Preparing for the Cliff: What brands need to know to survive and thrive in the e-commerce economy

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The winning impact of cross-cultural and Hispanic themes in advertising

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How does advertising work?  The dominant model for ad success today is based on “salesmanship,” where ads capture conscious attention, communicate benefits, and drive recall. The salesmanship model views the human mind as a calculator, making decisions based on the rational evaluation of costs and benefits. Marketing legend Philip Kotler sums up this perspective well, arguing that ads should “inform, persuade, or remind.”

Of course, marketers have always known that an appeal to reason and logic only gets you so far.  Indeed, advertisers have relied heavily on emotion and psychology since the end of the 19th century.  But until recently, the assumption remained that the point of advertising, whether rational or emotional, was to motivate a conscious process enabling evaluation and recall.

But over the past decade, our understanding of human decision-making has radically changed.  In popular consciousness, the decision-making that precipitated the Great Recession, as well as the rise of social and political bubbles powered by “alternative facts,” are clear indicators that the human mind is by no means a purely rational calculator. And in academia, theories depending on rational choice models and conscious processes have been buried under new evidence for the power of precognitive emotions.

According to the dual system model made famous by Daniel Kahneman, human beings make choices in two ways.  The first stage is the precognitive “System 1” process, formed via innate characteristics, gut feelings, and early experience, as well as sustained or repeated behavior. The second stage uses the intentional “System 2” process, requiring conscious application, logic and evidence.  In some interpretations of dual process theory, System 1 makes all the decisions, with System 2 merely providing ex post facto rationalization. But even if System 2 does some of the work, we now know that the brain can make a decision seven seconds before you know it.

As a marketer, shouldn’t your job be easier armed with these powerful scientific insights? If only: the problem is that if you want to target System 1, marketers must appeal to audiences with multiple, and often opposed, ways of seeing the world that are hard wired into their decision-making processes.

In other words, we are shifting from an advertising paradigm dominated by universal appeals to conscious thought, evidence and logic, towards one where messages resonating with one segment’s precognitive emotions may backfire for another. To make matters worse, conventional metrics and norms focused on awareness and recall appeal to the System 2 processes and thereby provide an incomplete picture.

To help members better market to diverse America, we decided to weigh in with our own proprietary approach which we call AdRate.  In our inaugural AdRate initiative, we incorporated facial tracking technology and machine learning techniques into a survey of almost 4000 consumers.  Using this approach, we can model what works and what does not for different demographics.  We also developed dashboards incorporating innovative “Groundswell,” “Backlash” and “Net Groundswell” metrics that directly measure how consumers’ minds are changed.

For this analysis, we identified what works and what doesn’t across 30 recent ads in two studies. In the first study, we compared the effects of socially inclusive messages, diverse casting, and appeals to traditional American themes, as well as the applications of other content and structural factors.  We found found distinctly different responses for African American and bicultural Hispanics as reported here.

In the second study, we evaluated different strategies for reaching Hispanic audiences, including Spanish functional ads, Spanish-language ads with Hispanic cues, English ads with Hispanic cues and English total market ads.

Findings are in the attached, and our Spanish language findings will be separately detailed in a forthcoming study.

Topline findings from the study are below:

Win with “peak sentimentality”

This emotion represents a mix of sadness and surprise associated with a sudden pang of longing, nostalgia and wistfulness.  We found that across all segments, peak sentimentality is the emotion most predictive of the desire to share an ad with others, the perception that the message is important, and an improvement in the opinion of the brand. Marketers succeed in capturing viewers’ hearts and minds (and wallets) when the ad tells a story that elicits this emotion and ties it to the brand effectively.

Fuse brand and message in the close

We found that ads win with consumer when successfully interweave branding moments and the narrative, especially in the close.  We performed a paired comparison of ads from Honeymade and Tylenol that particularly exemplify the power of the close to make or break an ad.

Take some risks with messages of inclusion and diverse casting

We found that overall, cross-cultural messages, specifically inclusion messaging and diverse casting, drive the highest groundswell for the Total Market, versus functional ads and ads with American themes. Backlash does increase for some audiences, but not enough to offset the benefit for the majority of the total market.

Cultural cues deeply resonate for all Hispanics

In our Hispanic-focused test, we found that Hispanic cues drive positive response across all levels of acculturation.  And as long as ads in Spanish are simple and convey universal themes like love of family, they will likely do well with English-dominant Hispanics as well.

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Contact us now to explore an innovative approach to ad testing, measure groundswell and backlash and to discover what works and what doesn’t

 

Marketers Need to Rethink How to Mix Multicultural Themes and American Cues in Advertising

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As advertising approaches a tipping point in the need to appeal across multiple demographics, marketers are asking “what really works across the wide spectrum of identity that is America today?” Our analysis of ads unpacks the conundrum and reveals some startling insights.

Despite increasing political polarization and the risk of misfires, more and more advertising is being released that reflects a wider embrace of different ethnicity, racial backgrounds, cultures, gender identities, sexual orientations, and stories of the American experience.

Nike’s controversial embrace of stances taken by Colin Kaepernick and Serena Williams represents the long view that activating against these themes is a necessity even if the earned media upside comes with some near-term pain.  But unfortunately, many marketers struggle to understand the creative subtleties that can make or break a campaign that blends these themes.  Even the most well-funded brands experience high profile missteps.

Using our proprietary AdCompare methodology using facial tracking and machine learning, we generate Total Market Quotient (TM-Q) that allows comparison of ads.  The higher the TM-Q the better

Our detailed analysis of 20 ads will be presented during our Fall 2018 Roundtables, but here are a few preview findings:

Marketers win big by eliciting an emotion we call “peak sentimentality.”

Peak sentimentality best predicts interest in sharing an ad with others, the perception that the message is important, and an improvement in the opinion of the brand. Marketers succeed in capturing viewers’ hearts and minds (and wallets) when the ad tells a story that elicits this emotional mix of sadness and surprise, and ties it to the brand effectively.

Sustaining emotion into the branding moment makes or breaks an ad.

Marketers must ensure the branding moment has a logical connection to the underlying narrative of the ad.

Culturally-authentic casting is a safe bet.

Marketers generate high TM-Q for all segments when diversity seems natural and not “manufactured.”  Diverse casting in a conventional situation (like a biracial couple making dinner) is also a safe bet.

Cultural themes can be both high risk and high reward.  

Themes outside the “traditional mainstream” like immigrant experience, gender and sexual discrimination, and non-traditional families perform well with Hispanics and Asians, but both African-Americans and non-Hispanic Whites take strong issue with these messages.

Asians and African-Americans are polar opposites when it comes to “American cues.”

Perhaps one of the most provocative findings in our study indicates that African-Americans respond poorly to “traditional” American cues, with exceptionally low TM-Q. By contrast these same themes produce very high TM-Q in Asians, indeed far greater than with non-Hispanic Whites. Marketers must vet Creative closely to be sure that traditionally “safe” American themes do not drive unintended consequences with target audiences.

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If you’d like to learn more, contact us below.  Members can access the full findings, check out research on Creating Culturally Authentic Content or check out our approach to ad testing.