10.15.2007

                   
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1,200 Marketers Can’t Be Wrong:
The Future Is in Consumer Behavior

From the New York Times
Published: October 15, 2007

Al Gore, fresh from winning the Nobel Peace Prize, stayed on his marketing theme.

Consumer behavior as a route to effective marketing was a central focus of the largest gathering ever of an influential trade organization.

The 1,200 people who attended the 97th annual conference of the Association of National Advertisers, held here from Thursday through yesterday, heard speaker after speaker address the growing popularity of what is known as behavioral targeting, as opposed to basing pitches on consumer attitudes, opinions or perceptions.

The ability of new media to monitor what consumers are doing — like keeping track of which Web sites they visit — is fueling the interest in behavioral targeting. Several speakers also described how they were using traditional media to more precisely aim advertising at consumers based on behavior, through steps like tailored television commercials.

The Microsoft Corporation is investing in “well-targeted advertising,” said Steven A. Ballmer, chief executive, “as aggressively as we’ve ever invested in anything.” Its acquisitions include the $6 billion purchase in August of aQuantive, a leader in online advertising.

“What’s the joke about the egg and bacon breakfast, ‘Who’s more committed, the pig or the chicken?’” he added. “We’re the pig at the breakfast; we’re committed to the future of digital advertising.”

Rather than fearing the arrival of technology companies like Microsoft into the ad business, Mr. Ballmer said, marketers ought to realize “there’s an exciting future for all of us.”

“The more we know about customer behavior, the more every ad is relevant,” he added, and relevance improves the chances that a consumer will pay attention to an ad.

For example, as more TV sets are “fed with intelligent signals that come over the Internet,” Mr. Ballmer said, advertisers will be able to deliver personalized marketing messages based on online searches. The fact that his wife has been searching online for tile for their beach house could lead to a commercial for Italian tile turning up amid the beer and car spots as they watch TV sports together on a Sunday afternoon, he said.

A commercial like that would not typically be expected during a Seahawks game, he added, “but it’s in context — not in the context of the show, but in the context of her behavior.”

Roger W. Adams, senior vice president and chief marketing officer at Home Depot, described how his company regarded its Web site as “a learning laboratory” as it spent more time and money “on understanding our customer better.”

One finding was that “the underlying component of the emotional connection to the brand is the power of ‘I did it,’” he added, “as the ownership of your home becomes very personal because you created something” after buying materials for do-it-yourself projects at a Home Depot store.

“We’re experimenting with a lot of behavioral targeting, online and offline,” Mr. Adams said in an interview after his speech, in moving away from a “one size fits all” approach using ads in mass media like TV and print.

As a retailer, he added, Home Depot has the advantage of access to “individual customer purchase history” as it seeks to customize ads.

“There are different messages in different media for different consumers,” Mr. Adams said. “It’s incredibly complex, but that’s the way it is.”

For instance, he said, Home Depot has achieved positive returns by segmenting its campaigns for the Hispanic market, creating ads for “acculturated Hispanics” — those who are second- or third-generation Americans — that differ from ads for consumers who almost always speak Spanish.

Robert C. Lachky, executive vice president for global industry development and chief creative officer at Anheuser-Busch, discussed in an interview how his company, like Home Depot, is segmenting its customers.

Anheuser-Busch is taking “a bit of a deeper dive,” he added, going beyond factors like age, gender and ethnicity to aim at customers through “use occasions.”

For example, a beer drinker might order a domestic light beer while watching a baseball game at a sports bar and a full-flavor import while on a date at a nice restaurant.

Anheuser-Busch sought to tap into the power of the Internet this year with an ambitious online project that offered entertainment programming at a Web site named bud.tv. But visitor traffic fell far below initial predictions, and the content is being rethought.

The programming “had nothing to do with our brands,” Mr. Lachky said during his speech. “Branded content is what the consumer wants, and it’s what we’ll use that space for.”

For example, a video clip called “Swear Jar,” which was recently added to the Web site (and is shown below), shows how a company’s employees start to enthusiastically lace their conversations with obscenities after learning that the money being collected every time they curse will go to “buy something for the office, like a case of Bud Light.”


The previous highest turnout for the association’s annual conference was last year, when nearly 1,000 people attended. The sharp gains since 2002, when attendance bottomed out at around 250, followed a change in leadership at the association, which has 400 member companies, and the recruitment of widely known speakers from giant companies.

This year, the roster also included Wendy Clark, senior vice president for advertising at AT&T; James R. Stengel, global marketing officer at Procter & Gamble; and Al Gore.

Mr. Gore spoke on Saturday, a day after he learned he would share the 2007 Nobel Peace Prize for his work on raising awareness about climate change. But his speech was not about global warming, politics or the awards he has received, which include an Emmy and an Oscar.

Rather, Mr. Gore, who was greeted with a standing ovation, wore his hat as the chairman and co-founder, with Joel Hyatt, of Current TV, a cable network and Web sites (current.tv and current.com) that offer younger viewers the chance to create programming and commercials.

Mr. Gore played for the audience examples of Current TV programs and “V-Cams,” or viewer-created advertising messages, for sponsors like L’Oréal, Sony, T-Mobile and Toyota.

Mr. Gore was invited months ago to address the conference, which carried the theme “Transforming the Marketing Landscape.”

Still, said Robert D. Liodice, president and chief executive of the association, it was Mr. Gore’s choice to stick with his speech, titled “Consumer-Generated Media: The New Marketing Paradigm,” rather than discuss global warming or the Nobel Prize. The four questions Mr. Gore answered after his remarks were also limited to marketing.

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