How Validated Reach & Frequency Metrics Can Drive Campaign ROI. comscore, Inc. Proprietary.

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1 How Validated Reach & Frequency Metrics Can Drive Campaign ROI comscore, Inc. Proprietary.

2 ABOUT Reach and frequency (R/F) have always been among the most fundamental metrics in planning and evaluating campaigns. Understanding how many people saw an ad and how many times they saw it is critical for advertisers seeking to influence consumers attitudes and behaviors. For years, digital advertisers have used gross measures of reach and frequency to evaluate campaigns. This was deemed adequate at the time, but today we can do better. Through improved measurement, we can now quantify reach and frequency in the context of impressions that actually had a chance to make an impact that is clean impressions that are viewable and free from fraud. Much of the recent industry discussion around viewability and fraud has shed a negative light on the ecosystem often exposing waste and causing many to question the value of digital advertising. But there is an untold story of upside when we consider the implications of better measurement. In this report, we illustrate how the fundamental principals of reach and frequency with an application of clean impressions provides a richer, more accurate view of advertising effectiveness and ROI. These insights aim to provide clarity in a sometimes messy ecosystem so that advertisers can realize the true value of a digital ad. comscore, Inc. Proprietary.

3 CONTENTS OVERVIEW Reach, Frequency & Validation PAGE 5 THE VALUE OF VALIDATED REACH Digital as a Reach Medium PAGE 9 Real Reach, Real Opportunity PAGE 11 THE VALUE OF VALIDATED FREQUENCY The Frequency Opportunity PAGE 15 Viewability Multiplies Value PAGE 16 Too Much of a Good Thing? PAGE 19 The Frequency Balancing Act PAGE 20 CONCLUSION Key Takeaways PAGE 23 comscore, Inc. Proprietary. 3

4 OVERVIEW Campaign reach and frequency are essential parts of digital campaigns, but validation is needed too. comscore, Inc. Proprietary. 4

5 REACH (UNIQUE PEOPLE) OVERVIEW REACH, FREQUENCY & VALIDATION Reach and frequency are advertising fundamentals For marketers, R/F metrics answer two critical questions about campaign delivery: ILLUSTRATIVE EXAMPLE OF CAMPAIGN REACH CURVES ACROSS PLATFORMS How many people saw my ad? How many times? Together, these metrics help media buyers evaluate the impact of their advertising investments and compare relative effectiveness across channels, such as TV, desktop and mobile. IMPRESSIONS comscore, Inc. Proprietary. 5

6 OVERVIEW REACH, FREQUENCY & VALIDATION In digital, gross R/F ignores the reality of non-viewable and fraudulent impressions PERCENTAGE OF IMPRESSIONS BY VIEWABILITY / NON-VIEWABILITY Non-Viewable/ Invalid Traffic 7% Unlike in other channels, digital campaigns are subject to non-viewable and fraudulent delivery, making gross measures of R/F inadequate, and often misleading. Advertisers need to ensure their effectiveness measurement uses validated, not gross, impressions. Failure to do so leads to erroneous conclusions that understate the impact of digital advertising. Non-Viewable Human 45% 48% Viewable Source: comscore vce Insights, Desktop Display and Video Campaigns, U.S., Q comscore, Inc. Proprietary. 6

7 REACH (UNIQUE PEOPLE) OVERVIEW REACH, FREQUENCY & VALIDATION Validated R/F means lower numbers but more accurate insights and less waste By definition, the use of clean, validated measurement results in lower reported reach and frequency. While this can cause concern for some, the reality is there are several benefits of capturing clean impressions: Ability to identify sources of wasted ad spend and to optimize accordingly More accurate inputs into market mix models for cross-media comparisons Truer evaluation of campaign effectiveness and ROI ILLUSTRATIVE EXAMPLE OF IMPACT OF VALIDATION ON GROSS IMPRESSIONS WASTED IMPRESSIONS GROSS VALIDATED Identical point lift / Fewer impressions = More valuable impressions IMPRESSIONS comscore, Inc. Proprietary. 7

8 THE VALUE OF VALIDATED REACH Applying validation to reach metrics highlights untapped opportunity to reach new audiences. comscore, Inc. Proprietary. 8

9 VALIDATED REACH DIGITAL AS A REACH MEDIUM Digital is no longer simply a reach extension medium for advertising Digital has historically been seen as strictly a reach extension medium. Thanks to mobile s rapid growth, that s no longer the case. Today, many marketers have adopted a desktop + mobile strategy and the possibility exists to get the same reach levels they re used to in TV. In the past year alone, many digital properties crossed critical scale thresholds for monthly unique users, with 64 properties now boasting an audience of at least 50 million, and more than 200 with audiences of at least 20 million. REACH 100+ MM MM MM NO. OF PROPERTIES BY MONTHLY REACH DEC DEC GROWTH +50% y/y +10% y/y +19% y/y Source: comscore Media Metrix Multi-Platform, US, December 2015 comscore, Inc. Proprietary. 9

10 REACH (UNIQUE PEOPLE) VALIDATED REACH DIGITAL AS A REACH MEDIUM Digital can deliver TV-like audiences MONTHLY REACH (000 PEOPLE) OF MAJOR TV AND DIGITAL PROPERTIES TV MONTHLY (000) PEOPLE DIGITAL MONTHLY TV s status as the king of reach is well established, but increasingly digital media are delivering TV-like audiences. 300, ,000 Mobile Only Desktop Several of the largest digital platforms now reach monthly audiences on par with broadcast networks at primetime. TV still tends to build reach more quickly especially at the individual show or network level as compared to digital properties. But mobile has helped digital achieve scale, firmly establishing it alongside TV as a way to garner reach. 200, , ,000 50,000 0 Source: comscore Xmedia, US, November 2015 comscore, Inc. Proprietary. 10

11 REACH (UNIQUE PEOPLE) VALIDATED REACH REAL REACH = REAL OPPORTUNITY Validated reach can cut gross reach by a third AVERAGE GROSS VS. VALIDATED REACH GROSS REACH GROSS REACH While digital has the ability to drive higher potential reach, we must consider those numbers in terms of actual validated reach which can be much lower. A comscore custom analysis of 109 large branding campaigns revealed that the application of validation resulted in a 35% lower reach for the population overall and a 23% lower reach for the primary target audience. -35% VALIDATED REACH -23% VALIDATED REACH POPULATION REACH PRIMARY TARGET REACH Source: comscore custom analysis of 109 campaigns, 2015 comscore, Inc. Proprietary. 11

12 REACH REACH VALIDATED REACH REAL REACH = REAL OPPORTUNITY Validated reach curves don t flatten out, proving untapped potential 100 GROSS VS. VALIDATED REACH AGAINST PRIMARY TARGET GROSS IMPRESSIONS PRIMARY TARGET REACH 100 VALIDATED IMPRESSIONS PRIMARY TARGET REACH The comscore custom analysis referenced previously also revealed an apparently linear relationship between impressions and reach for the validated set OPPORTUNITY Even for the biggest campaigns we ve measured, marketers are still not weighting digital campaigns to the point where reach flattens out. That means there s still ample runway for big brands to increase reach on digital. The message to marketers is clear: adding weight to digital campaigns can build reach efficiently and validated metrics must be at the forefront of this analysis ,000,000 1,000,000,000 IMPRESSIONS ,000,000 1,000,000,000 IMPRESSIONS Source: comscore custom analysis of 109 campaigns, 2015 comscore, Inc. Proprietary. 12

13 The evidence shows pretty clearly that advertisers are probably underinvesting in digital if their goal is to maximize target reach while minimizing wasted spend. There s room to push those reach curves even higher in digital. GIAN FULGONI CO-FOUNDER AND CHAIRMAN EMERITUS COMSCORE comscore, Inc. Proprietary. 13

14 THE VALUE OF VALIDATED FREQUENCY Digital delivers impact even at traditionally high frequency levels, but excessive frequency can still be a problem. comscore, Inc. Proprietary. 14

15 VALIDATED FREQUENCY THE FREQUENCY OPPORTUNITY Contrary to TV, digital continues to drive brand lifts at high frequencies GROSS ATTITUDINAL BRAND LIFT AT VARYING IMPRESSIONS PER PERSON 5 EXPOSURES 10 EXPOSURES 15 EXPOSURES A common question among marketers is, What is the optimal frequency of my campaign? Frequency delivery is often a delicate balancing act between too little and too much and the answer differs by medium. 3.0 POINT LIFT 5.7 POINT LIFT 7.5 POINT LIFT In fact, comscore research shows digital campaigns have a much higher threshold for repeat exposures than traditional media. TV: Brand impacts thought to max out at around 3-5 exposures Digital: Brand impacts max out around exposures IMPRESSIONS PER PERSON Source: What is the Cost of an Unseen Ad?, Steven Millman, Vice President of Research, comscore, 2015 comscore, Inc. Proprietary. 15

16 VALIDATED FREQUENCY VIEWABILITY MULTIPLIES VALUE Branding outcomes improve linearly as viewability rates climb Not surprisingly, the more impressions that are viewable, the more impactful the campaign. After observing some data suggesting that viewability might have a nonlinear relationship with effectiveness, we tested the hypothesis holding frequency constant. SLIDING SCALE OF ATTITUDINAL BRAND LIFT VS. % VIEWABLE IMPRESSIONS 5 EXPOSURES 6.0 POINT LIFT BRAND LIFT BY % VIEWABLE IMPRESSIONS % 40% 60% 80% 100% By varying the viewability levels, comscore research showed that effectiveness had a linear relationship with viewability. For a marketer, this means controlling for campaign viewability can be expected to produce a corresponding increase in effectiveness. AT AVG 46% VIEWABILITY IMPRESSIONS PER PERSON Source: What is the Cost of an Unseen Ad?, Steven Millman, Vice President of Research, comscore, 2015 Data based on aggregate findings of five campaigns across 11 brand lift variables comscore, Inc. Proprietary. 16

17 POINT LIFT (BRAND) VALIDATED FREQUENCY CONSIDERING MARGINAL LIFT Certain campaigns see effectiveness diminish around 10 exposures ATTITUDINAL BRAND LIFT VARIANCE BY FREQUENCY OF VIEWABLE IMPRESSIONS Effectiveness curves may vary from campaign to campaign but generally continue to see meaningful incremental effectiveness for display campaigns through at least 10 viewable exposures. (Importantly, this might translate to something closer to 20 impressions if evaluating gross frequency rather than validated.) In the campaign to the right, marginal effectiveness from exposure was positive, albeit small in magnitude. In such cases, while impressions aren t necessarily wasted they are better allocated against users on the low end of the frequency distribution VIEWABLE IMPRESSIONS PER PERSON Source: Too Many Ads? How Ad Effectiveness Varies with the Level of Ad Exposure and what to do about it? Magid Abraham, 2016 comscore, Inc. Proprietary. 17

18 Digital display campaigns often continue to meaningfully increase their effectiveness through at least 10 exposures well beyond the rule of thumb for TV campaigns. STEVEN MILLMAN VICE PRESIDENT OF RESEARCH COMSCORE comscore, Inc. Proprietary. 18

19 POINT LIFT (BRAND) VALIDATED FREQUENCY TOO MUCH OF A GOOD THING? Digital allows for high frequency, but wear-out can still occur BRAND LIFT EFFECTIVENESS AT POTENTIALLY EXCESSIVE FREQUENCIES EXPOSURES 50 EXPOSURES In digital, as in TV, advertising wear-out can happen at excessive frequency levels. Fortunately for digital, declining effectiveness of campaigns happens around 50 validated exposures a much higher ad tolerance than we see in TV. Marketers can have the ability to prevent wear-out; first by using validated impressions to get a true count of frequency, and secondly by implementing frequency caps at 50 (or fewer) exposures to protect against wasted impressions. INCREASING EFFECTIVENESS MINIMAL EFFECTIVENESS DECLINING EFFECTIVENESS IMPRESSIONS PER PERSON Source: Too Many Ads? How Ad Effectiveness Varies with the Level of Ad Exposure and what to do about it? Magid Abraham, 2016 comscore, Inc. Proprietary. 19

20 VALIDATED FREQUENCY THE FREQUENCY BALANCING ACT Absent frequency controls, 1/3 of impressions could be wasted due to wear-out The distribution of frequency in digital campaigns highlights the wear-out problem, in that a full 1/3 of impressions are being delivered at a frequency greater than 50. These impressions are essentially wasted. Advertisers should aim to find the balance between reach and acceptable, more moderate levels of frequency. Absent controls, a tiny minority of users could end up receiving a disproportionately high percentage of all impressions. % USERS % IMPRESSIONS BRAND LIFT EFFECTIVENESS AT POTENTIALLY EXCESSIVE FREQUENCIES 75.4% 23.7% MANY PEOPLE RECEIVE TOO FEW IMPRESSIONS 2.8% 9.6% 22.4% 19.6% TOO MANY IMPRESSIONS WASTED ON SMALL NUMBER OF PEOPLE 1.4% 11.0% 0.8% % IMPRESSIONS PER PERSON Source: Too Many Ads? How Ad Effectiveness Varies with the Level of Ad Exposure and what to do about it? Magid Abraham, 2016 comscore, Inc. Proprietary. 20

21 Frequency caps from 20 to 50 are appropriate for most brands. Exposures above those thresholds are, at best, wasted. MAGID ABRAHAM EXECUTIVE CHAIRMAN COMSCORE comscore, Inc. Proprietary. 21

22 CONCLUSION comscore, Inc. Proprietary. 22

23 How Validated R&F Metrics Can Drive Campaign ROI Applying validation to impressions cleans input into other reporting metrics. By taking into consideration only impressions which reach real people and have the chance to influence them, average performance per impression is increased (on reach, frequency and impact measures). By paying only for these more valuable impressions, advertisers ROI is increased and budget can be further invested based on the true value of a digital ad. TOTAL POINT LIFT REPORTED IMPRESSIONS LIFT PER IMPRESSION REPORTING GROSS IMPRESSIONS 3.1 / = REPORTING VALIDATED IMPRESSIONS 3.1 / = comscore, Inc. Proprietary.

24 Key Takeaways VALIDATION Advertisers must validate impressions for a truer picture of reach & frequency REACH Digital is now a reach medium but advertisers must increase investment to take advantage FREQUENCY Digital allows for much more frequency than TV, but still requires capping to stop waste Validating ad impressions, by removing non-viewable and invalid (IVT) impressions, is the first step to getting a handle on delivery metrics like reach and frequency. Applying this important filter is within the control of advertisers and their agencies, and produces a truer picture of delivery against campaign objectives which is essential for cross-media comparability with TV. With the impact of mobile, digital has become a reach medium capable of delivering audiences on par with TV. Applying validation to impressions, reveals the reality that large brand advertisers often deliver less reach than unvalidated metrics suggest. A truer picture of reach suggests significant room to up investment and push reach curves higher without meaningfully increasing waste. Research suggests that digital ad campaigns often increase impact until a frequency of ~20 is reached, and campaigns can improve performance well beyond that frequency. Somewhere along the frequency distribution, exposures can become excessive so it is imperative to have firm campaign controls and frequency caps in place to minimize the risk of waste. comscore, Inc. Proprietary. 24

25 QUESTIONS? If you have questions about this report, or would like to learn more, please contact comscore, Inc. Proprietary. 25