The third report in the Ad Age
Insights' Shopper Marketing quarterly series
explores the world
of neuromarketing. In this report, you'll learn:
- How research firms are using neuromarketing to get beyond what
consumers say to ascertain how they truly behave
- How consumers' emotions are being measured and gauged to
predict how they will react to brands and brand messages
- What the skeptics think and how the Advertising Research
Foundation is taking steps to verify results and recommendations
for how to use neuromarketing findings.
By way of comparison, that $120 million is equivalent to what
Johnson & Johnson, Unilever, Coca-Cola Co., L'Oreal and
Colgate-Palmolive Co. spent combined on all measured internet
display advertising last year, according to Kantar Media.
About 80% of Triad revenue comes from such consumer
package-goods marketers, Mr. Murtagh said. The rest comes from a
host of other industries, such as insurance companies looking to
reach shoppers at eBay Motors to sell car insurance.
Triad, founded in 2004, now has 285 employees and sits squarely
in the middle of the two fastest-growing movements in packaged
goods -- digital and shopper marketing. As such, Mr. Murtagh said
he expects sales to rise 40% this year, about double the pace of
digital advertising spending overall.
"The whole idea behind Triad is to help retailers leverage the
traffic they get to their website and basically turn them into
publishers where they can establish IAB-standard ad units and
create packages to offer media agencies and brands," Mr. Murtagh
Retailers weren't even thinking about their sites this way in
2004, he said. Now, increasingly they are, be they retailers Triad
represents or those, like Target and Walgreens, that it doesn't.
The money retailers make, he said, tends to go to support their own
marketing spending -- though nothing prevents them from taking it
straight to the bottom line.
Like other shopper-marketing propositions, just about everyone
on one of Triad's retailer sites is shopping for something. But
it's not exactly a digital version of in-store advertising, because
consumers at those sites aren't necessarily there to buy right
Take Walmart.com. It had about 36 million unique visitors in
June, according to ComScore, compared to 95 million for Amazon.
That's similar to the roughly 1-to-3 ratio the two have long had.
But Walmart last year had only $4.1 billion in online sales,
according to Internet Retailer magazine, compared to more than $35
billion for Amazon -- a ratio of more like 1-9. A big part of that
difference is product research consumers do at Walmart.com before
shopping in a store.
So Triad's proposition is a lot like the "Zero Moment of Truth"
concept Jim Lecinski, managing director U.S. service and sales at
Google, has been pushing through talks and his recently published
"ZMOT" book -- that people go online and use search before buying,
even for CPG products, be it online or in store. Mr. Murtagh fully
agrees and said he sees his relationship with Google as symbiotic,
as Triad is a substantial buyer of Google search aimed at steering
people toward its retail websites.
Another perhaps non-intuitive take on what Triad does in shopper
marketing comes with one of its newer programs -- eBay. While it
may be associated with hard-core auction lovers, 70% of eBay's
sales are via the "Buy It Now" option, Mr. Murtagh said. And while
eBay ads target shoppers, they often target them in a
cross-merchandising effort. So, for example, people shopping eBay
for baby strollers may see ads for diaper brands.
In a similar way, ads on Walmart.com aren't necessarily linked
to products people are searching for. When Walmart last week
launched its new effort to link its Vudu streaming-video rental
service directly to Walmart.com, an advertiser on the page for
video rentals was Procter & Gamble Co.'s Crest 3D White, a
brand that also targets beauty-conscious consumers across a wide
variety of other entertainment-focused media.
Triad's revenue streams come about evenly from traditional trade
marketing budgets, shopper marketing budgets and standard brand
media budgets, Mr. Murtagh said, with 25 sales reps now in
Manhattan dedicated solely to media agencies.
And there's one big difference between the money a marketer
might spend on its trade funds to buy space in a store circular
from a retailer and the money spent to buy space on a retailer's
website via Triad. The money spent on Triad, he said, can be
represented as a marketing expenditure under current U.S.
accounting rules, he said. The money spent on the store circular
needs to be accounted for as a reduction of net sales -- generally
seen as less desirable in financial statement as it both depresses
the topline and doesn't show up as a brand investment.
Ads on retailer websites look to be doing better, at least from
a growth perspective, than ads on in-store TV networks. Players in
the latter space are privately held or don't break out revenue
separately. But analysis of financial statements of Technicolor,
the French company whose PRN unit handles Walmart's in-store
network in addition to several others, suggests PRN's total revenue
has never topped $250 million and has been falling in recent years.
After trying to sell PRN the past two years but getting no
satisfactory bids, Technicolor took the unit off the market earlier
"All the research I was ever privy to suggests that shoppers do
not go to stores to watch TV," said Ann Mooney, a former P&G
shopper marketing executive and now principal of Rising Moon
Consulting, Cincinnati. Shoppers tend to see in-store TV as just
more clutter, she said, and the messages at best work in short
sports or as static billboard-style ads.
But she said shoppers do appear more receptive to online display
ads at retailer websites, which come at a time when they're
gathering information and making lists even if they're not buying
right away. "When you think about it, you have to be there on some
of these big retailer sites, because of the traffic," Ms. Mooney
said. "Triad was able to help retailers figure out how much that
traffic was worth."