special metric we made up. We’re not telling you. How much is it by kilo? I can’t do it by kilo. What? I don’t even know what I’m getting.

Most of the time we know we are getting space or maybe we know we’re getting an exposure, but I buy these to affect brains.

I’m doing this to nudge memories. That’s what I’m really buying when when I do advertising. How does this radio ad affect a memory compared to this billboard?

And they sold the different markets with different weight things.

Duane: So there’s still a lot of mysteries, still a lot that’s on there.

Byron: Lot of mystery and there are some people running around saying that they can give you the answer to all of this with one statistical model or one artificial intelligence driven… It’s not it.

This is gonna require hard slog and lots of lots of research to push the puzzle together. There’s no magic bullet answer to this question. It’s gonna require lots and lots of different research.

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Duane: What advice would you give to this new generation of advertising media marketing researchers? What would your advice be to this new generation of researchers?

Byron: Well, I was asked by a CEO and she said, we’re doing global search chief marketing officer. And she said, what’s your advice?

What should we be looking for? What, like, new technical skills and things do we need? I said: ‘there’s a huge industry out there that sells things to marketers, that marketers can tap into, right? There’s all these people who have these technical skills. Don’t worry about getting someone who’s, you know, a particular digital skill or something.

Don’t worry. Find someone who is educated, but open minded, but skeptical’. Classic sort of science thing so that they don’t get suckered in by the snake or merchants. But you want someone who’s laser focused on the business needs, on the big goals, and then they’ll find ways of implementing it.

And so I think that’s my advice to younger people. Learn the fundamentals, learn how to speak and explain things to other people. There will be certain technical schools, but adding more and more of those, you’ll be able to link out with other people.

Look, there’s no one in Apple, there’s probably no one single person who knows how to build an iPhone, but iPhones get produced and they’re millions. We’re very good at assemblling people together. In marketing, we do that all the time. We assemble teams of people who have all sorts of different skills.

So yeah, learn the fundamentals and learn how to learn.

Learn how to– how would I work that out? Someone’s making this pitch to me.

How would I work out that this is correct or not? How would I work that out? Having the humility to ask that question and some capacity to answer it. That’s much more important than technical skills.

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Duane: So, Byron, thanks for sharing your insights with us today. I think you’ve given all of us a lot to think about, and I’m sure some will be somewhat uncomfortable as they grapple with some of the ideas that you’ve been advocating. Some will probably wish they never tuned in in the first place. [laughs] Because it’s hard to unhear what you’ve heard.

Just doing a quick recap of some of the controversial ground we’ve covered today, you’ve challenged the Pareto principle of targeting, probably the single most important principle in ad targeting. You’ve rejected the widely held belief that you need at least three exposures for an ad to register. Again, probably the most important principle for media planning.

You reject the practice of concentrating media spend and focus bursts instead, advocating that budgets be spread out to maximize reach. You voice concern for marketeers favoring performance and activation investment over brand equity building, and you’ve questioned advertising’s new holy grail around addressability, particularly around its assumption for targeting based on category usage.

I mean, that’s a lot of ground to cover in one episode. [laughs] But seriously, thank you for joining us today. Of course, we’re huge fans of yours at MediaScience. MediaScience and the institute collaborate extensively. We’ve endowed a professorial chair at the institute, and it’s a collaboration that’s been incredibly effective, not only in the work we do together for industry, but in the research we do in the academic arenas as well.

In fact, a recent meta-analysis of the past 60 years of the Journal of Advertising Research identified the collaboration between MediaScience and the Institute as the most effective in terms of co-authorship in the entire history of the journal, so it’s a true collaboration. So as I say, Byron, we’re huge fans and

I’m thrilled you could join us today.
And I want to thank you, the audience, for joining us today. Remember to follow and subscribe to our podcast, tell your friends about us. Leave your ratings and comments and stick around after the podcast for more information about MediaScience.

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So until our next episode, I’m Dr. Duane Varan, CEO of MediaScience, thanking you for joining us today and inviting you to our next episode of Legends of Media Research.

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Female Voice: Almost every major innovation in the TV advertising industry over the course of the past decade was first tested by MediaScience researchers.

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MediaScience is the leader in media innovation research. So when you are looking for media or advertising innovation research, collaborate with MediaScience.

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