TV is as powerful as ever and Advertising Advantage is making the most it. Jonathan Jackson reconnects with ADAD founders Luke Dean and Wally Muhieddine as they take their unique offering to the US.
Approximately 103.4 million people watched the Philadelphia Eagles pull off one of the greatest victories in Superbowl history. Aside from the game being a major talking point, and Justin Timberlake’s use of a holographic Prince, it is the ad slots that tend to capture the world’s attention.
Car ads, movie ads, calls to bring back Crocodile Dundee ads, food ads, the world is treated to some of the greatest and most creative advertising conjured up by ad execs.
Outside of the US, those ads are talked about long after the memory of the game has faded.
That is the power of TV advertising.
Think about it: over 100 million people sitting in their homes or at a bar watching TV and being influenced in some way by the lure of a product or service. It’s a cool cost of around US$5 million for a 30-second Superbowl spot. The US alone is a massive market and the Superbowl a great vehicle for key messaging. But take that message global and a world of opportunity opens up.
It’s that opportunity that Australian business Advertising Advantage (ADAD) has in its sights as it sets up US operations. We’re not just talking a global sporting event, but US TV in general.
ADAD is Australia’s only full service specialist performance TV agency. We first featured them a couple of years ago in the article Through the Looking Glass, when founders Wally Muhieddine and Luke Dean spoke about why they joined forces in 2003 to create a direct response advertising business, that stood out from agency focused advertising models.
Since that article, the company has matured considerably whilst still maintaining its reason for being: that all advertising must drive a real and measurable business benefit for its clients.
Underpinning this philosophy is ADAD’s Pay For Results TV campaigns.
“Our client billings have more than doubled in under three years,” says Muhieddine of the company’s continuing maturity and impact.
The reason for its success he says is that ADAD is “an agency that knows all that matters is the results you deliver clients. Results don’t lie – and to deliver them you need to be smart about how you buy media and measure outcomes.”
To explain that point Dean says, “Those that can innovate in terms of analytics and create real time responses both offline and online, build an effective optimisation platform for campaigns and drive dividends at scale, will be the companies that succeed.
“Our capability is to slice and dice the data, look at a dozen categories, cross-reference that with what we know around response and conversion metrics so we can drive success. We offer very smart, accountable and targeted campaigns that still have all the brand building, top of the funnel benefits of mass reach TV.”
As we alluded to above, ADAD is the only company in Australia that has skin in the game, which has also facilitated its success. The results focused ethos is part of the company’s DNA. It is legitimate, makes ADAD accountable and is one of the primary reasons behind a 110% growth in client billings.
“We are truly accountable and that means a lot to our clients,”
Muhieddine says. “Agencies don’t have skin in the game, but with our model clients can only pay for results. We walk the talk and that has been an enormous part of our growth.”
TV IS NOT THE ELEPHANT IN THE ROOM
Also maturing is television itself. That may sound strange when you consider that television is almost 70 years old, but the ways we watch television has expanded considerably and viewership across a range of devices continues to rise.
According to Roy Morgan, Australian households have an average 4.5 connected screens in addition to their TV sets. Yet, as you can see by the ACMA graph below, most people still watch their favourite programming on their 4K, UHD 60-inch sets.
And why wouldn’t they? The quality of picture is just so good these days.
Another factor in ADAD’s growth is TV is now available anytime, anywhere. A Think TV research report confirms that television advertising is as effective and as relevant today as ever. It drives more revenue per dollars invested than any other medium, advertising impact lasts longer and importantly, Australians rate TV as the number one influence on their purchasing decision.
Some of the key takeaways from the survey show that attention and sales are strongly correlated, TV commands twice as much active attention as YouTube and 14 times that of Facebook and with the same creative executions tested, TV generates greater sales.
ADAD has the analytics to back this.
“In terms of targeting and measurement, we have invested a lot in our platforms and we lead the way in connecting offline channels with online behaviour,” Dean says.
“There are a lot of exciting things happening in terms of Video on Demand (VoD), and catch up, where you can get more granular in terms of targeting, which complements the mass reach of linear broadcast TV. So we can take advantage of the compelling sight, sound and emotion of video content, delivering it to different screens at different times to drive customer acquisition at scale.”
ADAD has access to granular data about who is watching certain programming, when and where.
They can correlate what people are watching with whether they are spending more on furniture or homewares or buying pet food.
“TV has the largest possible audience that is responsive and cost effective. Naturally clients want volume but not at the expense of efficiency,” Muhieddine says.
This is not to say that other media isn’t considered. Facebook, YouTube and Google certainly have a place, but what the founders of ADAD have found is that TV still is the most effective medium to get a message across, and move the needle in terms of sales.
“No one is born with a desire to search Google for a brand. You need to create awareness at the top of the funnel to grow. If you can do it whilst also driving immediate sales then that’s the best of both worlds. And digital channels like search, Facebook and YouTube all have a role to play in converting the awareness and consideration TV builds,” Dean says. “The problem with digital media is there is a lot of noise, a lot of false clicks, and some concerning brand safety issues. But we take this into account and follow the consumer all the way through to purchase.
“In terms of targeting and measurement, we have invested a lot in our platforms and we lead the way in connecting offline channels with online behaviour.”
We do lead with television, but our campaigns take into account and measure all media channels.”
To put that into perspective if digital media proves to be better than TV, then that is where ADAD will spend the budget. However, TV is still the strongest medium when it comes to bang for buck.
Muhieddine cites the examples of Pepsi Co. and Unilever as brands that moved heavily to digital advertising only to go back to traditional mass market TV, “I think the pendulum swung too heavily in favour of digital over the last few years but smart brands are realising that the emotional impact, quality content and mass reach of TV is enormously powerful, with a more rational balance returning to the market.”
At its essence, TV has an emotional advantage: 80-inch screens and full surround sound means people are better engaged with a message. It also makes it easier to interact with other media.
“One of the major things to happen,” Muhieddine says, “is that if you see something you like such as a car ad, you can jump onto the website via your phone or tablet and follow up. People are multi-screening and that makes it easier for brands to capitalise on the moment, converting viewers to customers.”
THE INTERNATIONAL ADVANTAGE
As TV continues its renaissance as it now networks with complementary media, ADAD has its sights set on other markets.
With several US clients on the books, a move to the US was inevitable.
“We had the idea last year that we can take this proposition internationally,” Dean says. “There was a bit of a vacuum in the US in what we offer: Pay For Results TV with sophisticated measurement and true accountability. We have had great success already and our early campaigns over there have scaled enormously.”
If it can crack the US market, it would be a major achievement for ADAD. Even just 10% of the market would most likely generate billions of dollars. Or, perhaps, a Superbowl ad would suffice to start.
ADAD’s proposition certainly augurs well to accelerate scale in the US. Brands and consumers want the same things, and ADAD can communicate messages and target the right audiences to drive dividends.
The only thing ADAD need be mindful of is that TV buying is traded differently in different countries and some of the results are dissimilar.
“There are market nuances,” Muhieddine says, “but we have an experienced US team who understands those nuances and can translate our approach and extensive insight into local US market outcomes.”
From here it is all upside in the US.
Both Dean and Muhieddine agree that ADAD is once again in a growth phase.
“We are outpacing the market in terms of growth and now it is about taking our proposition beyond Australia’s borders,” Muhieddine says. “Based on current run rate the US market alone could double our revenues within 12 months.
“We can do good things with great brands and we feel we are just scratching the surface. 2018 is a big year of growing our presence.”