Articles of Interest

Tuesday, October 19, 2004

Jack Myers article about Phase One - WWII Intelligence applied to advertising

TODAY'S COMMENTARY by Jack Myers Monday, October 11th 2004
Jack Myers Report
WW II Intelligence Systems Being Applied to Advertising
By Jack Myers

"PhaseOne offers clients a validated methodology to forecast the impact of proposed marketing communications at an early stage in the creative process before a campaign is launched."

"When your goal is to influence people through communications, you learn there are more similarities among people than there are differences. Those similarities are what our system is based on," PhaseOne founder and president Jody Moxham told me in an exclusive interview in which she disclosed, for the first time in detail, several of the working principles behind the company's secretive formulas for predicting the performance of advertising communications.

The formulas and system's used by PhaseOne were originally derived during World War II as elements of classified work of U.S. and British intelligence analysts who developed the science of content analysis to a point where it was able to successfully predict enemy behavior based on public communications. Since 1973, PhaseOne has been refining these techniques of content analysis into an analytical system for evaluating advertising during its early stages of development. And in 2003, PhaseOne hired as its COO a former senior CIA operative to head its marketing and development and has retained television veteran David Percelay to help guide its strategic planning activities. Reynold (Ren) Stelloh, spent 25 years with the Central Intelligence Agency in several different capacities. His operational assignments included senior leadership and management positions domestically and overseas. While several companies, including MarketCast, OTX, IAG and Starch offer research to measure the creative performance of television commercials and other advertising, PhaseOne is the only service that uses content analysis to determine the messages being communicated by an advertisement, how persuasive the message is, the psychological impact of advertising, and whether the advertising objectives are likely to be met. PhaseOne has analyzed advertising from radio, television, print, direct response and packaging media. Companies that have used the system have been extending its analytical process into public relations, government affairs, speeches, educational materials, recruiting, advertising agency reviews and selection, product design and forecasting competitors' behavior. "All communications shape attitudes and attitudes shape behavior." Moxham commented. "Companies need to understand what it takes to elicit desired behavior from their target audiences. We provide the tools to help marketers understand how all stages of communications at all stages of their development impact consumers."

Because of restrictive confidentially and non-disclosure agreements, Moxham claims little can be publicly said about PhaseOne's specific relationships with AT&T, GM, Campbell Soup, Gillette, Nestle and others. Research conducted on behalf of Duracell was first runner up for the 2004 David Ogilvy Awards for Excellence in Advertising Research. Moxham adds "marketers also use us to determine which agency is in sync with our market intelligence, and agencies hire us for new business pitches."

Moxham touts the research and intelligence that contributed to Chevrolet's "Heartbeat of America" campaign more than a decade ago as a breakthrough success for the PhaseOne systems. "Chevrolet was considering closing down the division. No new cars were planned. There were no new designs. Market share had continued to decline and Chevrolet was not a part of the auto consideration set. We analyzed a year of auto ads to understand Chevy's strategic directions and the directions of their competition. We married that with the brands that were showing market strength and market vulnerability. Once we got that framework, we found most auto advertising was rational and feature driven but there was no emotional advertising." Campbell-Ewald, Chevrolet's agency at the time led by creative guru Sean Fitzpatrick, used PhaseOne as a management tool to assure every piece of creative delivered a compelling emotional message coordinated around the successful "Heartbeat" campaign.

Contacted in Virginia, where he now lives, Fitzpatrick told Jack Myers Report "In the early 80's, I was desperate to find a way to leverage Chevy work out of the morass that Detroit advertising was mired in. One of the sources I looked at was PhaseOne and their ability to deconstruct commercials in script form. We were under the gun to get good scores on a variety of recall tests. Chevy was in a giant nose dive and you know who gets the blame when things are not good. So I was willing to give PhaseOne a chance to prove they could do what they said they could do. It worked like a charm and not only predicted scores but also provided excellent observations about our scripts."

"In essence, we started using PhaseOne to improve our scripts and boards, make them more explanatory to the client so she knew what she was getting and provide a common language and reference point for creatives, account people and clients for the discussion of creative work. We gave PhaseOne a commission to study the automotive market (television commercials). They came back with a fascinating and illuminating study that resulted in our ability to sell a strong new strategy to Chevy. That strategy led to the Heartbeat of America. Needless to say we used PhaseOne for a number of years after that. I think they are damn good, damn smart and have a technique that no one else has in the business. Although traditional research people are usually hesitant to use it because it is not strictly research, most creatives, account and clients usually love it once they understand it."

"PhaseOne offers clients a validated methodology to forecast the impact of proposed marketing communications at an early stage in the creative process before a campaign is launched," Stelloh told Jack Myers Report. "The value, of course, is in optimizing creative, production, and media expenditures in time to make a real difference. By comparison," he adds, "other research services offer an array of services to track, assess, and measure advertising effectiveness once a campaign is already in flight. In addition, while most other services depend on consumer panels, the PhaseOne System does not." Several of these methodologies are compatible and used by marketers and agencies in tandem. "There are two aspects to the PhaseOne methodology," says Stelloh. "First is a knowledge system of accumulated insights about how people are motivated and persuaded, using descriptors such as Maslow's Hierarchy of Needs. The second stage is applying how people process and absorb information and then move ideas from short to long term memory and persuasion."

PhaseOne received recognition last year in TV Guide Magazine for a study reporting Americans were exposed to an average of one hour of commercials and promotion for every three hours of programming content. PhaseOne also reported TV viewers were likely to see four to five "pop-up" product placements every night. "We did our original clutter study in 1991," Moxham reports. "Advertisers were struggling even then to determine how to break through the clutter. In our recent study we found clutter is at such a high level of noise it is increasingly difficult to break through. As marketers and agencies battle for attention, we are watching trends in creative approaches and ideas such as use of celebrities, humor, music, and emotion in ads and analyzing which are being effective and which are not." Early next year, PhaseOne plans to release a new study on the communications drivers that impact the performance of different communications methodologies and messaging techniques. Performance measures will be based on specific metrics being used by individual marketers.

This study of recall, persuasion and likeability will be compared to a benchmark study conducted by PhaseOne in the mid-1980s. "We don't measure," said Stelloh. "We figure out the elements of a communication that make it memorable or create an affinity between the message and consumers. Our business is to incorporate consumer learning into an analytic system, allowing us to forecast how consumers will respond. We can predict how different consumers will react to specific messages. We can identify elements that might inhibit response and what the opportunities are to strengthen communication. "

Stelloh, speaking as an expert, claims PhaseOne has more institutional learning in its system than exists in any other proprietary database, but suggests "the company has been one of the best kept secrets in business." PhaseOne plans to syndicate its corporate knowledge but until now has been working with selective clients only. Stelloh is actively speaking with movie studios about analyzing movie trailers and commercials. "We looked at a script for a movie in early production that the studio didn't know how to position or market," he reported. "We took the script, identified how to position the film and recommended the scenes that would best support the positioning." He would not name the film, which is set to be released in December, but hinted the male lead is playing a role out of his usual character and is not introduced until one-third into the movie. Both IAG and OTX actively market products in the film and television communities.

PhaseOne is also developing a new product for evaluating product design. "It's so hard to win in this marketplace," says Stelloh, "product design will be increasingly more important. Whoever is out there first with what consumers want will have a real market advantage."

For more information, contact Jody Moxham at or Ren Stelloh at


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