LAMAC Seminar Miami 2009

Page 1
Crisis without Precedents

- Video CNN -
“The day is born from the dark night”
- Video -
Don Schultz
Professor Emeritus of Service at Northwestern

University
Specialist in integrated marketing and
communications
Don Schultz
Promote to the right consumer; not just everyone.

• Indentify motives.
Build relationships, not just reach.
People buy from people they like.
Use media with which the consumers are involved
(engagement).
• Ratings don’t measure relationships, they measure opportunities-
to-see.
• The real issues are affinity and engagement.
Use multiplatform communications.
Agencies’ Top Management
CEOs
Worldwide
Regional
Premise
The world is going through an economic crisis without

precedents.
Media planning is going through a process of
modernization.
Now more than ever media buyers and advertisers
have to change the way they do things and find new
inspirational concepts.
Questions
1. Are you in agreement with this premise?
2. What do you think should be the role of cable TV?

Questions
2. What do you think should be the role of Cable TV?

Are you in agreement with this premise?
Mainardo de Nardis
CEO Wordwide OMD
Mainardo de Nardis
CEO Wordwide OMD
“A mix of art and science”

Mainardo de Nardis
CEO Worldwide OMD
“Creative brand-consumer connection”

Andrew Swinand
President of Global Operations Starcom
Andrew Swinand
“Discrete market segmentation”

Andrew Swinand
“Segmentation based on human experiences”

Andrew Swinand
“Exploit the digital era through interactive communications”

David Byles
Líder Latinoamé
Latinoamérica Mindshare
David Byles
Líder Latinoamé
“From persuasion to engagement,

From engagement to value exchange”
Mariano Román
CEO Regional MediaCom
Mariano Román
CEO Regional MediaCom
“Crisis equals Opportunity”

Edgar Tarazona
President LatAm
Universal McCann
Edgar Tarazona
President LatAm
Universal McCann
“The constant is change”

Questions
2. What do you think should be the role of Cable TV?

What do you think should be the role of Cable TV?
Mainardo de Nardis
CEO Worldwide OMD
Mainardo de Nardis
CEO Worldwide OMD
“Pay TV is the largest provider of quality

content in the region”
Mainardo de Nardis
CEO Worlwide OMD
“The content give you the context to create relationships…

The opportunity is in the partnership”
Andrew Swinand
Andrew Swinand
“Pay TV offers the opportunity to define audiences by

interests and experiences”
Andrew Swinand
“The right message, in the right place, in the right context is more
effective. Contextually relevant content is more memorable, more
action orientated and drives better purchase intent”
David Byles
Líder Latinoamé
David Byles
Líder Latinoamé
“Channels are BRANDS”

David Byles
Líder Latinoamé
“Pay TV owns strong brands, with values,

Based on content of quality”
David Byles
Líder Latinoamé
“Integrate brands with content”

David Byles
Líder Latinoamé
“Think of Pay TV as multiplatform brands, not just TV”

Mariano Román
CEO MediaCom
Mariano Román
CEO MediaCom
“We should not be afraid of innovation”

Edgar Tarazona
President Universal McCann Latam
Edgar Tarazona
President Universal McCann Latam
“Take advantage of Pay TV’s content and explore new ways

of brand integration”
The business world agrees with the
academic world that there is a need for
change
It is imperative to accelerate the adoption
of new models of thinking
The new model is being built based on
ENGAGEMENT
What is How do we apply it
engagement? to brand
development?
How do we apply How is it

it to media measured in
strategy? TV?
Bobby Calder
Distinguished Professor of Marketing,

Kellogg School of Management
Bobby Calder
We are in a transition to a new model of marketing

that will prevail over the challenge of hyper-
competition.
The new trend in branding is building brands based
on motivational engagement.
The media companies need to transition from selling
time and space to selling their brands.
• These brands can help provide the motivational
engagement that the new model of branding demands.
What are we doing in Latin America in
regards to this?
Pioneer study on engagement in
Television in Latin America
Engagement and
Advertising Effectiveness
in Television in Latin
America
Bobby Calder
Professor “Charles H. Kellstadt” de Marketing, Kellogg School of Management
Director of the Center for Cultural Marketing
Edward C. Malthouse
Professor of Integral Marketing Communications in Northwestern University
Specialized in media and data mining
Co-editor of The Journal of Interactive Marketing
Objectives
•Evaluating the relationship between engagement and

advertising effectiveness
•Evaluating the profile of several

programs and channels
based on the different experiences that make up
engagement
•Evaluating how congruency between message and

context potentializes advertising effectiveness
Bobby Calder
Ed Malthouse 49
Non-Objectives
•We are not here to say that one program is better than
another
•We are not here to say that one channel is better than
another
•We are not here to say Pay TV is better than Broadcast
TV
•We are not here to evaluate any network’s quality
Bobby Calder
Ed Malthouse 50
Why these two professors?
Bobby Ed
Calder Malthouse
• Because they are the two professors with the longest history of
exploring engagement in media.
• They have explored engagement in a sophisticated way, based on
human experiences.
Bobby Calder
Ed Malthouse
Why these two professors?
Bobby Ed
Calder Malthouse
Joint studies related to media and engagement

1. Engagement and Advertising Effectiveness, Kellogg on Media and Advertising, 2008
2. Media Engagement and Integrated Marketing, Nikkei Journal of Advertising, 2007
3. Qualitative Effects of Magazines on Advertising Effectiveness, Journal of Advertising, 2007
4. The Demographics of Newspaper Readership, Journal of Media Business Studies, 2006
5. Qualitative Media Measures: Newspaper Experiences, International Journal of Media Management, 2004
6. Measuring Newspaper Readership: A Qualitative Variable Approach, International Journal of Media
Management, 2002
Bobby Calder
Ed Malthouse
Why OTX?
• They have developed many studies on engagement in

media.
• They have a specialized study to evaluate advertising

effectiveness.
Bobby Calder
Ed Malthouse
Why these three countries?
• Argentina, Colombia and Mexico represent 60% of Pay TV

Households in Latin America
Distribution of Pay TV Households - LatAm
Argentina,
Rest of LatAm,
21%
40%
Colombia, 18%
Mexico, 22%
Bobby Calder
Ed Malthouse
What is Engagement?
Engagement is the group of experiences of a person

towards a medium’s content.
Experiences are the thoughts, feelings and beliefs of an

audience about a medium.
Bobby Calder
Ed Malthouse 55
How can we catalogue these experiences?
Utilitarian
Social Projection
Identity Emotional Inspirational
Bobby Calder
Ed Malthouse 56
Social
• This program gives me something to talk about.

• It frequently comes up in conversations.
• I love talking about it with my friends and peers.
Bobby Calder
Ed Malthouse 57
Utilitarian
• This programs gives me good advice and tips that I can apply in
my daily life.
• I get ideas just watching it.
• I learn how to do new things.
Bobby Calder
Ed Malthouse
Projection
• This program takes me away from my daily life, I can picture
myself in the places and times that it shows.
• When I see it I can escape my reality.
• It helps me relax
Bobby Calder
Ed Malthouse
Inspirational
• It makes me feel that I can do important things in my life, and it

inspires me to match what other people have done.
Bobby Calder
Ed Malthouse
Emotional
• I get emotionally involved in the program
Bobby Calder
Ed Malthouse
Identity
• It makes me feel like I belong to a club
• This channel reflects the way I want others to perceive me
Bobby Calder
Ed Malthouse
How do we evaluate an experience?
Example: Projection
It is evaluated by asking the following questions:
Can you indicate how much you agree with the following statements?
• This is the type of the program that takes my mind off things
that are going on in my life.
• This is the type of program that makes me picture myself in the
places and times that it describes.
• This is the type of program that allows me to forget my reality
when I watch it.
Experiences: Social, Utilitarian, Projection and Inspiration

Bobby Calder
Ed Malthouse
Technical Info
Bobby Calder
Ed Malthouse
Technical Info
• Methodology
• Argentina, Colombia and Mexico
• Online survey
• Each participant was recruited based on the TV genre that he/she
watches
• The same 4 spots were imbedded in each mini-program
• The study was divided in 6 cells for each country: 4 cells for Pay TV and
2 for Broadcast TV
• Target
• Men (50%) and women (50%) 18-54
• Have Pay TV
• Watch TV for more than 10 hours a week
• Sample
• 1350 surveys
• 225 surveys per cell (divided by the three countries)
Bobby Calder
Ed Malthouse
Cell Composition
Countries Channels Programs Brands
Mexico
Argentina
Colombia
Bobby Calder
Ed Malthouse 66
Results: Engagement in Latin America
Bobby Calder
Ed Malthouse
Key finding
• We found that in all countries, all cells and all programs

there is a positive correlation between engagement and
advertising effectiveness
Bobby Calder
Ed Malthouse
Engagement and advertising effectiveness
Bobby Calder
Ed Malthouse
Greater engagement = Greater Purchase Intent
Mexico Ch1 - Beer

More Purchase
Mexico Ch 2 - Movie
Mexico Ch 3 - Auto
Intent
Mexico Ch 4 - Cleaner
Colombia Ch 1 - Beer
Colombia Ch 2 - Movie
Colombia Ch 3 - Auto
Less Purchase
Colombia Ch 4 - Cleaner
Intent
Argentina Ch 1 - Beer
Argentina Ch 2 - Movie
Argentina Ch 3 - Auto
Argentina Ch 4 - Cleaner
Less Engagement More

Engagement
Purchase Intent Bobby Calder

(Congruent Ad) Ed Malthouse
(Top 2 Box - indexed to country overall)
Attitude towards Ad per Brand in Mexico
Average Index: 114

5 140
113 115 113

120
4 104
Attitude Towards the Ad
3.37 100
3.05 3.07 3.02
Growth Index
2.94
3 2.66 2.75
2.61 80
60
2
40
1
20
0 0
Audi Victoria Terminator Glade
People with high engagement with the program

People with low engagement with the program
Growth Index
Attitude towards the ad is calculated based on the following questions:

“Would you describe the ad as emotive/motivating/likeable?” Bobby Calder
Ed Malthouse
Attitude towards Ad per Brand in Argentina
Average Index: 110
5 140
112 115
111 120
4 104
Attitude towards the Ad
3.4 3.27 100

3.13 3.11 3.09
Growth Index
3 2.8 2.81
2.68 80
60
2
40
1
20
0 0
Renault Heineken Harry Potter Lysoform

Growth Index

Ed Malthouse
Attitude Towards ad per Brand in Colombia
Average Index: 113
5 140
116 116
109 110 120
4
Attitude towards the ad
3.47 3.43 3.53 3.46

3.21 100
3.16
2.98 2.97
Growth Index
3
80
60
2
40
1
20
0 0
Audi Redds Terminator Glade

Growth Index

Ed Malthouse
Purchase Intent by Brand in Mexico
Average Index: 119
10 116 140
124 122 8.74
9 114
120
7.75 7.56
8 7.47 7.31
7 6.55 100
6.32
Purchase Intent
Growth Index
5.88
6
80
5
60
4
3 40
2
20
1
0 0
Audi Victoria Terminator Glade

Growth Index
Purchase intent is measured in a 1-10 scale

Bobby Calder
Ed Malthouse
Purchase Intent by Brand in Argentina
Average Index: 111
10 140
104
9 113 115 113
7.9 8.07 120
7.73
8
6.86 7.05
6.79 100
7
Purchase Intent
6 6.24
Growth Index
6
80
5
60
4
3 40
2
20
1
0 0
Renault Heineken Harry Potter Lysoform

Growth Index

Bobby Calder
Ed Malthouse
Purchase Intent by Brand in Colombia
Average Index: 119
11 130 126 140

109
10 110
8.89 120
9 8.48
8.15 8.05
7.78
8 7.34 100
Purchase Intent
6.74
Growth Intent
7
5.98
6 80
5
60
4
3 40
2
20
1
0 0
Audi Redds Terminator Glade

Growth Index

Bobby Calder
Ed Malthouse
A single program can have different engagement levels
depending on the experience
Bobby Calder
Ed Malthouse
Engagement takes place at three levels:
•Channel
•Program
•Spot
Bobby Calder
Ed Malthouse
Mexico - Programs
Bobby Calder
Ed Malthouse
Two and a Half Men– Warner – Projection - Mexico
Two and a Half Men helps me escape from my daily

life
7.16
6.48
Engagement
5.11
4.36
Social Utilitarian Projection Inspirational
Experience
Bobby Calder
0-10 Scale Ed Malthouse
24 – Fox Channel – Projection and Social - Mexico
24 projects me to a different reality, and gives me

something to talk about with my friends
7.82
7.43
Engagement
5.92
5.14
Experience
Bobby Calder
News Hechos Noche – Azteca 13 – Social – Mexico
Hechos Noche is a source of conversation topics

for me
7.89
Engagement
6.56
6.28
5.66
Experience
Bobby Calder
Mexico - Channel
Bobby Calder
Ed Malthouse
History Channel– Social – Mexico
History Channel gives me something to talk about
8.54
8.12
Engagement
7.8
7.48
Experience
Bobby Calder
Argentina - Programs
Bobby Calder
Ed Malthouse
Numb3rs – A&E – Projection - Argentina
Watching Numb3rs takes me away from my

reality
7.13
Engagement
6.01
5.7
4.89
Experience
Bobby Calder
Clean House – Discovery H&H – Utilitarian - Argentina
Clean House gives me very good tips for my

house
8.1
Engagement
6.79
6.13
4.89
Experience
Bobby Calder
News – Telefe – Social - Argentina
Watching Telefé News provides me with

conversation material
7.03
6.58
Engagement
5.14
4.97
Experience
Bobby Calder
Argentina - Channel
Bobby Calder
Ed Malthouse
TNT – Projection - Argentina
Watching TNT takes me away from reality
5.78
5.35
Engagement
4.08
3.6
Experience
Bobby Calder
Colombia - Programs
Bobby Calder
Ed Malthouse
How I Met Your Mother – Fox Life – Projection and social - Colombia
How I Met Your Mother takes my mind off my daily life,

and gives me something to talk about with my friends
7.36
7.19
Engagement
6.56
6.45
Experience
Bobby Calder
C.S.I. – AXN – Projection - Colombia
I like to imagine I’m part of the C.S.I team
7.59
7.16
6.58
Engagement
5.16
Experience
Bobby Calder
News – Caracol – Social - Colombia
Watching the News on Caracol gives me

something to talk about
7.6
Engagement
6.49
5.82
5.36
Experience
Bobby Calder
Colombia - Channel
Bobby Calder
Ed Malthouse
Discovery Channel – Utilitarian – Colombia
Discovery Channel teaches me useful and

practical things
8.8
8.46
Engagement
8
7.87
Experience
Bobby Calder
Congruency
Bobby Calder
Ed Malthouse
What is congruency?
• It is creating a coincidence between the experience of an

ad, and the experience of a program
• Congruency potentializes the existent engagement a
consumer has with the medium
• Therefore, it increases advertising effectiveness
Bobby Calder
Ed Malthouse
Key Finding
• We found examples which prove that congruency

contributes to increase the advertising effectiveness
created by engagement
• Two studies combined for the first time
Bobby Calder
Ed Malthouse
Mexico
WITHOUT CONGRUENCY WITH CONGRUENCY
Bobby Calder
Ed Malthouse
Mexico
Audi in Clean House of Discovery H&H: there is NO

congruency
10
9
Program
8
Engagement
5
Ad
4
Social Utilitarian Projection Inspiration
Bobby Calder
Ed Malthouse
Mexico
Audi in 24 of FOX: there IS congruency
8.5
8
7.5
Engagement
7
6.5
6
5.5 Ad
5 Program
4.5
4
Bobby Calder
Ed Malthouse
Mexico
Purchase intent increases 8.5% when there is

congruency
7.3
%
8.5
6.7
Without Congruency With Congruency
Audi Purchase Intent

Bobby Calder
Ed Malthouse
Argentina
Bobby Calder
Ed Malthouse
Argentina
Lysoform in Seinfeld of Sony: there is NO

congruency
7
6.5
6
Engagement
5.5
5
4.5 Program
4 Ad
3.5
3
Bobby Calder
Ed Malthouse
Argentina
Lysoform in Clean House: there IS congruency
10
9
8
Program
7
Engagement
6
5
4 Ad
3
2
1
0
Bobby Calder
Ed Malthouse
Argentina
Purchase intent increases 7% when there is

congruency
7%
7.5
Lysoform Purchase Intent Bobby Calder

Ed Malthouse
Colombia
Bobby Calder
Ed Malthouse
Colombia
Glade in C.S.I. : there is NO congruency
10
9
8
Engagement
7
6 Ad
5 Program
4
3
2
1
0
Bobby Calder
Ed Malthouse
Colombia
Glade in Clean House: there IS congruency
10
9
8 Program
7
Engagement
6
Ad
5
4
3
2
1
0
Bobby Calder
Ed Malthouse
Colombia
Purchase intent increases 9% when there is

congruency
9%
8.2
Glade Purchase Intent

Bobby Calder
Ed Malthouse
Conclusions
• Engagement is a universal concept, it can be observed in

all the countries and categories included in our analysis
• Engagement is a composition of different experiences
• Engagement has a direct relationship with advertising
effectiveness
• Each channel has a different profile according to its
experiences
• When there is congruency between the experience of an
ad and the experience of a program, there is a positive
effect on the advertising effectiveness
• Creating congruency is more an art than a science
Bobby Calder
Ed Malthouse
Conclusions
Conclusions
The crisis is real.
Academics and top industry executives agree on the need for

change.
The new paradigm is being built based on the concept of

engagement.
We conducted this study to make this new reality evident in

Latin America.
Channels, agencies and advertisers have the opportunity and

the responsibility to take action.
For Agencies and Advertisers
Take into consideration the measurement of engagement as a

key variable in media planning not just ratings and CPM.
Partial and individual Engagement as a

advancements syndicated metric
• Research on specific brands and •Consensual concept
media • Systematic and holistic
•Associated indicators / Symptoms measurement
•Pre-optimization or weighting • Integrated to optimizers
For Networks
We need to sell differently.

We need to understand the essence of our brand.
We need to understand the essence of our client’s
brand.
Sell brands, not just time and space.
Don’t be afraid to innovate, be bold.
Don’t focus only on the numbers, but move towards
engagement and brand value.
Construct creative, organic and multiplatform
proposals that will help us create an interactive
communication.
For All of Us
This is a historic opportunity for us to play a

leading role in the change of our industry.
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Page 1

Crisis without Precedents

Professor Emeritus of Service at Northwestern

Promote to the right consumer; not just everyone.

The world is going through an economic crisis without

1. Are you in agreement with this premise?

2. What do you think should be the role of cable TV?

1. Are you in agreement with this premise?

2. What do you think should be the role of Cable TV?

“A mix of art and science”

“Creative brand-consumer connection”

“Discrete market segmentation”

“Segmentation based on human experiences”

“Exploit the digital era through interactive communications”

“From persuasion to engagement,

“Crisis equals Opportunity”

“The constant is change”

1. Are you in agreement with this premise?

2. What do you think should be the role of Cable TV?

“Pay TV is the largest provider of quality

“The content give you the context to create relationships…

“Pay TV offers the opportunity to define audiences by

“Channels are BRANDS”

“Pay TV owns strong brands, with values,

“Integrate brands with content”

“Think of Pay TV as multiplatform brands, not just TV”

“We should not be afraid of innovation”

“Take advantage of Pay TV’s content and explore new ways

How do we apply How is it

Distinguished Professor of Marketing,

We are in a transition to a new model of marketing

•Evaluating the relationship between engagement and

•Evaluating the profile of several

•Evaluating how congruency between message and

Joint studies related to media and engagement

• They have developed many studies on engagement in

• They have a specialized study to evaluate advertising

• Argentina, Colombia and Mexico represent 60% of Pay TV

Distribution of Pay TV Households - LatAm

Engagement is the group of experiences of a person

Experiences are the thoughts, feelings and beliefs of an

Identity Emotional Inspirational

• This program gives me something to talk about.

• It makes me feel that I can do important things in my life, and it

• I get emotionally involved in the program

Experiences: Social, Utilitarian, Projection and Inspiration

• We found that in all countries, all cells and all programs

Mexico Ch1 - Beer

Less Engagement More

Purchase Intent Bobby Calder

Average Index: 114

113 115 113

People with high engagement with the program

Attitude towards the ad is calculated based on the following questions:

Average Index: 110

3.4 3.27 100

People with high engagement with the program

Attitude towards the ad is calculated based on the following questions:

Average Index: 113

3.47 3.43 3.53 3.46

People with high engagement with the program

Attitude towards the ad is calculated based on the following questions:

Average Index: 119