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September 03, 2005

Jamie Oliver vs. Stormhoek

Hatful of Hollow linked recently to a Wall Street Journal article on using econometrics to measure advertising impact. Sir Martin Sorrell from WPP Group is really championing econometrics, and the article featured a bit about the Jamie Oliver ads:

Econometrics uses statistical analysis to measure the relationship between different sets of events, such as the effect of educational qualifications on wage levels. To determine an advertisement's effectiveness, econometricians write an equation to measure the effect on sales of different factors, including the weather, price cuts and advertising. For the advertiser, the purpose is to help decide which ads to run...

British supermarket chain J Sainsbury says an econometric analysis of a long-running TV ad campaign, featuring celebrity chef Jamie Oliver, "probably" helped the chain decide to renew Mr. Oliver's contract earlier this year.

In 2002 the study found that ads that had run since 2000 had generated £1.12 billion ($2.03 billion) in revenue at a cost of £28 million a year. The analysis was done by a WPP-owned research consultancy, ohal, which continues to work for Sainsbury. More-recent data haven't been released.

Compare and contrast with Hugh Macleod's recent post on Stormhoek:

Although we can track the blogger's online conversations easily enough, we have no accurate way of measuring how many offline conversations the freebie thing is generating. Sure, we get anecdotal evidence of it all the time, like Damian's above, but so far it's impossible to measure directly.

Other marketing bloggers keep e-mailing me, asking me for numbers on how the campaign is affecting sales. Basically, they want a case study. They have products and ideas they want to sell to their clients, and they're looking to me to provide them with objective, third-party proof that this whole blogvertising thing actually works.

Well, the wine has been selling very well indeed, ever since the Blogger Freebie thing started. But that's just one part of the equation. Other factors include a damn good product, a good shelf positioning at the supermarkets, a marvellous sales team doing a great job, and also the fact that they now, like Damian, have a story (A) they genuinely like telling to other people and (B) other people don't seem to mind hearing.

So maybe it doesn't really need to be measured.

I wonder what econometricians would make of Stormhoek?

Posted by Adrian Trenholm on September 3, 2005 at 11:16 PM in Marketing | Permalink

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» Stormhoek v Jamie Oliver from Bazaarz
173 Drury Lane has a fascinating post that contrasts the econometrics model of accounting for ad value (Jamie Oliver + Sainsbury) and Hugh McLeods (Stormhoek) approach. The essence goes something like this: WPP Group (not mentioning Oliver&rsquo... [Read More]

Tracked on Sep 4, 2005 10:49:47 PM

» Stormhoek v Jamie Oliver from Bazaarz
173 Drury Lane has a fascinating post that contrasts the econometrics model of accounting for ad value (Jamie Oliver + Sainsbury) and Hugh McLeods (Stormhoek) approach. The essence goes something like this: WPP Group (not mentioning Oliver&rsquo... [Read More]

Tracked on Sep 4, 2005 11:30:13 PM

Comments

I think one thing the clever-dickie advertising chappies of the world always seem to underestimate is, how an advertising campaign affects the client's company on an internal level.

But they don't get paid for "internals". They just get paid for external "deliverables". Which relegates them to the permaent "peripheral" of the client's business. Which is why nowadays you see brands changing agencies so often.

The one question people who are watching the Stormhoek meme don't seem to be asking enough is, how is it affecting Stormhoek's internal culture? And how is that affecting sales?

Some people might think the meme is about turning bloggers into Stormhoek shills. It isn't.

Posted by: hugh macleod | Sep 5, 2005 12:16:23 AM

Hugh - are you saying that the direct positive feedback for Stormhoek is good for empoyee morale? For pride in the product? Do you think that in turn feeds good customer service and a willingness to engage yet more with customers, instead of hiding behind ads? Fascinating questions indeed.

The trackback from Bazaarz is also very interesting. Dennis crunches some numbers then asks:

is WPP really saying that without its ad efforts, Sainsbury would be in a worse mess? Is that the real message? Who’s going to admit to that?

Posted by: Adrian Trenholm | Sep 5, 2005 9:43:26 AM

"Hugh - are you saying that the direct positive feedback for Stormhoek is good for empoyee morale? For pride in the product? Do you think that in turn feeds good customer service and a willingness to engage yet more with customers, instead of hiding behind ads?"

Ermm.... how could it be otherwise?

Posted by: hugh macleod | Sep 5, 2005 7:10:41 PM

Point taken.

But what about if the feedback is direct and negative? Woudl that lead to a negative loop, with declining morale?

I suppose properly managed - ie if the staff are given an opporutnity to do something about negative feedback - it could still be a winning situation.

Posted by: Adrian Trenholm | Sep 6, 2005 2:38:10 PM

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