Speaker 1: David Ogilvie is probably the most famous advertising guru out there. I don't agree with everything that he says. I think he's a little bit too biased towards short-term sales and direct response types of marketing. However, he is highly experienced, so that alone is gonna give him credibility. He also relies a lot on market research, unlike a lot of advertising gurus. So what we're gonna do is we're gonna explore what David Ogilvie has to say on market research, and this comes from the book Ogilvie on Advertising. So what we're gonna walk through here is what he calls the 18 miracles of research. Number one is you can use research to measure your reputation. So that can be your reputation with consumers, or stakeholders, or the government, or employees, pretty much anyone that you want to. Second key benefit of research is that you can estimate the sales of new products before you go to market, and the ad spend that is required to maximize profit. So here he says the Hendry, Assessor, Sprinter, ESP, and News models are sufficiently reliable to tell you whether your product warrants the expense of test marketing. About 60% of new products fail in test markets. So you can see here that market research is going to be very important so that you don't over invest in products that have a high probability of failure. You can minimize that risk and minimize failure in terms of investment. Number three, get consumer reactions before a new product is launched. So even when the product is just in the concept stage you can get input on it so that perhaps you can revise the marketing or revise the product itself before you go to market. Number four, you can figure out how consumers rate your product compared to the competition. So this is going to be more useful when your product isn't just a concept but is almost fully flushed out and then you can see how people would compare it to the competition. One thing that I would do sometimes is get test reviews to see how somebody would rate a product before it goes to market and then you can make key decisions in terms of your go-to-market plan afterwards. Number five, you can figure out what combinations, so for example different flavors and colors, will appeal to the most people. So no doubt someone like Apple when they release something like the iWatch would likely do this to figure out all right well do we need to have a red model or a blue model or green or perhaps orange is trending right now with luxury goods like Hermes so perhaps we should introduce an orange strap. And then we can start culling other colors that perhaps are less popular right now, for example purple. We can also figure out what the best-selling packages will be. So I for example used a lot of Skype interviews to to guide the process of developing package design for consumer package goods. Number seven, you can figure out the best positioning so you could present consumers with different types of positioning. So positioning around one benefit versus another benefit or one feature versus another and see which one they prefer what resonates the most. Number eight, you can figure out the ideal target audience and you can define that audience whoever you want perhaps based on media consumption patterns or demographics etc. Number nine, you can figure out what factors matter most, so for example features, and what language consumers use. So this is really useful at the copywriting tactical level is figuring out well internally you might describe a problem or a solution in certain vernacular but out in the field the buyer uses different words and if you can use those words in your copywriting you'll have a more empathy and it'll resonate better. Number ten, you can figure out what line extension will sell best. So for example if you sell bar soap you might decide to introduce a liquid dish soap that would be a clear logical extension of the brand. Number eleven, you can figure out if there's waning desire for your product. So maybe you've had a product that's doing very well but now you can get some feedback from consumers that suggest maybe they're gonna switch soon because they're disappointed. For example you did some cost-cutting, you reduce the quality of the ingredients, which is something that consumer products companies do a lot to increase their profit margins. What they do is they start cutting costs, so they start introducing new packaging which is marketed as something good but actually what they've done is they've done cost-cutting. They're eliminating the hard packaging, replacing it with soft, or they start introducing ingredients that are cheaper. So with chocolate bars for example, perhaps using less nuts and more artificial stuffing, things like that. Number twelve, you're able to read your competitors test market. So I would say just in general market research can give you a better assessment of the competitive landscape. Number thirteen, you can figure out what is the most persuasive promise. So there are different things that you can promise with your product, with your brand. This research can help you determine which one to emphasize the most. And according to Ogilvy, this is the most valuable contribution of research, is figuring out what the most persuasive promise is. One way you can determine this is to ask consumers to rate promises based on their importance and their uniqueness. Another thing that you could do is you could run an experiment. So you can run two ads with different promises in the headlines, and then a free sample offer at the end. So the headline theoretically that is strongest is going to be the one that generates the most free sample requests. Now I would say you should take that with a grain of salt, because here all that we're testing is direct responses, whereas with long-term brand advertising that's gonna be less important. The other thing to note here is that David Ogilvy is talking more about magazine and newspaper ads. So this is the older version of what we would do with A-B testing when we're doing something like LinkedIn ads, Facebook ads, or Google ads. But you can certainly do this in newspapers and magazines, because that's what they did back in the day. Number 14, you can figure out what the best premiums are gonna be. So for example, some bonus offers to open a bank account like a toaster. Shell, for example, found out that steak knives were an effective premium. Number 15, you can figure out whether you are communicating what you want. So a lot of people just skim ads. Most people perhaps just read the headline in the primary image that you have in your ads. So you can do testing to figure out if people even understand what your ad is about. You'd be surprised how many people don't understand ads. And when you talk about competitors, for example, they actually draw the wrong conclusion that your competitor is better, even though you ran an ad talking about how you're better than the competitor. People get confused very easily, especially with things like analogies. It's just too complex for people to understand in the short period that they spend focusing on an ad. Number 16, you can figure out which commercials will sell the most. And one of the things Ogilvy tells us is that recall, ad recall, is something that is measured all the time. And even today it is used as a primary gauge of awareness, for example, with Facebook ads. But he says no one's been able to prove that it's actually correlated with sales. And we have a quote here from David Scott and says, when I want a high recall score all I have to do is show a gorilla in a jockstrap. So his point here is that just because you've increased ad recall doesn't mean that it's gonna have any impact on your sales. So you could create a very creative ad that's super entertaining, but it may have nothing to do with your product, nothing to do with generating sales. You've just artificially inflated the ability of people to remember your ad. Another case that Ogilvy talks about is when you use celebrities in your ads. Celebrities can increase recall, but they focus more on the celebrities than they do on your product. So that's why Ogilvy is biased against using celebrities in ads. So what he does recommend, however, is test the ability of your marketing to change brand preference. So rather than ad recall, what we're talking about here is preference. Number 17, you can figure out how many people read and remembered your ads. So it's very easy to measure these types of things with modern ads when we're looking at distribution through, for example, Facebook ads or how many people clicked your ads in Google. But it gets much harder when you're doing something like running billboards or radio ads or newspaper ads. So we can use research to figure out how many people actually read the ad and remember them among all the different things that are located in that newspaper. Number 18, and finally, research can be used to settle arguments. So an example he said here was they were thinking about showing fishing in ads, but then the testing revealed that consumers really weren't interested at all in fishing, particularly in the United States. So if you're having a dispute, for example, internally with your CEO or other people in the department, you can use research to ascertain the best approach to take in the future. Now, Ogilvy also highlights two things that he believes research cannot answer. And number one is what campaign will contribute the most to your brand over years. Now, he's saying that you basically just have to make a judgment call on that. Now, if you look at the research of Byron Sharp, you'll get some more sophisticated research into how advertising works over time. It's a very subtle force, but it's a very important one because essentially what you're doing is increasing the probability that somebody will buy your product ever so slightly. And when you scale that over perhaps millions of consumers, then the impact is large, but it's very much spread over time. So you need more than basic sales data to be able to show the effectiveness of advertising over time. Now, the second thing he says is that you cannot use research to determine what price you should charge. So there are probably people that are going to disagree with you on this. So, for example, I commissioned research from ProfitWell, from other research organizations where I'm looking at price sensitivity data and seeing how much people are willing to pay. So you can do some research on this. It doesn't necessarily mean you've determined the ideal price, but you can at least provide some some guidelines of what consumer expectations are in terms of price. And you can also turn to Simon Kutcher and Partners, which is the leading consultancy with the strongest reputation for pricing strategy. Now, David Ogilvie also talks a little bit about sample size, which is something academics fixate on a lot because they're trying to get statistical significance. Ogilvie's general advice is you don't really need large sample sizes. So he says, for example, you only need to interview 20 housewives to find out if they understand the word obsolete. So if you're choosing to use the word obsolete in your headline and your copywriting, that's something you could easily test by interviewing just a couple dozen people. He does say that you probably need large sample sizes when you're looking at things like measuring how trends over time are fluctuating. One of the key challenges when you're doing research is that people are going to tell you what makes them look good. They're not going to give you the most honest answer, the most useful answer. They're going to give the answer that makes them look like the best possible versions of themselves. So, for example, if people are asked the question, have you read Gone with the Wind? They're highly likely to say yes because it makes them seem sophisticated, smart, educated, whatever. Another example would be, would you prefer glass or a can? It's highly likely people are going to say glass because it seems more prestigious. It's less lowbrow. But that's not really what we're trying to get at when we're doing market research. We want the truth. We don't want some sugar-coated version of how people want to be perceived. So to address these challenges, one of the things you can do is you can use test questions to filter out liars. So, for example, I use Sentiment. So Sentiment is a survey tool that is sent to panels, so people that fill out the survey, like directors, for example. I caught people that were just lying. So you would have a question where it's like, answer A to this question, and they'll put B. So you know that that respondent can be thrown out the window in terms of the test results. Another thing that you can do is you can rephrase the question, so it's it makes it easier for people to give a response that is less socially acceptable. So an example here is instead of saying, have you read Gone with the Wind? You say, do you plan to read Gone with the Wind? Then people are more likely to say yes there rather than to say, no, I haven't read it. We're gonna close here with a quote and a picture of one of Ogilvy's most famous ads, and it says, I have seen ideas so wild that nobody in his senses would dare to use them until research found they worked. When I had the idea of writing headlines for French tourism in French, my partners told me I was nuts until research revealed that French headlines were more effective. So logically, without doing research, you would think if your audience spoke English that your ads, your headlines, should be in English. Now logically that makes sense if you're sitting in your ivory tower smoking a pipe and thinking about what works, but empirically if you actually go out and do the research, which Ogilvy did, he was able to show that having headlines in French to non-French speakers was actually more effective. It stood out and perhaps resonated with people that have an interest in going to France. So research is going to reveal things that are not intuitive, that are not obvious, and that's one of the most powerful ways that we can use research. Another example is that it helped him come up with the idea for this famous ad, so one of Ogilvy's most famous ads, perhaps not as famous as his Rolls-Royce ad, but still very distinctive, and it was the man in the Hathaway shirt and having him with an eyepatch, which seems like an absurd thing, but it was extremely effective and research is what led him in this direction. And if we look at more recent research in the 21st century with Byron Sharp and the Urenberg-Bass Institute, we actually find that one of the single most effective things that you can do in marketing is to have distinctive assets such as this, such as having a character with something that is very distinctive like an eyepatch. And that's, even though it seems very superficial, it's arguably one of the single most important aspects of your marketing.