Its All About The Pact - Final

It’s all about the Pact:
What Consumers Really Look for in Advertising

Practice
Stephen D. Rappaport, Howard R. Moskowitz, Roseanne Luth, Simon Chadwick1
Presented to: Empirical Generalizations of Advertising Conference

The Wharton School
University of Pennsylvania
December 4-5, 2008
Introduction
In this new advertising era of digital media and mobility, communication professionals
have the opportunity to observe consumer behavior, gauge impacts of digital media, and
create and evaluate strategy. Never has the ‘material of advertising practice’ been so
amenable to measurement, control, and modeling as today. Professionals are taking full
advantage of the chance to learn. Through their pilots, campaigns and experiences,
practitioners inevitably develop new mental models that provide working guides for this
changing world.
I, Rappaport, searched for an authoritative catalog of these models, but none exist, they
are scattered about in the occasional article (Wind 2006, Rappaport 2007), book chapter
(Plummer et.al. 2007), or blog post (Haque 2008)2. Experience as a student of new
media and astute listener of industry conversations suggest some working notions:
 Media and audiences are fragmented

 Interrupt-and-repeat advertising giving way to brand experience
 Consumers are in control
 Word-of-mouth is most important
 Relevance is king
 Advertising as service
Mental models like these drive advertising today. They lead to specific actions, based on
the way practitioners perceived the world to work. Those in charge of the media compete
mightily to find willing audiences. Advertisers create events and websites focused on
experience and interaction. They figure out how to cope with fast forwarding. They
1
Authors affiliations are, respectively, Advertising Research Foundation, Moskowitz-Jacobs, Luth
Research, and Peanut Labs.
2
Wind, Yoram, “Challenging the Mental Models of Marketing,” in Jagdish N. Sheth and Rajendra S.
Sisodia, Does Marketing Need Reform?, M.E. Sharpe, 2006; Rappaport, Steve, “Three Emerging Models
for Advertising,” Journal of Advertising Research, Vol. 47, Nr. 2, 2007; Joseph T. Plummer, et.al., The
Online Advertising Playbook, John Wiley & Sons, 2007; Umair Haque, The New Economics of Brands,
Harvard Business Publishing blog, “Edge Economy,” February 29, 2008, accessed November 23, 2008).
©2008. The ARF. All rights reserved. DRAFT – NOT FOR CIRCULATION OR 1
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promote and listen to consumers’ brand conversations. They try to crack the code of
advertising in social networks.
With so much industry talk and media coverage of these topics, I started questioning
whether this matched up with how consumers felt about these newer advertising
practices. I wanted to find out and enlisted the help of research leaders – Howard
Moskowitz, Roseanne Luth and Simon Chadwick to help me do so and collaborate on the
research. They are co authors of this paper.
Howard contributed his Ideamap.net technology and sample. Luth Research and Peanut
Labs contributed samples, described below. Our ‘team’ created a knowledge base. I’m
only going to scratch the surface today. There’s a lot more to be mined, but time is short,
and the big story is beguiling.
Research Objective
We set out to answer three questions:
1. How do consumers view advertising practice today?

2. What would consumers like to see more of?
3. What would consumers like to see less of?
Answering these questions gives us a sense of What IS and What SHOULD BE.
Our aim was noble: to identify consumer mindsets regarding advertising professional’s
mental model. The application, or so we thought, was quite simple. The advertising
community might hear us, and perhaps take these consumer mindsets into account when
thinking about what and how to communicate.
We found something else.
What the Study is NOT ABOUT

This study is about how consumers feel about the practice of advertising. It is not
concerned with frequently research topics, such as whether consumers like advertising,
advertising effectiveness, consumer response to advertising, nor did we research different
media to predict winners and losers.
Research Description
The study employed Ideamap.net, a patented experimental research protocol invented by
Howard Moskowitz, which borrows from conjoint analysis and takes it much further. In a
nutshell Ideamap.net takes individual statements about a topic, systematically combines
them on the fly, into groups of three or four statements called “vignettes,” and then asks
survey takers to rate them on one or two scaled questions. No two consumers see the
same set of vignettes, making it impossible to game the system. After the survey
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completes, programs kick off in the background that run analytic routines. The processed
data is available within 24 hours or less. The approach has been written up in dozens of
papers, presented at conferences, and most notably explicated in a recent Wharton book,
Selling Blue Elephants: How to Make Great Products that People Want Before They
Even Know They Want Them. Ideamap.net was co-developed with Wharton.
For this study, we employed 36 elements. Each consumer saw 48 different vignettes.
Using three different panels we acquired 1,114 survey respondents from Moskowitz
Jacobs (214), Luth Research (405) and Peanut Labs (495). Each company filled its quotas
within 24-48 hours. About 80% of logins completed the study, confirming that survey
takers found both the topic and Ideamap.net approach engaging.
The Research Stimuli
We identified six silos that capture most features of advertising practice today:
A. Media Environment
B. Reaching Consumers and Targeting Ads
C. Advertising Creative
D. Consumer Behavior
E. Brand Advertising
F. Advertising Industry
Each of these silos provides a different part of a snapshot about advertising practice, and
reflect the structure used by professionals. The silos are general, and probably don’t
convey much meaning to a typical consumer. Consumers think in specific terms, in word
pictures, which have concrete meaning and evoke feelings.
Each of the six silos comprised six different elements. It is the elements which talk about
the specific experience of advertising, and which have concrete meaning. These elements
are the heart of the project. They move beyond generalities to specifics, to phrases that
consumers find meaningful because of the fullness yet simplicity of the idea. Appendix I
presents the six elements in each silo.
When we talk about the results we will show impact or utility values of different
elements. Although we have lumped together six elements in each silo, the analysis treats
each of the 36 elements separately, as independent predictors of the consumer response.
This approach of treating elements as independent means that the structure we impose on
advertising practice need not be correct. The silos are merely bookkeeping devices, to
ensure that mutually contradictory elements, or elements that carry the same type of
message but with different content, never appear together in a single test stimulus.
Running the experiment:

We invited respondents to participate. The respondents received an email invitation,
clicked on a link and were directed to the interview.
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Respondents need to be oriented regarding the task they are to perform. The more
information of a general, task-related nature one provides to the respondent, the better the
interview will be in terms of a motivated respondent who knows what to do. On the other
hand, it is vital not to set up expectations about what is right or wrong. We presented the
respondent with an orientation page, describing the general nature of the study and the
scales to use.
Fig 1. Survey Orientation Page
Afterwards, the respondent went through 48 test screens, rating each one on two
attributes. Although this type of study may seem long, in fact most respondents enjoy it.
The stimuli are ‘assembled’ on the respondent’s computer very quickly, and change
automatically after the respondent assigns the ratings. Thus the task is quick, engaging,
not boring.
The test stimuli comprise short, easy-to-understand phrases, in bullet form, as we see
below in the figure. The respondent reads the combination, and assigns a rating to the
combination. The set of 48 combinations is unique for each respondent, ensuring no bias
due to creating just a few, representative stimuli that may incorporate unexpectedly
strong performing or weak performing combinations. Finally, each respondent evaluated
an individual set of stimuli, sufficient to create a ‘model’ for that person.
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Fig 2. A vignette with the first rating question.
Fig. 3. A vignette with the second rating question.
Setting the Stage: A Summary of the Sample:

Demographics, Media Behavior and Psychographics
At the final part of the survey we asked our respondents to profile themselves. Our
participants were media-experienced; a good number seem quite savvy. Brands are part
of consumers’ psychology and social fabrics. People like to be current on their favorite
brands, talk about them and share their experiences with those near or virtual.
Advertising remains an important source for consumer consideration, when they buy
goods and services. Our respondents trust their information finding skills. This admission
of trust suggests that they ‘vet’ and validate the advertised claims against knowledge-
bases the consumer constructs in his or her own mind. Finally, consumers are not all-
trusting. They are somewhat leery of the way companies use their personal information.
Sample Recruitment and Size

The sample totaled 1,113 people aged 16 on up. These individuals were recruited through
the Luth Research (vSavvy panel), Peanut Labs (Sample 3.0) and Moskowitz Jacobs
panels.
Each panel company employs different methods for recruiting, validating and rewarding
participating panelists. Descriptions may be obtained from each company.
Demographics
Compared to the population as a whole, our sample was generally proportional on key
demographics like gender, income and education. Across generational cohorts, Gen M
was about 10% over its incidence in the general population, and Baby Boomers were
about 10% under. See Appendix 2 for the data tables.
Media Behavior
The sample is media-involved: watching, listening and reading offline and online,
creating and contributing content, and controlling media with TiVO and DVRs. Blogs are
often sources of product news and opinions. In our sample 40% of the respondents read
blogs, and about 40% of the sample read blogs, and 31% contribute to them regularly.
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Which of These Activities Do You Do Regularly?
Watch, Read, Listen Contribute Content
Watch TV 80% Chat 52%
Listen to the radio 61% Upload photos 51%
Watch video online 59% Update your profile page 46%
Read books 58% Upload music 36%
Text 55% Post or comment to blogs 31%
Read magazines 53% Upload video 23%
Listen to music online 52% Use a file sharing service 22%
Read a newspaper 48% Manage a blog 19%
Read blogs 40% Create music or video 16%
Other 12%
Control Viewing
Record or watch 32%
TIVO or DVR
Psychographics
We asked participants a series of questions about their information needs regarding
brands, the place of word-of-mouth, and community participation. Here are Top 2 box
scores (Strongly Agree and Agree combined) that portray them as brand involved and
availing themselves of a variety of information sources.
“I like giving my advice on products I know well,” 68%

“I ask people for their advice on products they know well,” 61%
“I need to be in the know about products I care about,” 56%.
“I like being part of a community ... that cares about brands I'm 36%
passionate about,”
Our surveyed group displayed interested in brand knowledge and exchanging it with
friends, family, colleagues and communities. These conversations, combined with tools
like search and blogs are an important source for learning about new products.
“I mainly learn about brands ... from friends, searches, blogs, 55%
posts, websites, etc.”
They have confidence in the information they gather from all their different sources.
“I trust product information I find myself ... more than from any 53%
other source”
Advertising is one of those sources – an important source – that consumers factor in.
About one-third of the respondents felt that advertising will become less important,
whereas roughly equal numbers see advertising maintaining its importance or express
neutral views. So we found no consensus here.
“I expect that advertising will become less important to me” 37%
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Consumers express concern over the ways advertisers use their personal information
“Companies collect and use my personal information to benefit 24%

me”
Only one in four consumers agreed that they benefit from the personal data companies
collect on them. Half of the respondents disagreed.
Key Findings of the Total Sample

With this context, knowledge about WHO we sampled, we now move to the meat of our
presentation … consumers views of advertising practice.
Consumer-Perceived Advertising Practice Today

After each vignette was shown, we asked respondents to rate them: “How does this
vignette match your view of advertising in today’s world?” Answers ranged from “Not at
all” to “Perfectly.”
If thinking about advertising practice today were compared to a fast moving packaged
good, then our data suggest that advertising would be rather unremarkable, sit
innocuously on a lower shelf, often passed by and seldom examined.
Consumers scored most elements around neutral which surprised us. That is, they did not
see the element as being a general description of advertising practice today. Given their
experience with media and advertising, we expected to see some of the elements reflect
one or more of the mental models we noted at the top of this paper.
However, two elements did stand out for what advertising today is NOT like. The new
digital technology is not confusing, and people don’t pay for content. Consumers don’t
see themselves as paying more frequently for the programs, videos, articles, postings and
entertainment they enjoy today. And they feel that they are pretty comfortable using
digital media, which makes sense given the levels of media consumption and production
we reported above.
F5 You find new digital technology ... CONFUSING -8

F3 You PAY-FOR-CONTENT ... more often -7
What Do Consumers Want “More of” and Want “Less of”?

Consumers may be sanguine about today’s practices, but what would they really like
advertising to be? We thought, almost certainly, that consumers would express some
clear, perhaps even strong preferences. In order to make the preferences as sharply
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express-able and as unambiguous as possible, we recoded the “more like this, less like
this” ratings into two groups, so that the strongest values appeared as positive numbers.
That is, we did two analyses – one looking at what the consumers said they definitely
wanted, and the other looking at what consumers said they definitely did not want.
Given all the professional focus on advertising, we expected to see strong consumer
feelings. We were surprised again by the amount of neutrality expressed towards most of
the elements. Where we expected to see strong preferences for elements concerned with
one or more of the newer mental models such as consumer control, the desire for relevant
ads, engagement, advertising as service, and so forth, we didn’t find any. Instead
consumers felt very strongly about more conventional concerns. Here are the details.
Want Less Of
This analysis looks at the bottom of the scale. So, the numbers in the body of the table
reflect the conditional probability of a respondent saying ‘I want LESS of this’.
Consumers are saying: don’t make me pay, don’t make it hard or confusing, don’t
interrupt me, and give me some alternatives to big media.
The consumer wants LESS of this

F3 You PAY-FOR-CONTENT ... more often 10
F5 You find new digital technology ... CONFUSING 9
E1 Advertising INTERRUPTS you ... to get noticed 7
A1 Big media companies CONTROL ... what you watch, read and 6
listen to
The ‘less’ doesn’t only appear in the quantitative portion of the interview. Participant
verbatims3 reveal how aware they are and how clearly they know what they want:
It is important that it doesn't take my personal time, doesn't make me pay

for it (text messages and phone calls).
Be more direct and clear about what your selling. No more pop ups
online.
Advertising is so dense right now that it's almost suffocating. when i watch
tv, i get about five minutes of whatever show i'm watching, then i have to
wait another ten minutes through commercials before it comes back on.
it's VERY frustrating.
I would like advertising to not appear as advertising. I like it better when

advertising is done within the media content so that one doesn't have the
blatant interruption of the show you are watching.
3
All verbatims in this report are replicated as they were entered by the respondent. We did not modify
spelling or grammar in any way.
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I do not like when advertising and content seem to mix too much. It is
irritating when all tv shows are filled with product placements.
I really dislike when it interrupts me. If I am already online looking

something up, advertise on the side and I will look at it, pop it up and I
will never look at it.
Want More Of
What consumers want more of is simple -- advertisers should be forthright, honest and
good stewards.
The consumer wants MORE of this

F4 You expect advertisers ... to BEHAVE responsibly in all ways 7
The following verbatims give considerably more texture to the meaning of this notion of
‘responsibility’:
All the facts and no false advertising makes me want to read what they
have to say.
Advertisements that are completely clear of any spyware or malware.
Truthfulness in advertising. It's especially annoying when advertisements

incorporate blatant lies in order to exaggerate their image.
quality & trust of a product. Based on ads I want the product to work/ do
what the advertisement states.
That it is responsible and located in appropriate places. Also, remove all

billboards they are inappropriate and only pollute the sky.
Advertisers should be ethical and not infringe on privacy without explicit

permission
Advertising more of "green" products. need to reach more people and let
more know that there are green alternatives to a lotta the wasteful stuff we
use in everyday life
The Advertising Pact

When we began this research we thought that we could easily measure the consumer
interest in the newer advertising practices. We believed that consumers were as aware as
we were about what was happening, and that they would be strongly involved, with great
emotion. We as professionals were witnessing a revolution, where control was being
handed over to the consumer, or so we believed.
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Frankly, we were surprised that we didn’t happen upon a group of excited, vocal,
opinionated consumers, ready to ‘spill their guts’ and ‘tell us how it is’. Again we repeat
our surprise to discover that consumers in our study were so indifferent about newer
advertising practices.
Of course the participants were not totally indifferent. They were vocal on a handful of
elements that had to do with THEIR ability to watch, listen or read and enjoy it. That is,
it’s about THEM, not about ADVERTISING PRACTICE, per se! Perhaps this is the
most important finding of all. It’s our mental models, but it’s about the ‘THEM’ that
resides far away from our rarified, intellectualized abstractions.
We reconsidered our thinking, after pondering the data, and turning it upside down. It
became increasingly clear that there may be a ‘transaction’ going on, and that we had
happened upon a quid pro quo situation, unbeknownst to us at the start.
Consumers understand that content in any medium costs money to produce and
distribute, and that advertising support makes it available for consumption in almost any
form. Ed Keller, currently the boss of Keller Fay, but formerly head of Roper Worldwide,
told us that “most consumers consider advertising a fair price to pay” for media – a Roper
finding that’s held up for 30 years. Notice the word ‘pay’. It’s not about wanting to be
involved. Involved -- that’s our language. It’s about paying with their time to get
something. That something is content. It’s all about homo economicus, economic man in
a new situation, with a new technology.
The elements consumers want more of and the elements that consumers want less of
create, in ePoll CEO Gerry Philpott’s phrase, a “Pact between advertisers and
consumers.” The Pact governs the implied contract: “I’ll give you my time, attention and
money so long as you respect me and act honorably.”
What does the Pact sound like? Our respondents vividly expressed the Pact in replies to
the open-ended question. It’s important to note that the majority of writers offered
constructive comments, relating their issues and suggesting ways that advertising practice
could be more acceptable to them. They did not trash advertising nor did they say that
advertising has no value.
“What is important to me is that they are considerate, they don't

"interrupt" but incorporate products into life as it is.”
“It is important that I retain control over what I watch, read, and
listen to. I don't mind advertising if it is interesting to me and gives me
enough information to make informed decisions.”
“I do not like ads that use personal information to tailor ads to me. Ad
tailoring should be done in the same way it is on TV. By studying the
target market of a Web page and using that information, not by going
through the type in my e-mail, etc.”
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What happens when the Pact is broken? Here’s one outcome:
“Advertising is so invasive that it has become annoying. I find myself

NOT buying products because of ad campaigns. I especially resent
PAYING to see ads. For example I get extremely irritated by the ads at
the beginning of movies. I don't hate advertising but I see it as
something unavoidable like taxes and death. I do feel that boundaries
have been crossed about where and when ads displayed. I also feel
that many ads are sexist.’”
Is There a Single Way to Describe Advertising Practice?

To be honest, the Pact is a nice story. But we’re dealing with aggregated responses, and
these may mask segments or differences. This raises the question: do consumers look at
advertising practice the same way? If not, then how do they (segments), and do the
segments look differently at what they want more of or less of? Is there a single Pact, are
there multiple Pacts, or perhaps something else?
A Tale of Two Segments

Rigorous statistical routines power Ideamap.net’s analytic capabilities. These routines are
stock, they are not customized nor tweaked to fit the data. If segments are discovered,
they have mathematical and research integrity. The methods use conventional regression
to identify the individual-level coefficients for the model, principal components analysis
to reduce the redundancy across the 72 elements (two sets of coefficients, one for ‘is’ and
one for ‘want’), quartimax rotation to ensure simplicity, and finally k-means clustering to
divide the 1112 respondents into a limited number of groups. No fudge. We looked at the
most parsimonious segmentation, based upon the inputs.
We segmented the data and found two groups. Based upon the elements that ‘float to the
top’ across the set of 36, we called these two groups:
1) Advertiser Control (~70%), and
2) The Indifferent (~30%)
Segment 1: Advertiser Control

In today’s world of advertising practice, this segment sees advertisers controlling the
agenda, interrupting content and using whatever means necessary to reach consumers.
Segment 1 expects advertisers to behave responsibly, ostensibly to make advertising
practice more acceptable.
Segment 1 (Advertiser Control) sees this happening today

B6 Advertisers target SHOPPING ROBOTS ... you use 9
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B1 Advertisers want their ads seen ... by the LARGEST 7
AUDIENCES
F4 You expect advertisers ... to BEHAVE responsibly in all 6
ways
Three verbatims essentially reflect consumer views in this segment:
“I hate ads! If I am interested in a product, I'll seek the info I need...STOP

BOMBARDING ME WITH BULL!”
“i'd like advertising to be less ubiquitous-- i am really fatigued with not

being able to walk down a street without being bombarded not just by ads,
but by MOVING ads (tv screens on every subway entrance et cetera).
PLEASE let's tone this down a little!”
“Basically I think our lives are controlled by advertising because we

adversise for houses, foods, and even school. TV is just a list of
advetisements …”
In other words, this segment perceives being in the sights of a commercial onslaught and
wants relief. But they’re also saying something very important: I’m going to buy
products, maybe yours, but please reach me and talk with me in ways agreeable to me.
“It is important for advertising to be relevant to my interests, but not

suffocating in its presentation or integration in content.”
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Segment 2: The Indifferent
We called this group Indifferent because they do not express any clear tendencies like the
Advertiser Control segment. About two-thirds of their scores are squarely in the neutral
range, with the remainder describing advertising practice as “not like this.”
The Indifferent discriminate ads from content; they don’t see advertising as tailored or
personalized to them, nor do they see the capabilities to control their advertising
experience. Advertising is background to daily experience.
Segment 2 (Indifferent) sees this happening today

Nothing – they are indifferent to what’s happening!
Segment 2 (Indifferent) sees this NOT happening today

A5 You use PROFILE PAGES as media centers -5
B5 You CONTROL the information advertisers use ... to -5
communicate with you
C3 Brands PERSONALIZE their ads ... to you -5
C6 It's hard to tell ads ... from CONTENT -5
D5 SOCIAL NETWORKS and advertising ... don't mix -5
F1 Madison Avenue ... CENTER of the advertising industry -5
B2 Most ads you see ... relate to YOUR interests -6
B6 Advertisers target SHOPPING ROBOTS ... you use -6
D3 You expect that most advertising you see... directly RELATES -6
to your interests
D6 You control the ads you see ... through SOFTWARE and -6
PERMISSIONS
F3 You PAY-FOR-CONTENT ... more often -6
F5 You find new digital technology ... CONFUSING -8
These verbatims give a bit of insight into the Indifferent:
“all advertising does for me is show me what the world has created, some of
it is interesting but most of it seems quite boring to me”
“there is a wide variety of advertisements. It seems that a lot of the

advertisements are similar and by the same companies”
“most ads are boring i really don't pay attention to most of them...i either
leave the room, talk to friends or family...i buy what i think i want for me
and ads do not influence my mind”
What do the Segments Want “More Of” and “Less Of”?

With segments in hand, we now ask “Do they differ in what they want in advertising
practice?” We broke out what they wanted more of and less of. We were stunned: both
segments want the same things. And both perfectly mirrored the elements we observed
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among the total sample in the “more of” and “less of” categories. This is a very
important result. It means that there is probably a single, general Pact, even if the
respondents come to that Pact from different mind-sets.
Want Less Of
Consumers reveal more range when it comes to practice they would like to see less of.
But, here too, the segments agree – as did the total: keep it simple, keep it free, don’t
interrupt me and give me some options.
The Advertiser Control segment does not want advertisers interjecting themselves into
their conversations, which adds some dimension to the desire not to be interrupted.
The Advertiser Control segment wants less of

listen to
E6 Advertisers join the CONVERSATIONS ... you have with 5
friends
The Indifferent segment wants less of
listen to
Want More Of
When it comes to wanting more of certain practice, both segments agree on just one –
advertisers should conduct their affairs with a high level of integrity.
The Advertiser Control segment wants more of

F4 You expect advertisers … to BEHAVE responsibly in all 8
ways
The Indifferent segment wants more of
F4 You expect advertisers … to BEHAVE responsibly in all 7
ways
Across both segments, every other element not mentioned above came up with neutral
values. We interpret this to mean that whereas our study participants accept current
advertising practice, they don’t feel strongly about them.
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Two Routes Lead to the Same Destination: The Pact
For some time we were puzzled: why didn’t the segments express differently? We looked
into the data, re-ran the segmentation routines, and so on. We went through a lot of back
and forth. Every time we did, we got the same results.
Then it dawned on us: asking about advertising practice is not at all like studying taste,
product features or package design. In those areas sensory preferences vary, product
features appeal to different to people, and package designs are in the eyes of the
beholders. Satisfying difference is what that game is about.
In this case, people want the same “product” but take different routes to get there. The
segmentation shows the route, not the goal. In some ways this is like a sister and brother
who want to visit grandma. Sis likes to drive, brother likes to fly. Each uses different
means and has different experiences – Sis the road, with its routing, accommodation and
hospitality options, Bro with the choices available to the jet traveler. Yet both share the
goal of not just reaching grandma, but enjoying the shared time together which is
independent of their travel. The same is true for advertising practice.
The Pact for Advertising Practice: A New Mental Model

Articulating a handful of straightforward but profound ground rules, the Pact is the
consumer’s mental model, and different from those used by practitioners. The Pact
doesn’t start with content. Instead it says, “assure me that you’re a good brand and
company, and I’ll consider your offering and enter into a relationship with you … as a
customer, supporter of your cause, etc. Be as creative and innovative as you can be with
my interests at heart. But violate the Pact and I’ll turn away.”
The Pact goes beyond the transactional contract inherent in the “fair price to pay”
exchange of advertising for content. That contract – “we’ll give you popular content, and
you’ll tolerate the advertising,” reflected a simple seller-buyer relationship from an
earlier era. The Pact upends this old contract.
The Pact, we feel, teaches that practitioners can use most of tactics to get their sales
messages across. Consumers will listen, they may become convinced, they may get
involved, they may even buy. Occasionally they will shut out the advertising with
technology, or simply tune it out psychologically. Yet consumers are clearly aware that
there is a Pact. Consumers simply want to know. Consumers ask only that most content
be free and that they be allowed to enjoy that content in exchange for the most precious
possession they have – the moments of their lives.
Implications for Practitioners

The Pact provides new guidance for practitioners. Let’s consider five:
 Companies should clarify their values and practices
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Although this may sound boilerplate, clearly, consistently communicating a stance
helps consumers understand the brand and company, and help them identify where
the common ground is.
In one respondent’s words …
“[I want to know] The company's social responsibility and the

ethics involved in their advertising campaigns.”
 Ensure that the values and practices are aligned with those of the target consumers
The Pact provides guidance but isn’t generic. Brands need to understand the “terms
and provisions” best suited to their customers and prospects. Brands may need to
create a “portfolio” of Pacts that address different products or segments. A soft drink
company might have different Pacts for its flagship brand and youth brands. Similarly
a H&BA company might have versions for its female-oriented and male-oriented
brands.
Contrast these two statements. Each statement can become one “term” of a Pact for a
particular product. We are talking here of two Pacts.
“I would prefer to see advertisments that are able to get their point
across without using sexuality. For me, it distracts from the selling
of the product, rather than enhances it.”
“The people that is used during the advertistment MUST BE

EXTREMELY SEXY”
 The Pact guides new advertising practices
Innovating new practices – like advertising as service, enabling consumer control,

promoting word of mouth, tying into the green movement, for example, make sense
when informed by the Pacts brands form with their customers and prospects.
Practices serve by furthering the Pact.
“i would like advertising to be more open and truthful lay the

product out there for all who are interested in buying what ever
is being advertised”
Or practices may be ‘dead wrong’, as this verbatim shows:
“I really detest "green washing" in ads. We all know this type of

advertising is hogwash, very untruthful and disgusting … A lot
more actual fact and truth in advertising would be a blessing.”
DISTRIBUTION.
 Consumer research must listen
Understanding consumers in light of the Pact expands the research agenda and
broadens its scope. Research ought first to define the Pact. Then Research might do
well to monitor adherence to the Pact. It’s here that traditional marketing research
might work. But, its also here that the emerging discipline of ‘listening’, using so-
called listening tools, can monitor, dissect, and provide action-able insight from the
conversations people are having about brands and companies.
And what is the objective? Listening tells you whether the Pact is working. Armed
with that knowledge, brands can calibrate and adjust their plans and programs to
consumers in a true strategic context with high confidence.
 Pacts are direct investments in customers
Clearly stated, monitored and enforced Pacts reduce the costs consumers “pay” for
poor advertising practice in frustration, wasted time, and so on. Rooted in listening,
Pacts potentially offer strategic advantages to brands, because they will be able to
identify and use whichever practices provide the greatest benefit to consumers while
reducing unwanted costs that may drive them towards – or keep them with – a
competitor.
Howard would like to add a final note: “The Pact will be the North Star, the guide, even
when the road is hard to follow, difficulties hard to anticipate.”
DISTRIBUTION.
DISTRIBUTION.
Acknowledgements
The authors wish to thank Stacey Hall of Peanut Labs, Becky Wu, Corey Kucera and
John Alston of Luth Research, and David Moskowitz of Moskowitz Jacobs for their
assistance in fielding the research.
DISTRIBUTION.
Appendix 1. Category and Element List
Category1: Media Environment
A1 Big media companies CONTROL ... what you watch, read and listen to
A2 All media seem like TELEVISION
A3 You spend most of your time ... with ONLINE media
A4 You read, listen or watch ... whatever, whenever and wherever YOU WANT
A5 You use PROFILE PAGES as media centers
A6 MEDIA IS MEDIA ... offline or online doesn't matter
Category2: Reaching Consumers and Targeting Ads

B1 Advertisers want their ads seen ... by the LARGEST AUDIENCES
B2 Most ads you see ... relate to YOUR interests
B3 Advertisers reach you ... EVERY WAY and EVERY WHERE
B4 Advertisers show ads to you ... based on YOUR searches ... behavior... friends ...
psychology
B5 You CONTROL the information advertisers use ... to communicate with you
B6 Advertisers target SHOPPING ROBOTS ... you use
Category3: Advertising Creative

C1 Your job as a consumer ... LEARN about brands
C2 Advertising aims to ... get you TALKING about brands
C3 Brands PESONALIZE their ads ... to you
C4 Ads incorporate CONSUMER ... photos ... videos ... music, etc.
C5 Ads become more like MOVIES ... with stories and effects
C6 It's hard to tell ads ... from CONTENT
Category4: Consumers Behavior

D1 Most advertising ... just WASHES OVER you
D2 You COMBINE MEDIA ... to do whatever you want to do
D3 You expect that most advertising you see... directly RELATES to your interests
D4 What people you trust SAY about brands ... matters more than advertising
D5 SOCIAL NETWORKS and advertising ... don't mix
D6 You control the ads you see ... through SOFTWARE and PERMISSIONS
Category5: Brand Advertising

E1 Advertising INTERRUPTS you ... to get noticed
E2 Advertisers ENGAGE you in a brand EXPERIENCE
E3 Advertising provides SERVICE to you ... info, details, help, etc
E4 Brands LISTEN to you ... and RESPOND accordingly
E5 Advertising goes where YOU go ... stores, malls, waiting areas, etc.
E6 Advertisers join the CONVERSATIONS ... you have with friends
Category6: Advertising Industry

F1 Madison Avenue ... CENTER of the advertising industry
F2 Content, advertising, shopping, buying ... SEAMLESSLY INTEGRATE
F3 You PAY-FOR-CONTENT ... more often
F4 You expect advertisers ... to BEHAVE responsibly in all ways
F5 You find new digital technology ... CONFUSING
F6 Marketing and advertising ... becomes more INTENSE than ever
DISTRIBUTION.
Appendix 2. Data Tables
Demographics
Q2: What is your gender?
Female 593 53%
Male 520 47%
1113 100%
Q3: What is your age?

16-24 332 30%
25-44 475 43%
45-64 267 24%
65 or Over 39 4%
1113 100%
Q4: What is highest level of

education you have
completed?
High School 372 33%

College 490 44%
Graduate
School 125 11%
Professional
Degree 104 9%
Other 22 2%
1113 100%
Q5: For demographic purposes

only, which best describes your
ETHNICITY?
Black/African
American 90 10%
White/Caucasian 581 65%
Hispanic/Latino 84 9%
Asian 110 12%
American
Indian/Alaska
Native 8 1%
Other 26 3%
899* 100%
DISTRIBUTION.
Q5: For classification purposes
only, please indicate your
household income.
$25,000 or
less 221 20%
$25,000 -
50,000 375 34%
$50,000 -
$100,000 350 31%
$100,000 or
more 155 14%
Prefer not to
say 12 1%
1113 100%
Media Behavior
Watch, Read, Listen

Watch TV 80%
Listen to the radio 61%
Watch video online 59%
Read books 58%
Text 55%
Read magazines 53%
Listen to music online 52%
Read a newspaper 48%
Read blogs 40%
Contribute Content
Chat 52%
Upload photos 51%
Update your profile page 46%
Upload music 36%
Post or comment to blogs 31%
Upload video 23%
Use a file sharing service 22%
Manage a blog 19%
Create music or video 16%
Other 12%
Control Viewing
Record or watch TIVO or 32%
DVR
Note: Respondents could answer more than one activity. Base=899
DISTRIBUTION.
Psychographics
Q12: I need to be IN THE KNOW
... about brands I care about (1 =
Not at all ... 5 = Describes me
perfectly)
1----1 88 10%
2----2 82 9%
3----3 224 25%
4----4 277 31%
5----5 228 25%
899* 100%
Q13: I like giving MY ADVICE ...

on products I know well (1 = Not
at all ... 5 = Describes me
perfectly)
1----1 45 5%
2----2 73 8%
3----3 171 19%
4----4 215 24%
5----5 395 44%
899* 100%
Q14: I ask people for THEIR

ADVICE ... on products they know
about (1 = Not at all ... 5 =
Describes me perfectly)
1----1 53 6%
2----2 80 9%
3----3 214 24%
4----4 240 27%
5----5 312 35%
899* 100%
0%
Q15: I mainly LEARN about
brands ... from friends, searches,
blogs, posts, websites, etc. (1 =
perfectly)
1----1 79 9%
2----2 116 13%
3----3 208 23%
4----4 242 27%
5----5 254 28%
899* 100%
DISTRIBUTION.
Q16: I like being part of a
COMMUNITY ... that cares about
brands I'm passionate about (1 =
perfectly)
1----1 147 16%
2----2 174 19%
3----3 249 28%
4----4 164 18%
5----5 165 18%
899* 100%
Q17: I expect that advertising will

become LESS IMPORTANT to
me (1 = Strongly Disagree ... 5 =
Strongly Agree)
1----1 142 16%
2----2 152 17%
3----3 276 31%
4----4 156 17%
5----5 173 19%
899* 100%
Q18: I TRUST product information

I find myself ... more than from
any other source (1 = Strongly
Disagree ... 5 = Strongly Agree)
1----1 45 5%
2----2 86 10%
3----3 289 32%
4----4 231 26%
5----5 248 28%
899* 100%
Q19: Companies COLLECT and

use my PERSONAL
INFORMATION ... to benefit me
(1 = Strongly Disagree ... 5 =
Strongly Agree)
1----1 277 31%
2----2 184 20%
3----3 223 25%
4----4 104 12%
5----5 111 12%
899* 100%
DISTRIBUTION.
Q21: I prefer ads ... that are
INTERACTIVE (1 = Strongly
Disagree ... 5 = Strongly Agree)
1----1 214 24%
2----2 127 14%
3----3 269 30%
4----4 135 15%
5----5 154 17%
899* 100%
*Note: Base size of 899 reflects only the Luth Research and Peanut Labs samples.
DISTRIBUTION.

Its All About The Pact - Final

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Its All About The Pact - Final

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It’s all about the Pact:

What Consumers Really Look for in Advertising

Presented to: Empirical Generalizations of Advertising Conference

 Media and audiences are fragmented

1. How do consumers view advertising practice today?

We found something else.

What the Study is NOT ABOUT

The Research Stimuli

Running the experiment:

Fig 1. Survey Orientation Page

Fig. 3. A vignette with the second rating question.

Setting the Stage: A Summary of the Sample:

Sample Recruitment and Size

“I like giving my advice on products I know well,” 68%

“I expect that advertising will become less important to me” 37%

“Companies collect and use my personal information to benefit 24%

Key Findings of the Total Sample

Consumer-Perceived Advertising Practice Today

F5 You find new digital technology ... CONFUSING -8

What Do Consumers Want “More of” and Want “Less of”?

The consumer wants LESS of this

It is important that it doesn't take my personal time, doesn't make me pay

I would like advertising to not appear as advertising. I like it better when

I really dislike when it interrupts me. If I am already online looking

The consumer wants MORE of this

Advertisements that are completely clear of any spyware or malware.

Truthfulness in advertising. It's especially annoying when advertisements

That it is responsible and located in appropriate places. Also, remove all

Advertisers should be ethical and not infringe on privacy without explicit

The Advertising Pact

“What is important to me is that they are considerate, they don't

“Advertising is so invasive that it has become annoying. I find myself

Is There a Single Way to Describe Advertising Practice?

A Tale of Two Segments

1) Advertiser Control (~70%), and

2) The Indifferent (~30%)

Segment 1: Advertiser Control

Segment 1 (Advertiser Control) sees this happening today

Three verbatims essentially reflect consumer views in this segment:

“I hate ads! If I am interested in a product, I'll seek the info I need...STOP

“i'd like advertising to be less ubiquitous-- i am really fatigued with not

“Basically I think our lives are controlled by advertising because we

“It is important for advertising to be relevant to my interests, but not

Segment 2 (Indifferent) sees this happening today

Segment 2 (Indifferent) sees this NOT happening today

These verbatims give a bit of insight into the Indifferent:

“there is a wide variety of advertisements. It seems that a lot of the

What do the Segments Want “More Of” and “Less Of”?

The Advertiser Control segment wants less of

The Advertiser Control segment wants more of

The Pact for Advertising Practice: A New Mental Model

Implications for Practitioners

 Companies should clarify their values and practices

In one respondent’s words …

“[I want to know] The company's social responsibility and the

“The people that is used during the advertistment MUST BE

 The Pact guides new advertising practices

Innovating new practices – like advertising as service, enabling consumer control,

Practices serve by furthering the Pact.

“i would like advertising to be more open and truthful lay the

Or practices may be ‘dead wrong’, as this verbatim shows:

“I really detest "green washing" in ads. We all know this type of

 Pacts are direct investments in customers