Advertising is one of the most

Transcription

1 Measuring Impact

2 Advertising is one of the most important pillars of any successful business. No matter how hard you work or how good your product is, your business cannot be successful if no one knows or remembers your product exists. You also want them to perceive your product as something worth spending their money on. So, for every dollar we spend on advertising, we not only want to know our ad spending has influenced purchasing decisions but also the actual measure of its influence. Half of my advertising is wasted, I just don t know which half, said John Wanamaker. Advertising must make an impact, but how do we measure that impact? Firstly, let s look at how the way consumers have changed the way they process ad messaging over the years. Consumer Truth: How They Think and Feel Linear Method Attention Interest Desire 1898 AIDA Funne Method Attention Interest Desire Action 1925 Hierarchy of Effects Cognitive Awareness - Knowledge Affective Liking - Preference Conative Conviction - Purchase 1961 Stages Method Awareness Comprehension Conviction Action

3 How to Build an Actionable Plan At the start of any marketing campaign, the planners, along with the creatives, have to create a plan to make sure their campaign will be effective. Here are some tips to make sure your campaign drives sales and the ROAS (Return on Ad Spend) is cost effective. Do as much market research as possible. Do set clear communication objectives. Don t assume common media channels will work for every target. Do look for loopholes in the market to find a unique opportunity for the brand. Why does how effective it is matter so much? The simple answer is waste. No brand wants to spend millions of dollars in ad spend that does not make consumers aware of the product and persuade them to purchase. Do make sure the messaging is what the target wants to hear. Don t forget to define your KPIs (Key Performance Indicators) and measure your ad s success. 3

4 How to Measure Ad Impact Measuring campaign viewership is one of the most integral parts of advertising. In our digital age, measuring the impact of online ads on purchasing has never been easier. However, calculating the impact of an ad is still not an exact science. We can measure how many impressions an ad gained and how many impressions led to an actual purchase. Below are the best ways to measure ad effectiveness in each media channel. Media: Newspapers Metric(s): Circulation, Sales, CTR CTR = (Click/Impressions) X 100 Methodology: Sales Increments, Circulation, VTR & Conversation Rate In 1906, the first print ads were placed in six Midwestern newspapers by W.K. Kellogg for Corn Flakes. Since, the company was not doing any other form of marketing at the time, they could simply measure the impact by the circulation of newspapers and percentage of sales increment. Over the years, the use of print advertising has grown substantially. With the growth of technology, the internet has taken print ads into the digital age. However, today, measuring effectiveness in print ads is a little more complex. Click here to go to glossary Next: Billboards 4

5 Media: Billboards Metric(s): Traffic, AVOC AVOC = Impressions (%) Methodology: Sales Increments, Average Weekly Traffic In 1908, the introduction of the Ford Model T combined with the first standardized ad sizes coast-to-coast led to a significant investment in outdoor billboards. A lot of big brands like toothpastes, cereals and soaps began investing heavily in billboard ads. Since then, billboard ads have grown to include digital billboards, out-of-home and guerilla marketing. Today, billboard ads are one of the most common methods of advertising but still one of the most difficult to measure. Click here to go to glossary Next: Radio 5

6 Media: Radio Metric(s): AQH, Average Quarter Hour AQH Rating = Exposed (In-Tab)/ Total Population (In-Tab) X Rating (%) Methodology: Radio Rating, Sales & Awareness Increments In 190In 1922, New York radio station WEAF broadcast the first paid radio commercial for The Queensboro Corp, a Long Island real estate firm. The firm paid $50 for 15 spots. Following the ads, the firm s sales rose exponentially, making them thousands of dollars. Today, weekly radio time can cost hundreds to thousands of dollars. Thus, it is important to be able to measure if our ad spending is costeffective. Click here to go to glossary Next: TV 6

7 Media: Television Metric(s): TV Ratings Points, Time, Share, Demographics GRP/TRP: Reach (% Target) X Frequency X 100 = Rating (%) Methodology: Television Viewership, Sales Increments Almost 80 years ago, the first television ad was broadcast by Bulova, a watchmaker. The company paid $9 to place and ad on a New York station, WNBT, before a baseball game between the Brooklyn Dodgers and Philadelphia Phillies. Since then, television ads have become one of the most impactful forms of advertising, reaching millions of people and advertisers paying millions for just a few seconds of airtime during events like the Superbowl. Click here to go to glossary Next: Social Media 7

8 Media: Social Media Metric(s): Engagement, Cost Per Mille (CPM), Clicks, Click-Through-Rate (CTR) CTR = (Click/Impressions) X 100 Methodology: Hashtag Tracking, Natural Language Processing & Advanced Network Analysis The launch of Facebook and the explosion of social media led to a sea change in how advertising is distributed and measured. Social Media has become one of the biggest media channels available and also one of the easiest to measure. On a social-media platform, it is possible to follow a user s journey from seeing an ad to the actual purchase. So, you may know how many purchases were derived exclusively from the ad. Click here to go to glossary 8

9 How to Measure Sales There s a common challenge marketers face, and what we believe Convertor solves for: the inability to really understand what works for their business. Research has shown that no two brands, even those from the same industry, impact customers with the same mix of marketing channels and tactics. Industry benchmarks are inadequate and so are outdated attribution models. Brands have to make investments in the right algorithmic attribution analytics to learn what marketing strategies and investments really move the needle and grow ROI (Return on Investment). Analytics that measure channels in siloes, or use industry-level benchmarks are inadequate at solving for this need. We believe MTA (Multi-Touch Attribution) is the best solution to help brands understand and execute on their unique marketing mix. Return of Investment (ROI) The best ROI is achieved by optimizing marketing spending between offline & online channels in a marketing mix and optimizing marketing spending between userlevel channels at the creative level. Multi-Touch Attribution Multi-touch attribution is a method used to learn how much value each touch point of a campaign contributed to a conversion. Marketing Mix Modeling Marketing mix modeling statistically analyzes the marketing mix and shows the impact of the channels and marketing data series to estimate the influence on sales and to predict future tactics. Controlled Panel/Market Tests This is where tagged online-adexposure data is matched with an offline sales database. The similar exposed and unexposed households are then unidentified and purchase behavior is analyzed between test and control HH. 9

10 Where to Find Existing Data Open Sources These are sources that available to the general public for free. Here are some examples of open sources at your disposal. Single Sources These sources measure TV and other media/marketing exposure, and purchase behavior, over time for the same individual or household. 10

11 Glossary Audible, Visible on Completion (AVOC): A measurement of the percentage of impressions where the ad was visible and audible on completion and delivered to a human. AVOC = Impressions (%) Average Quarter Hour (AQH): The average of people tuning into a radio station within a 15-minute period. AQH Rating = Exposed (In-Tab)/ Total Population (In-Tab) X Rating (%) Click-Through Rate (CTR): The number of Clicks per impression of an ad. CTR = (Cick/Impressions) X 100 Conversion Rate: The percentage of visits that resulted in the desired conversion actions. Cost Per Click (CPC): CPC = Cost/Clicks Frequency: The limit on the number of times an ad is seen before it is considered wasted media. Gross Rating Point (GRP): Measures the size of a campaign by specific targets. GRP/TRP: Reach (% Target) X Frequency X 100 = Rating (%) Impressions: The number of times an ad is viewed on a medium. In-View: The number of paid views compared to the number of impressions. Reach: The number of unique impressions that the ad reached. View Through Rate (VTR): The number of post impressions from an online campaign that lead to some sort of action. VTR: Reach (% Target) X Frequency X 100 = Rating (%) Conversion Rate = Total Conversions/Visits*100. (Back to Newspapers) (Back to Billboards) (Back to Radio) (Back to TV) (Back to Social Media) Sources: AdAge.com, Practicalecommerce.com, billboardconnectionadvertising.com 11

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