Building a ROMI Mindset (Part 2)

In the second part of their article on measuring return on marketing investment, Karim Rammal, Amin Rammal and Mansoor Ali address the issue of acquiring the right mindset.

The sole purpose of marketing is to get more people to buy more of your product, more often, for more money. If your marketing is not delivering consumers to the cash register with their wallets in their hands to buy your product, don’t do it.” Sergio Zyman, Former Chief Marketing Officer, Coca-Cola, author of The End of Marketing as we Know it.

Every business has a strong focus on improving sales and profits. Businesses are also interested in measuring success to improve their ‘recipe’ of doing business – eventually leading to more happiness for the shareholders. Marketing communication is at the core of this ‘recipe’, especially for those who are selling directly to consumers. At some point in history, the challenges of measuring the actual sales driven by specific advertising and brand marketing expenditures, shifted measurement criteria – such as awareness, perception – and purchase intention came to the forefront.

“Marketing placed such strong emphasis on creative and entertainment value, which would score high on awareness and perceptions, that it lost touch with its primary purpose of generating profits. The removal of a direct connection between marketing initiatives and profits led to a corporate mentality that marketing was more of an expense than an investment.” (Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability, by James D. Lenskold.)

The story of measuring marketing investments in Pakistan is quite similar.

Our brand managers are regularly linking their own, or especially their agency’s, key-performance-indicators (KPIs) to soft attributes like consumer perceptions, awareness, purchase intent and so on and so forth. Today’s marketing director, who was a brand manager some years ago, followed the same soft KPIs in his time, and our local brand management industry has evolved in this manner, which is similar to the global evolution.

During the last decade, brand teams in developed nations have managed to cultivate an ecosystem around measuring marketing investments through focus on return on marketing investment (ROMI). In Pakistan we are gearing ourselves to adopt the ROMI mindset.

Today, building a ‘ROMI mindset’ is a huge opportunity available to all marketing teams as we enter the new age of competition – facilitated by the digital information market. This age will demand more transparency in the management systems, which will lead to more accountability for every decision and action. If we break it down to bits and bytes, then every marketing action ranging from delivering a speech at an industry event to a satellite TV spot on a primetime news show costs money. Do we expense this money? Or do we capitalise it as an investment into brand development (similar to R&D investment)? These answers will take some time to settle down, but in order to embrace the wave of transparency which is building up in these digital times, we believe there is a need to adapt to the ROMI mindset.

The ROMI mindset as we understand it, is the ‘will’ to comprehend and quantify each marketing action into sales value. It might take an organisation five to 10 years to accurately quantify the returns of various combinations and permutations of marketing investments. However, the ‘will’ to reach there should exist today.

Having this will is what we understand as having a ‘ROMI mindset’. This mindset is likely to give way to a company culture which can sustain the virtuous cycle of innovation; a cycle of innovation that can lead to intelligence that can be used in strategic and tactical development of marketing initiatives.

“Marketers rely on all forms of intelligence: customer needs, market conditions, competitive activities, and campaign performance history to improve marketing effectiveness. ROMI projections can serve as intelligence into the profit potential. It provides insight into the value that an initiative, strategy, or investment can deliver.” (Marketing ROI)

If we delve deeper into ROMI we understand that clearly the return is dependent on the objective of the investment which dictates the time horizon over which it will be measured and attributed in terms of sales. A product launch or relaunch will tend to have a much longer time horizon than a promotion to drive down inventory. The longer time horizon increases the chances of extraneous factors impacting the margin of error in calculating the return and hence requires an appropriate methodology to control for it. Similarly, major marketing investments also complicate the allocation of cost that would be assigned to the investment.

At a very rudimentary level, ROMI = ((Incremental Sales Volume x Contribution Margin)/Investment). Each one of the three components is a function of several variables and requires its own assumptions and methodologies. In this article, we will discuss the first component which is incremental sales. There are several methodologies that can be employed from basic to more complex statistical techniques. We will highlight a couple to illustrate this point.

A simple model often used in direct marketing and online measurement is the ‘treated and control’ methodology. It requires keeping a control cell which acts as a baseline. The treated cell or cells are developed with various stimuli such as different offers, creative messaging or communication channels. The sales rates from the treated cells are then compared to the control and any statistically significant difference is considered to be incremental. While easy to set up and calculate, this methodology has its limitations, such as it only allows a limited number of variables to be tested at a time.

A more complex technique is based on experimental design which uses statistical modelling based on combinations of variables. Therefore, hundreds or even more variables can be tested at a time. This technique is also used in clinical trials to look at the interaction of chemicals and their effects on subjects. Computing power and applications such as Statistical Analysis Software (SAS) enables statistical techniques such as logistic regression to compute large data sets with many variables. However, even with mathematical modelling, business judgment is critical to implement such techniques and assess the output.

Marketers who can embrace the key principles of ROMI have much to gain as it makes the entire marketing process very simple – it comes down to how much more money you end up with (your return) compared to what you invested. Measuring ROMI does have its challenges as confirmed by the high percentage of marketing executives reporting difficulties in the Accenture Survey Report mentioned by James D. Lenskold in his book Marketing ROI. The major challenges that face companies working toward more accurate and useful ROMI measurements are:

• Generating reliable future value projections
• Getting access to data
• Standardising measurements, values and practices
• Establishing cost effective measurement processes
• Establishing valid control groups
• Matching results back to the appropriate marketing initiative in multi-channel marketing environments
• Allocating expense
• Understanding the residual value (or impact of ad-stock)
• Organisational barriers:
  Rewards and recognition
  Lack of financial skills
  Truth in results
  Budget allocation power
  Reliance on media agencies
  Fear of change

The current age of marketing is bringing companies closer to the individual customer and each relationship must be managed to maximise customer profitability. The process of settling marketing budgets based on previous year budgets can be considered inefficient and outdated.

“The need now is for every department, and organisations as a whole to work smarter and marketing must step up to the plate and motivate change.” (Marketing ROI)

Karim Rammal is President, Unicorn Consulting Inc. New York, USA. karim.rammal@unicornconsulting.com Amin Rammal is CEO, Digispace; Partner, The Brand Crew; and Strategy & Analytics Consultant. amin.rammal@thebrandcrew.comMansoor Ahmed Ali is President, Emteltech & Partner, Cablecast. mansoor@emteltechnology.com

NB: In writing this article, the authors have sought the permission of Mr. James D. Lenskold to quote from his book – Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability.

The first part of this article appeared in the November-December 2009 issue of Aurora. Click here to access it.

Desktop thinking

Ask a room full of marketing people in Pakistan what the term ‘experiential marketing’ means in their lexicon and what will emerge will be a mixed bag of interpretations and substitute terminologies, the general drift being that it has to do with ‘communicating with the consumer, usually (but not always), through means other than what passes for conventional ATL advertising.

This fuzziness is not entirely confined to Pakistan’s community of brand communicators. For example, the Wikipedia page on experiential marketing redirects the reader to their page on relationship marketing – which although not quite the same thing, is probably as good a point of departure as any in tracing its evolution.

Relationship marketing started off as being about entering into some sort of ‘relationship’ with the consumer, best achieved by eliciting a ‘response’ from said consumer. Relationship marketing finds its roots in the ‘mail order’ business, best exemplified by Lester Wunderman (see The wonderman of direct marketing in this month’s Aurora) and subsequently in ‘direct mail’ and ‘database marketing’ here best exemplified by Ogilvy & Mather in the days when they handled the American Express account. Eventually this gave rise to the term ‘direct marketing’ which was then further classified in advertising parlance as below the line advertising (BTL), which simply means advertising that is delivered through a platform other than print, television, radio or billboards.

An offshoot of relationship marketing is what is known as CRM (Customer Relationship Management), a concept directly linked to experiential marketing, as it affects the customer experience in a very relevant way. (The fact that many companies use CRM as a pleasant way of justifying bad service is another story.)

The growing intensity of the media proliferation and the evolution of the internet from its primeval static manifestation (Web 1.0) to its present interactive and digitalised form (Web 2.0) changed the balance of effectiveness between the ATL and BTL media, with ATL being seen as largely compromised as consumers, simultaneously overloaded by information and empowered by that same information, became harder to reach and harder to convince. As a result a more direct and targeted approach became the order of the day, and ‘brand activation’ (a dreadful term) entered the marketing lexicon, defined by Ogilvy as ‘through the line marketing services’, that are ‘media neutral’ and based on ‘a big idea’.

Experiential marketing in its present incarnation takes this concept further, basing its effectiveness on an ability to create consumer experiences by engaging their emotions and their five senses. On the surface this may sound like a tall order, and yet experiential marketing can truly be a wondrous thing for brand communicators provided they are able to ‘hit the right spot’ – which is the crux of the matter.

To hit that right spot, experiential marketing has to be – and cannot be anything else but – relevant to the consumer at a particular time and place.

An excellent example of this is illustrated by Javed Q. Khan in this issue (see Nature’s call in this month's Aurora). The relevance of Charmin’s ‘brand activation’ is so obvious and yet so brilliant. What can be more customer relevant for a brand of toilet paper than providing the most luxurious ever public restroom experience to a crowd of weary but happy Christmas shoppers milling around Times Square on a cold winter’s day?

Because this is what happens to shoppers in cities all over the world; they shop and then all of a sudden they desperately need a restroom break. And that, ladies and gentleman, is what is called a consumer insight, and precisely the point.

Experiential marketing can only work if based on real consumer insights.

To engage consumers, brand communicators have to acquire deep and intense knowledge about their customers, and to do this they have to go to whatever spaces their target audiences occupy and start to listen, observe, deduce, and then hopefully make the crucial leap to the Big Experiential Idea.

As we see in this issue, experiential marketing is beginning to capture the imagination of brand communicators in Pakistan and the number of initiatives in these areas are growing. Yet, for the most part they remain mundane and lacking in the ‘wow’ factor that catapults an idea into the kind of viral reactivity that is the underpinning of any successful experiential campaign. The reality is that people (unless they live completely sad and empty lives) are not that interested in brands, their interest lies in what the brand can do for them.

To be successful experiential marketers, brand communicators have to stop thinking about the brand; they have to think about what their brand can do for their customer. And to do this they need to get out of their offices and mine those insights up close, and then get their brands to super-serve their customers in a way in which they have yet to become accustomed to.

Whatever will customers want next?

It is no big secret. We live in the most challenging of times, and the need of the hour is to wake up, identify new trends and tap into emerging segment opportunities. Here are some trends that I foresee, based on international and local environment changes.

Cocooning

This is a trend whereby people socialise less and retreat to home-based activities. Cocooning is defined as “the act of insulating or hiding oneself from the social environment, which may be perceived as distracting, unfriendly, dangerous, or otherwise unwelcome, at least for the present.” (Source: The Popcorn Report)

Technology, of course, has made cocooning easier. In the face of an increasingly insecure exterior environment, people prefer to stay within the comfort of their homes. Parents are giving in to demands by their children for iPods, PSP3 and HDTV, because they want them to be entertained within the safety of their home. Ten years ago, parents happily let their children congregate in the street, at the playground or the gym, but in this day and age few parents will do this.

There has been an upsurge in the sale of electronic goods (laptops, iPhones and iPods) and people are looking for value deals. I would not mind investing in a surround sound HD system rather than go to a Cineplex – but could someone please throw in a popcorn maker for free to make my experience comparable? Or could a technology service provider offer me an integrated package that will give me 200 channels with the ability to record and replay, along with high speed internet, gaming boards, live international radio streaming and, and, and…

“I used to love to dine out with friends at some of the best BBQ adaas, but circumstances limit my mobility now.” This statement was made during a research study conducted by the Four Corners Group; it reflects the mood of the times and restaurants and food companies need to take note.

A few years ago out-of-home was the big buzzword, but this is no longer the case. Today, a few enterprising restaurants are ready to send their chefs to cook a gourmet meal at home (for people who can afford this kind of service). Furthermore, TV food channels are giving the dining out business (including doughnuts, pizzas and burgers) a run for their money. The popularity ratings of these channels have soared because they are teaching viewers how to cook their favourite restaurant dishes (at a fraction of the hassle and cost), or how to host a successful low cost party for friends or family. Of course dining out will not die for those who can still afford to do so, but restaurants will have to find alternative locations to avoid becoming prime targets for security episodes; and nobody minds paying a premium for extra security.

As people increasingly turn to their home as a source of peace of mind, TV channels can add value by developing good family programming that everybody can watch; shows like Who Wants To Be A Millionaire, American Idol and America’s Got Talent.

The lipstick effect

The lipstick effect is the theory that when faced with an economic crisis, people are more likely to treat themselves to small luxuries, rather than make larger purchases, such as cars or holidays. This is about people’s need to continue to consume and express their identity despite economic pressures. Hence, the mushrooming of beauty parlours (there is almost one in every apartment block), the trend towards better personal care among men, and the emergence of spas. If I am to forego peace of mind every time I step out of my house, or am unable to afford my dream car, allow me to spend a fraction of the cash on treating myself to a good massage or on joining a wellness centre for detox treatment or liposuction. Here is an opportunity for service oriented organisations that are smart enough to adapt to their customers’ changing needs.

Families might forego moving to a three-bedroom apartment from their two-bedroom one; instead, however, they will undertake renovations such a fitting a new kitchen, buying new furniture or a flat screen TV. Hence, the booming business seen at shops like Ashary’s, Habitt, Index and Interwood. Companies need to come up with the right offering rather than sit back in fear of the recession. They need to develop consumer friendly financial packages (such as pay 50% of the amount and the balance in instalments, or buy on credit and work out a lower interest rate with the bank), strip products down to their simplest offering and then allow customers to build the package themselves.

Store brands

These are store branded products – for example Makro milk rather than Olper’s or Milkpak, but which cost 50-60% of the price. A great offering, but probably difficult to introduce given our retail trade structure. The point is that people do not want cheap products, they want value for money. Internationally, the number of small, efficient, focused companies offering alternatives is increasing every day and consumers are buying into them.

Organisations fear launching ‘fighter brands’ because of the resources required to market them, but what about a store branded detergent that costs 20 rupees (assuming that the leader sells for 40 rupees and the cheapest brand sells for 18 rupees)? This curtails advertising expenses and all they need to do is to leverage the existing distribution network. They can also save on the packaging; do they need four colour printing with UV coating and a product shelf life of 18 months? Remember, it is the value-for-money segment that you want to tap into and not the cheapest quality segment.

The do-it-yourself approach

Can I do away with the driver? Yes, if a company is able to offer a reliable chauffer service. Can I do away with ordering KFC and prepare a similar meal at home? Yes, if someone will offer me a Pizza Hut BBQ dough mix or a Zinger recipe mix. Can I build the new kitchen cabinets myself? Yes, if companies like Adon start to market themselves or a local wannabe IKEA, or Home Depot enters the market.

When we talk about ‘new’ consumers, we need to understand that they are in fact ‘old’ consumers who are evolving. Not keeping up with their changing attitudes and needs will mean having to eventually find new consumers at a much higher cost and with a much lower loyalty threshold.

Shoaib Siddiqi is Consultant & Business Owner, Four Corners Group.
shoaib@fourcg.com

“We need a good laugh and something joyful to watch”

Faisal Qureshi, Owner & Director, Game Over Productions, speaks to Aurora about his current Ufone success, the importance of humour and his longer term ambitions.

AURORA: How would you define yourself professionally?

FAISAL QURESHI: It’s a difficult question. I am still confused… I am a thinker, I work as a writer, a director, a producer, an actor and now a concept writer for Ufone.

A: And you are also a NCA (National College of Arts) graduate?

FQ: I am a graphic designer, although professionally I am not practicing.

A: How did you move TV?

FQ: It happened during my second year at the NCA. Ahsan Rahim had just graduated from there and he was working on a TV show. He had seen me acting and wanted to try me out for the TV show he was working on; it was called VJ (Video Junction). I agreed to do one show for him and I wrote the script, which he really liked. He asked Hadiqa (Kiyani) to host the show, but she was unable to do it. Also, he was keen that the host should be able to carry off the script the way I had written it, so he asked me to try it out. I agreed and the show was a hit and the producer then insisted that I be hired as the host.

A: Does comedy work in Pakistan?

FQ: It does. The Ufone commercials were first made seven years ago and they were a huge hit and the client was very happy. Then there was a change at the top, and the new management wanted to move away from comedy. However, later on, the former management came back and they asked me to continue with the original campaign. So I am back writing for them again, and we have been getting a brilliant response. In Pakistan, people tend to think that comedy has to do with non-serious matters, which is not true. Comedy is both very difficult and very touching.

A: What draws you to humour as a form of expression?

FQ: It touches the heart. Also, with humour you can get away with a lot of things on so many issues that you can’t do in a serious way. But you have to be smart when you do it. I think the Pakistani public appreciates comedy, but ad agencies can’t think in those terms. I don’t know why, but we are very conscious of the quality of the production; we don’t want to show the lower classes in our commercials. In Indian ads, you see people portrayed just as they are. We are very self conscious; we want A-class ads, with upper class houses, glass buildings, good views and rich people. We are happy when we achieve the quality and the neatness of the ads. Our creative people cannot think beyond a few things. They make these lifestyles ads, and they are an easy way out; they justify the budgets because they show glossy stuff. If you show the raw stuff, the client will ask how can you justify the budget?

A: Do you work directly with the client on the Ufone commercials?

FQ: Yes. I am the creative writer and I work directly for Ufone. I think agency people – and I am not talking about any specific agency – have a specific mindset which they don’t seem able to move away from. I have worked on a freelance basis with a number of agencies and I think they cannot create change because they are following a set pattern. Also, if too many brains are involved in a project, each with different thoughts, you end up spoiling the whole thing. I told Ufone that I would give them the idea and if they wanted changes, we would make them, but that the basic idea would remain the same. They have given us that free hand.

A: Is this your only venture into commercial ad making?

FQ: Concept wise, I am doing only this so far. But different companies are approaching us and want to work with us.

A: So what is your bread and butter?

FQ: My production company, which is called Game Over Productions. We produce TV programmes for different channels… ARY, Geo, Hum TV.

A: In terms of production values, do you think PTV has lost its edge?

FQ: Their edge is that you only need an antenna to be able to watch their programmes. They are surviving because everyone in every village can watch PTV, while the rest of the channels are restricted to the main cities. Production-wise I don’t think they are growing.

A: In terms of quality productions, nobody seems to be doing particularly well. Why?

FQ: The problem is that we don’t have an institute to polish people. We polish people by experimentation. Someone comes along and says he wants to do camera work… and that is how they start working, with no knowledge, or study, or background. The set up is raw; we need an institute to make it more solid.

A: But no one seems willing to set up such an institute.

FQ: I think it would be a brilliant opportunity for investors! If they make it a good institute and hire teachers from abroad, they will make money out of it. We have so many TV channels and they should contribute and open an institute. If they do, they will benefit from good, polished talent and good programming and they won’t have to buy programmes from elsewhere. It will take about four or five years to train the first batch but eventually this will make us self sufficient enough to develop our own stuff and even sell to India and other countries.

A: Does running a production house make good business sense?

FQ: Yes, if you produce good work. We do not take on more than two projects at a time. However, those companies that are working on 10 or more projects are suffering due to the recession. We are very focused on the projects we do, and people appreciate this.

A: Why do many production houses feel that TV channels are unfair to them.

FQ: They do not pay on time. One of the reasons why I do not take on more than two projects at a time is because I cannot keep financing them myself. If I make a 26-episode series, the contract states that I will only start getting paid after the 13th episode. However, if for some reason this does not happen, I have to stop the project and try to recover the money, all the while incurring the expenses of running my production house. There are no laws or rules. Channels draw up contracts, but they are not bothered about paying on time. Their concern is about getting the project delivered on time, but not paying on time, and sometimes they take years to do so. This is why some of the smaller production houses are forced to close.

A: Under these circumstances, what happens to quality?

FQ: For the amount they pay, they cannot get quality. In India a single episode of a soap opera costs 300,000 Indian rupees, while here we sell an episode for 150,000-200,000 rupees. When it comes to production, we simply try to copy the frame, which is basically what we see on the TV screen, but what we don’t see are the layers of people required to work behind the scenes, and which in other countries are proper teams that get paid proper amounts. We need to structure this; we need teams who are capable of thinking about various aspects of the production; people who are educated. And we need to pay better rates in order to get proper work.

A: So even if you did have a training institute, unless the channels are willing to pay real money for value, quality will always be compromised?

FQ: Channels are scared of investing in people because quality people who actually know what they are doing are so few. Most experiment and learn on the job. We need people whom the channels can trust.

A: In Pakistan, why is there such a difference in terms of production quality between a commercial and a TV series?

FQ: The budgets for commercials are much bigger, the cameras used for commercials are more expensive, plus there is the processing. The budget for a 30-second commercial is more than that allocated to a 30-episode series.

A: Does this kind of difference happen in other countries?

FQ: No, internationally you won’t find any difference between a TV series and a film. They have the same budget, use the same cameras, the same teams; you can’t tell the difference.

A: So what is the problem here?

FQ: People are not open to investing. People don’t want quality, just cheap rates.

A: A lot of directors have resorted to making commercials because they feel there are too many hurdles to overcome in Pakistan when making a film.

FQ: There are problems. Many of these directors are making such good money making ads that they can’t take the time for anything risky; you never know what is going to happen with a film… they can lose millions; a film takes at least two or three months to make.

A: Have you thought about venturing into a feature film?

FQ: I would love to. We are planning a film; I am buying my equipment and film gear. If I have my own equipment, I can make a low budget humorous film.

A: But the lack of layers and polish that we have been talking about almost certainly applies when it comes to producing films?

FQ: Yes, but we need to take risks. I am buying my own equipment because with your own equipment you can experiment. If something is not good, you can reshoot it because you have your own team. If you have a financier, he won’t let you reshoot because you are wasting money.

A: Are you in favour of co-productions with India?

FQ: Yes, so long as we get something out of it; the most important thing is to learn from the process and apply that learning to our own productions. I have worked with Indians and they have the same setup as international teams do. We need to produce more good commercial entertainment, and this is where we lack. The people who are making films are more into art and depression, whereas we need good entertainment; we need a good laugh and something joyful to watch.

A: Is making a film an affordable venture?

FQ: If you work smartly, you can make a good, low budget film. However, you cannot develop your film industry by making low budget films alone; you have to invest in the industry. Films should be larger than life and for that you need big budget films.

A: What is your big ambition?

FQ: To make a film which can be released internationally and receive international appreciation. We need to go international. We need to compete with those markets. I heard that an Indian producer has signed a contract with Spielberg to make three films. The Indians are thinking and investing on that level; the fact that we are not, is not good for us.

Faisal Qureshi was talking to Mariam Ali Baig.

Measuring return on marketing investment

Karim Rammal, Amin Rammal and Mansoor Ali on why Pakistani brand managers need to get their ROMI act together.

The global downturn that began last year affected all industries across the board. Many still haven’t been able to see the bottoming out of the slowdown in their growth. The ever increasing pressure on companies to not only grow but also to survive has led management to look at disciplining their costs. This usually means that the first budget to come under pressure is “marketing”.

Additional pressures have come from the fact that product choice has increased, customer touch points have grown and consumers are more knowledgeable, leading to decreasing promotional effectiveness of traditional mediums and tactics. Marketers are also facing complexity in allocating marketing spend as their brand portfolios increase.

In such a dynamic and complex environment, the pressure comes down pretty strongly from the board of directors and/or the management. The questions asked are:

“Our marketing budget is spread thinly across too many initiatives. What are the critical marketing programmes that will drive meaningful sales volume?”

“Do we really need to spend so much on ATL media? What value are we receiving from print advertising?”

“Can you tell me the return on marketing investment (ROMI) on spends?”

Many more questions are then raised in the discussion, but these are enough to give you a sense of the pressure applied to show tangible evidence in order to justify that there is marketing impact at the level of the budget that is being spent.

ROMI has become a major discussion point in the UK, US and other developed economies. In fact, it is a data point that should be inherent in all businesses that have a significant marketing budget.

Today, ROMI can be calculated for most of the marketing spend. There are even econometric models available to link marketing spends to sales and set benchmarks for performance. However, since Pakistani companies have had a good run thus far, its need has not been felt.

The science in measuring ROMI is more of an art; its core lies in measuring marketing spend efficiency as accurately as possible and relating it to sales in a creative way. The first part is what we will be addressing here and explaining how various aspects of marketing spend efficiencies can be measured and the current metrics that are used.

The focus is the medium and not message, promotion or content.

1. Television: The advent of People Meters has been a great achievement in most markets. However, its effectiveness is as good as its representative population sample and the margin of error that is applicable to the data. While many question the data’s authenticity in Pakistan, it is still better than nothing or even diary based data. Measuring effectiveness of television spends has become a major priority as audiences have shifted to consuming other media such as online, gaming, etc.

One way to more accurately check the error margin of the meter data is to run periodical independent dipstick telephone (SMS and calls) surveys that can provide a good check on the People Meter data. Once this data is adjusted to reflect a more accurate reading of the efficiency of spend, then this is worth bringing into the econometrics model as one of the elements to predict ROMI.

While People Meter data measures how many people are tuned to a channel/programme, it does not take into account the impact of the ad. It gives you CPRP (cost per rating point) but does not show the impact of the rating point. New research methodologies have been introduced to measure how viewers respond to programmes, TV commercials and product integration on a daily basis. These techniques are powered by the reach of the internet and enhanced data analytics.

To give an example, there is a research company in the US that captures response daily from the over 5,000 respondents serving millions of surveys annually measuring:

• Wear in and wear out: When does an ad reach its maximum market impact?
• Rotations: Can overall effectiveness be improved by changing the creative rotation?
• Spot length: How does it influence recall?
• Response curves: How does frequency impact intent to view?
• Brand and message recall: What was the commercial for and what did it say?
• Likeability: How much do viewers like the commercial?

Over time this information can be calibrated with sales data to create a more accurate sales-to-advertising response curve that is used to calculate ROI.

2. Digital video: One of our clients in the US is Visible Measures, an online video measurement company based out of Boston. They provide metrics on owned, paid and earned data as well as on viewer engagement (on a census basis). Their methodology provides close to 100% data accuracy. Brands are using them all over the US to gauge not only their campaign reach but also to evaluate message stickiness. Their metrics go beyond the traditional measure of impressions and CTR (click through rates) and are invaluable in plugging into the econometric model as it allows a fairly accurate data point at two levels – reach and message comprehension.

In fact, their movie trailer measurement metrics is used by major Hollywood studios in their forecasting of box office sales and they have been fairly accurate with their predictive modelling.

3. Radio: Measuring radio listenership has been a challenge for many years. There have been several ways of addressing the issue, of which some have worked and some have not. There is a new technology that is being tested which can accurately measure second by second listenership and track switching. Matching that data with logs from radio station can help create a model that can measure engagement for programming and advertising.

This technology will be a big boost for radio stations as they will be able to use this measurement metric to better monetise their inventory.

4. Out of home (OOH) media: Similar to radio, OOH media, particularly outdoor billboards, have been difficult to measure. However, using technology and survey instruments, it is now possible to measure impressions, reach and CPM. It can also be layered with geo-marketing data to provide audience profiles. Convergence with newer mediums and connectivity with digital OOH media will make it even more measureable.

5. Print publishing: Measurement based on circulation is the only way to measure reach. Adding layers of demographics to sales on a neighbourhood basis allows for measuring the efficiency of the ad investment relative to the non-core demographic reach. Engagement metrics can be derived from data generated from readership’s call to action. Did readers respond to a promotion? Did they call the number in the ad? Circulation and target demographics are probably the best way to layer the information onto the sales data that a product may have and use that for justifying the ad spend investment.

6. Digital Publishing: Measuring digital publishers has been the case since the commercialisation of the internet. There are several companies that specialise in providing some very interesting and deep data on sites, traffic, engagement, CTR, etc. This data can be better applied to help create a relationship between sales and CTR. Websites are able to do this best since they can track a customer’s behaviour as soon as they come over from a publisher site, enticed by a click-through banner or link or (now) video.

7. Brand activation: Typical efficiency measures for brand activation are related to cost per contact. Additional data can be derived through pre and post surveys to determine impact in terms of recall and intention. A more accurate way is to conduct pre and post surveys in a test market where the brand activation programme is implemented, and compare it with a control market where it is not. The important thing is to make sure that the two markets are comparable.

While we have dwelt on the media efficiency aspect of the ROI equation, it is important to keep the following in mind:

• The ROI should be measured at the programme level and aligned with the relevant metrics based on the goals of the programme.

• When comparing ROI, make sure that strategic considerations are kept in mind. For example, ROI is sacrificed for scale or higher market share because it helps keep a plant capacity at an optimal level. Niche targeted programmes usually provide higher ROI while mass audience programmes will deliver market share. The decision to allocate money will tend to be based on the product category and strategic goals.

• Time horizon should be taken into consideration when measuring ROI. For example, sales promotions to drive down inventory will create incremental sales in the short term. However, to gauge true incremental sales it should be measured for slightly longer to see if there were any pull ahead sales. This will be discussed in a separate article when we tackle the more difficult question of impact on sales and linking it directly to ROI.

To conclude, the practice of measuring ROI in Pakistan is evolving, fuelled by a number of factors:

• The media boom which began eight years ago with the advent of private channels. The supply side (media) is expected to become more sophisticated, which would lead to a more documented media industry making it easier to calculate ROI.

• Various research tools which we discussed earlier. Currently there is enough money in the market for new research initiatives to sustain themselves. Therefore, allowing markets to become more educated through some of the latest research initiatives include meter-based TV audience measurement, radio advertising tracking, etc.

• Expansion of digital advertising services. It is measurable, therefore performance measurement on digital will force brand managers to compare performance on other media as well.
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• Media reviews by regional headquarters of local multinational firms are passing down the learning of measuring the advertising ROI. Globally, ROI is a reality now and it will eventually be forced down for adoption to local brand managers.

• Increasing competition and consolidation in the media planning and buying space is also leading to the evolution of new measurable planning techniques and sharing of learning.

• The pace of the telecom industry should become more manageable now due to several years of experience of handling media locally. Therefore, the telecom war is expected to enter a saner mode of engagement where the telecom players would compete like FMCG companies to brand their service (P&G versus Unilever, or Coke versus Pepsi). This engagement will hopefully see the industry evolve more efficiently behind supply side investments by telecoms to establish various performance matrices on their ad spend. These matrices are widely available and used for media reporting globally and in this information age, a slight innovation on ground can result in availability of more efficient tools in the market place.

All in all, the Pakistan media market is an advertising led industry, therefore the need for ROI and the financing has to come in from the demand side, since ‘brands are the true kings of this industry’. ROI based planning will lead to a more efficient market place and this market drift will force inefficient players (and other inefficiencies) to exit. Therefore, the agent of change should be the media managers employed directly by the brands as they are closest to the ‘kings’.

Karim Rammal is President, Unicorn Consulting Inc. (USA), Amin Rammal is CEO, Digispace; Partner, The Brand Crew; and Strategy & Analytics Consultant and Mansoor Ali is President, Emteltech. Karim.rammal@unicornconsulting.com, amin.rammal@thebrandcrew.com, mansoor@emteltechnology.com

First published in the Nov-Dec 2009 issue of Aurora.

Breathless

Adnan Syed reviews Mazaar Bazaar.

Breathless… the first word that came to mind.

This book leaves you breathless. In anticipation – and in exertion. Six years is a long time to wait for a book and waiting for it to come out was akin to the anticipation for the latest Harry Potter – or Dan Brown as some would have it – but as with all such eagerly anticipated events, how does the book measure up?

Unlike other publishing events, there was no hype except in certain circles. There is no other book of its kind to compare it to in the local book scene. There was a book on Pakistani architecture by Kamil Khan Mumtaz published years ago, which was welcomed as a much needed discourse on the architectural scene; and there have been a number of books on various aspects of the arts and crafts scene by notable people but none has ventured to cover so much as this one. At 347 pages, covering a wide spectrum of the visual universe surrounding us, 33 written and photographic essays, the book does leave you breathless.

It has been a long journey for Saima Zaidi, who described her exploration of topics:

“In its earliest stage, the focus was only on retail packaging design, later it narrowed in on those that were purely Pakistani brand icons. Then the project expanded as I started to investigate everyday imagery, popular and mass culture with comparisons to contemporary art and eventually I included ancient art and design as historical visual references.”

Kudos to her for initiating the process and OUP (Oxford University Press) for giving us the book in its printed form. The author was straightforward when queried about the book’s funding.

“Procuring the funding was pretty easy and straightforward. I had learnt of the Prince Claus Fund through Arif Hasan and Asma Ibrahim, and I applied for a grant. The Managing Editor, Peter Stepan, responded by offering not only to provide a grant but also a collaboration with the Prince Claus Fund Library in the Netherlands.”

As to my next obvious question, she was very frank.

“At that time, I knew of no other individual, or organisation, that would support a publication of this nature.”

The book is divided into four sections. Dekh Magar Pyar Se deals with vernacular and folk culture, Read talks about calligraphy/typography, Be Pakistani, Buy Pakistani deals with the consumer/ advertising culture and Long Live Pakistan is about developing a national identity through flags, currency and postage stamps, and finally there is an historical overview from Mohenjo-daro to the present day.

The four sections provide a wealth of knowledge on key aspects of our visual environment. The Be Pakistani, Buy Pakistani section is the easiest to read and digest; obviously, you might say, because it is about advertising and hence dumbed down. But I vehemently, repeat, vehemently, disagree. Not because I am an advertising person myself, but because I resent being deprived of the other vital pieces of knowledge in the book simply because I don’t have a PhD to understand the overdose of academic prose in some of the essays. The piece on PIA is informative and brings to light background information and creative work which would have otherwise remained hidden from the public eye. An unabashedly promotional piece, it makes one proud to be Pakistani. Another interesting bit of information, gleaned from the Pakola article, was the fact that Pepsi taking over the cola scene and Pakola falling by the wayside was not merely due to competition between companies/brands, but to the fact that Pakola chose to focus its energies in one direction to the detriment of their original brand.

The section on typography lacks meat. It’s like a delicious looking pulao with lots of meaty pieces that turn out to be mere bones, with a few scraps of meat sticking to them. The visual essay on the development of the Jang masthead is far more interesting than the written one. In a different way, the article on the development of the ‘hero’ is far more informative than the visual imagery that accompanies it. Typography plays a very important role in the development of design and visual culture, and the section barely skims the surface of the power of the Urdu script.

Similarly, the Dekh Magar Pyar Se section is perhaps the most exciting, and yet it is also disappointing. Apart from the articles on film billboards and wrestling posters, the others fail to impress. They are too heavy to digest, or too brief, or superficial. Either way they fail to make an impact and one is left wondering what, if anything, did one learn about how and why this type of art was created.

The most poignant pieces are found within Long Live Pakistan, specifically the ones about the national flag and the Quaid-i-Azam. They make abundantly clear how shabbily and superficially the two biggest national icons are treated in our visual culture. The simple structure of the national flag itself is worth the price of the book! The article on stamps may be the longest in the book but it is worth reading if only to absorb our endeavours in a very undervalued field.

For the history buff there is an impressive section on pre-Partition going all the way back to Mohenjo-daro’s coinage. Very useful for students and if only our institutions were able to incorporate the idea that learning from history and building upon it is essential to the development of a nation’s identity.

When I shared a book from our office library with an artist friend of mine he spontaneously commented, “Uff… iss mein to pictures hee nahin hain!”

Although we laughed it off, that comment served to pinpoint a serious shortcoming. We have become visual gluttons, choosing to devour visual stimulus and not bothering to undertake any mental exercise. Our advertising has become a reflection of this; all flash and little substance. This book, however, has ample doses of both visual and intellectual food for thought. It is stuffed with visual imagery, mostly with helpful captions and explanations (and a very welcome credit list at the end) which serve as parallel studies alongside the written essays.

Which brings me to something that bothers me no end. As an exercise in graphic design the book is beautifully laid out. But it is hellishly difficult to read. The miniscule text, especially in the coloured portions, is enough to give you a headache. The paper is lovely to feel; thick and textured but doesn’t do justice to our richly colourful visual culture. The written essays leave much to be desired. They are uneven and although that is to be expected with so many different contributors, one is left with a nagging sense of being unsatiated. Except for a few which make for interesting reading, the others are either unreadable because they are either too heavy on academic prose, or shallow. Which raises a fundamental question: What is this book trying to be?

Is it a survey of visual culture, in which case it is unreadable in many instances, or is it an attempt to understand the development of visual culture?

The blurb on the jacket says it is an “…interdisciplinary study… the book documents contemporary visual vernacular and provides an overview of the diverse cultures assimilated over several millennia. It reflects social, commercial and geopolitical changes influencing this region, and addresses a broad horizon of graphic expression… an indispensable sourcebook for designers, artists as well as students of communication design and culture.”

Is it a book for goras or for us desis? Going through the book leaves you breathless at the quantity of information, but perhaps in trying to promise too much to too many people, the book loses out on its true greatness.

In the way that a person with a sweet tooth always craves for that extra ‘bit’, the book leaves you craving for more. n

Saima Zaidi, ed. Mazaar Bazaar: Design and Visual Culture in Pakistan. Oxford University Press, 2009. 347 pp. 3,000 rupees.

Adnan Syed is Chief Creative Officer, Adcom. adnans@adcompk.com