Apple's new ad a flop? Maybe, maybe not

Update

It’s a tantalizing tale: After seeing its sales growth slow, its profits fall and its stock price plummet, Apple is losing its marketing magic.

But there are reasons to doubt its truth.

On Thursday, Bloomberg reported that a new television ad campaign from the iPhone maker has been a dud with consumers. The campaign, which Apple unveiled at its developers conference earlier this month in San Francisco, picks up on the “Designed by Apple in California” line that’s stamped on the company’s products. In the first ad in the campaign, viewers see video of consumers enjoying Apple products while a narrator discusses philosophy behind the way the company approaches products and design.

That ad score received the lowest rating by among the 26 ads Apple has run in the last year, Bloomberg reported. The new commercial scored a 489 on a rating system designed by ad consulting company Ace Metrix, according to the wire service. By contrast, the industry average is a score of 542. Past Apple campaigns have achieved scores of more than 700, and a recent commercial by Samsung for its new Galaxy S 4 phone scored a 757 on Ace Metrix’s scale, according to the article.

Bloomberg noted that Apple’s scores have been slipping since earlier this year, when a pair of ads touting the new iPhone scored 560 and 537.

That’s all well and good and fits in with the narrative about Apple losing its touch. But Bloomberg declined to mention several pertinent details.

Ace’s scores are determined by surveys of at least 500 TV viewers, Bloomberg reports. But the wire service didn’t inform readers that Ace Metrix’s chief product is a subscription service that helps ad campaign managers increase their scores on Ace’s own ratings. Thanks to that arrangement, one might expect that the company’s own customers would score more favorable ratings than companies that aren’t customers.

Any guesses on which company mentioned above is was an Ace Metrix customer? If you guessed Samsung, you’re absolutely right. Unfortunately, that’s something else that Bloomberg declined to mention.

It’s not clear whether Apple is also a customer of Ace Metrix. Bloomberg doesn’t say and neither Apple nor Ace Metrix responded immediately to requests for comment.

It’s perfectly possible that everything’s ab0ve-board here. And I’m certainly not going to argue that the new “Designed By Apple” ads are the second coming of the company’s famous “1984” commercial or its “Here’s to the Crazy Ones” ad.

But there are other reasons to be skeptical about Ace Metrix’s assessment of the new campaign. For example, it’s unclear from Bloomberg’s report and Ace Metrix’s materials exactly what its ratings numbers represent or precisely how it derives them. Yes, the ratings are somehow derived from the company’s surveys, but such research is open to manipulation and can be notoriously unreliable. A small or unrepresentative pool of survey respondents or a poorly worded question can jeopardize their accuracy and usefulness.

Ace Metrix’s Methodology page does say that the company scores all ads “in the exact same way,” so that all of its scores can be directly compared with each other.

But beyond questions about its methodology, there’s the whole conflict of interest inherent in Ace Metrix’s business model. There are well-founded reasons to question the objectivity of a firm that sells — to the very same companies whose products it rates — a service to help them improve their ratings. One need to look no farther than financial ratings agencies including Standard & Poors who, during the housing boom, gave their AAA imprimatur on toxic mortgage loans that their banking customers were peddling to see the obvious problem with that kind of business model.

H/T Very Nice Web Site via Daring Fireball.

Update: I’ve updated the story to reflect a conversation I just had with Peter Daboll, Ace Metrix’s CEO. According to Daboll, Samsung was a customer of Ace Metrix last year, but isn’t a customer any longer. According to Daboll, Apple has never been an Ace Metrix customer.

In our conversation, Daboll gave a much fuller explanation of the company’s business model and methodology than is available on the company’s site. I’ll write more about that in a separate blog post.

But in short, Daboll says that it has a standardized survey and methodology for calculating its rating score. Clients can’t directly influence their scores, and the company doesn’t offer consulting services that would suggest how a particular ad would get a better score.

However, many of Ace Metrix’s clients do test out multiple ads with the company’s survey participants before those ads are aired, Daboll said. Companies can use the scores from those tests to modify their ads or to determine which one scores best (according to Ace Metrix’s model) with viewers.

Image courtesy of Apple.

Troy Wolverton Troy Wolverton (280 Posts)

Troy writes the Tech Files column as the Personal Technology Columnist at the San Jose Mercury News. He also covers the digital media, mobile and video game industries and writes occasionally about Apple, chips, social networking and other aspects of technology. Previously, Troy covered Apple and the consumer electronics industry. Prior to joining the Mercury News, Troy reported on technology, business and financial issues for TheStreet.com and CNET News.com.