Advertising Strategy and Analysis€¦ · Advertising Analysis and Strategy 2 Exhibit 1. Advertising Objectives Using the Hierarchy of Effects product quality, even the weather all

Advertising Strategy and Analysis

WHAT HAPPENED TO PROMOTION?

When you learned about the marketing mix, you probably learned that promotion covers a broad range

of activities that encompass sales promotion, professional selling, public relations and advertising.

These notes will focus primarily on advertising. There are two main reasons for this narrower focus.

First, while sales promotions take virtually any form, they very frequently involve some sort of price cut,

either directly by way of a temporary price reduction, or indirectly through means such as rebates and

coupons. The effects and the success of these sorts of price promotions were covered in earlier notes.

Second, although professional selling is academically part of the promotion mix, in practice it is generally

organizationally separate from other promotion activities. Indeed, many organizations consider selling

so important that national sales managers are given senior vice president status and report directly to

the company president or CEO rather than a marketing vice president. As such, analysis of selling efforts

and sales management strategy issues are best left to separate classes.

For our purposes, that leaves advertising, which is a very large field in and of itself. In these notes we

will examine advertising strategy from two perspectives: advertising creative and advertising media.

However, before strategies for either creative or media can be devised, objectives must be set for the

advertising effort.

ADVERTISNG OBJECTIVES

The success of advertising creative must be evaluated against the goals that were set for the effort. Of

course, this presumes that objectives were set for the advertising in the first place, which raises an

important point. Advertising can be expensive and resources should never be spent on such an

important activity without carefully considering what the investment of resources should yield. Of

course, setting advertising objectives can actually be complicated because what a company gets from

advertising is not always clear.

One thing a company expects to get from advertising is increased sales. However, the relationship

between advertising and sales is not clearly understood. Clearly, businesses believe advertising works to

generate sales; if not, businesses would not spend the tens of billions of dollars they do every year to

advertise. But the precise nature of the advertising-sales relationship is not known. There are two main

reasons why. First, many factors affect sales apart from advertising. So many factors affect sales that

isolating the effects of advertising is next to impossible. Competitor actions, the state of the economy,

Advertising Analysis and Strategy 2

Exhibit 1. Advertising Objectives Using the Hierarchy of Effects

product quality, even the weather all affect sales. How much sales advertising creates is very hard to

say. Second, advertising has a lagged effect on sales. That is, previous period advertising affects current

period sales. So it’s not just advertising today that can influence sales. Advertising yesterday, last week,

and last month may affect sales.

This is not to say that marketing managers should not set sales goals for their advertising. Of course

they should. However, managers should be aware that their sales targets may be subject to many other

influences, so flexibility and a willingness to adapt the objectives to circumstances over the course of the

campaign is important. We will discuss other aspects of the advertising-sales relationships later when

we look at advertising media strategy.

Given the difficulties precisely relating sales to advertising, marketing managers do have other

performance variables at their disposal to measure the effectiveness of their advertising efforts. These

performance variables have well-established relationships to advertising and so are often used to

evaluate the success of advertising campaigns. One well-known setoff performance variables comes

from a communications model called the Hierarchy of Effects Model developed by Ray (1973). The

model is shown in Exhibit 1, and is based on some very simple and intuitive ideas.

The hierarchy of effects states that to make rational choices between objects in our environment,

people must go through a logical sequence of states of mind to reach that choice. The boxes and arrows

in Exhibit 1 frame that choice in the context of a purchase. Starting at the bottom box, the hierarchy of

Knowledge

Awareness

Liking

Preference

Purchase

Affective

Cognitive

Behavioral

One year after the start of the advertising campaign, 50% of the target audience will know the following facts about our brand.

One year after the start of the advertising campaign, 90% of the target audience will indicate that they have heard of our brand.

One year after the start of the advertising campaign, 25% of the target audience will express a positive attitude about our brand.

One year after the start of the advertising campaign, 10% of the target audience will express a preference of our brand over Brand X.

One year after the start of the advertising campaign, sales of our brand will increase by ten percent over the previous year.


effects states that before we can make a choice between brands, we must be aware of the brands.

Then, to make a rational choice, we next should have some knowledge about the brands in so there is a

basis for making the selection. Comparison of the facts known about the brands will produce an

affective (i.e., emotional) response about each brand, which the model refers to as “liking.” Then, in

order to choose, we must mentally state at a preference for the selected brand. Then, we act through

purchase.

The right hand side of the exhibit shows how advertising objectives can be developed around each of

the variables in the hierarchy of effects. At the end of the campaign, some percentage of the audience,

presumably almost all of them, should have heard of the brand. Then they should know certain facts

about the brand, for example, the brand’s slogan, its exceptional warranty, etc. After the campaign, a

certain percent should be positively disposed toward the brand, a certain percentage should feel more

positively than toward a rival brand, and this should ultimately result in some change to brand sales.

Importantly, goals for each of the variables can be set during the course of the campaign. If he

advertising campaign runs one year, monthly or quarterly goals can be set so that managers can

consider adjustments to the campaign during its run.

Using the Hierarchy of Effects Model to set objectives for advertising seems like a good and

straightforward idea. It has the advantage of setting goals for advertising that are based on sound and

well-established facts about how advertising works. The variables in the model can be influenced by

advertising. However, using the hierarchy of effects for setting advertising has two pretty large

disadvantages: time and money. With the exception of sales, using the hierarchy of effects variables for

advertising objectives requires research. At each stage of the process described by the model, the

target audience would need to be sampled, preferably randomly, and questioned about their

awareness, knowledge, liking and preference. Depending on the circumstance, this kind of research

could cost many thousands of dollars and could take weeks to complete, though advance preparation

could help reduce that time. Many businesses budget for that kind of analysis because they believe that

knowing how their advertising is working is worth the expense. Many other businesses prefer to skip the

required survey research and simply look at how sales respond to the advertising efforts.

ADVERTISNG CREATIVE

Advertising Creative Basics

The Meaning of “Good” Advertising Creative. Broadly speaking, advertising creative is simply the

creative content of advertising. The words, images, music, design, graphics, themes, motifs, etc. are all

collectively referred to as advertising creative. Whether the creative is good or effective is a separate

question. Of course, advertising creative can be loosely described as “good” when the creative meets

the objectives the firm set for it. However, that view is too informal for our purposes because it doesn’t

really infer any criteria for judging what good creative is and what’s not. Rossiter and Percy (1997) offer

an excellent more formal definition of good advertising creative. They say that good advertising creative

can be described as follows:


An attention getting and catalytically relevant representation of the brand position that is generated in a form detailed enough to be executed and tested, and amenable to multiple executions.

Rossiter and Percy’s definition contains several parts, each of which should be examined individually. The first part calls for good advertising creative to be attention getting. Clearly this is the “price of admission” for any good advertising creative. However, some ads get attention at the expense of the ad’s message. Most of us can remember many occasions in which we remembered ads’ attention getting devices, then could not remember the ads’ sponsors or what was being sold. We even mention the ads to friends, saying “I saw the funniest TV commercial. I can’t remember who it was for, but the ad showed. . .” If the sponsor or the offer can’t be recalled, then the ad’s attention getting power was a waste.

The second attribute of good advertising creative is to be catalytically relevant. In chemistry, a catalyst speeds up a chemical reaction. Good creative should have a similar effect; it should speed the understanding and acceptance of the brand message. However, just as catalysts in chemical reactions do not alter the contents of the chemicals being combined, catalytically relevant creative speeds understanding and acceptance without changing the brand’s positioning or the audience’s understanding of what’s being offered.

Third, when an advertising agency develops a creative idea, they should make certain to develop the idea until it is actionable. Creative brainstorming sessions often produce vague ideas that seem good at first glance, but tend to crumble when the difficult work of actually turning a piece of imagination into advertising material actually begins. Thus, good creative ideas must be sufficiently detailed to be executed – turned into actual advertising material. Additionally, by being executable, Rossiter and Percy note that the idea can also be tested. Often agencies conduct research to test creative ideas at several points during an ad’s development. This step provides critical information to help keep the creative team on track in the minds of target consumers.

Finally, the definition notes the importance of multiple executions of an idea. Most great ad campaigns feature several ads, each one providing a slightly different expression of the same brand position. Optimally, several ads in a campaign resemble each other sufficiently so that exposure to one ad reminds a target consumer of other ads in the campaign that he or she has seen. This helps increase the synergistic value of multiple advertisements in a campaign.

The Financial Value of Good Advertising Creative. The problem with spending a lot of money hiring great writers and artists to produce impactful advertising creative. The question is whether good creative is really worth the expense. In other words, for a given budget, would an advertiser be better off paying less and getting mediocre creative and having more to actually run the ad? Or is the opposite true? Automobile dealers usually fall squarely on the side of less for creative and more for media to run advertising. Local car dealer ads are notoriously cheaply made so that more budget remains to put the ads on TV or in the newspaper. At the other extreme, in 1983, Apple Corporation produced what’s been called the greatest television commercial of all time, it’s “1984 Ad.” It spent almost a million dollars producing the commercial, a huge sum at the time and the equivalent of almost two million dollars today, yet only aired the commercial once nationally, during the 1984 Super Bowl. For the money they


Exhibit 2. Creativity and Advertising Frequency (Adapted from Blair 2000)

spent, would Apple have been better off spending less creating the commercial and more airing it? Although the advertisement became legendary, the economic value of the ad’s creative content is unknown.

However, impactful creative content can accrue economic advantages because the creative impact may reduce the number of times an advertisement needs to air. Exhibit 2 above shows how this would work. The exhibit, adapted from work by Blair (2000) plots product trial for three hypothetical advertisements, one poorly regarded creatively, a second moderately regarded creatively, and a third well regarded creatively. Product trial is plotted against the media schedule intensity. As you may have already guessed, the media schedule intensity is simply how frequently and in how many media outlets the advertisement is run. Obviously, more intense media schedules cost more money, but the advertisement will be seen more often in more places than less intense schedules. The point to the exhibit, however, is that for a given level of schedule intensity, a more creatively impactful advertisement should reap more product trial. If the basic theory is true, then the relationship also ought to hold for other dependent variables such as awareness, attitude, and even overall sales (not just trial).

The financial benefits of this theory, if it is correct, can be multiplied by producing impactful creative that does not cost a great deal. The example of the Apple 1984 ad as an exemplary impactful commercial may have misled you into believing that impactful ads must necessarily be expensive to make. This does not have to be the case. Good writing makes advertising impactful, not necessarily big production budgets and special effects. The 1984 commercial had both good writing and big production. With good writing, ads of any budget can make audiences think. Just make sure what they think is consistent with what the advertiser wants them to be thinking. To get an idea of whether they are thinking about the brand as desired, advertising creative ideas may be tested before the money is spent to produce them.

Media Schedule Intensity

Low High

Low

High

Product Trial

Highly positive attitude score

Moderately positive attitude score

Weakly positive attitude score


Evaluating Advertising Creative

Evaluating the effectiveness of advertising creative requires that marketing managers try to compare

the creative content of an advertisement or advertising idea and compare it to some criteria for what

constitutes an effective advertisement. Rossiter and Percy’s definition of good creative is an excellent

place to start in general terms, but the various parts of that definition must be operationalized in the

context of whatever product is being advertised and the goals of the advertising. One important part of

the definition of good creative is that ideas should be testable. Here, we’ll look briefly at some very

common ways of testing advertising creative. You should have learned something about the details of

these techniques in your MKT 450 classes. The two basic techniques are called concept testing and copy

testing. While either can be used without the other, they are most effective when used together in

sequence, with concept tests being conducted first followed by copy testing.

Concept Testing . Advertising professionals often refer to the basic creative idea underlying an

advertising effort as its concept. For example, the concept behind the recent Geico Insurance

advertising campaign is the little gecko character. Concepts can be slogans, they can be characters, they

can be jingles or music, or they can be looks or motifs. Concepts can be very general or may apply more

directly to specific ideas. The term is very loosely used.

However a concept applies to a specific advertising effort, that concept can be tested. Generally

speaking, advertising concepts are tested using qualitative research techniques such as focus groups or

depth interviews. The goal of concept testing is not only to evaluate whatever concept or concepts are

being developed, but also to use the comments from the focus groups or depth interviews to modify

and improve the concepts. During testing, concepts are generally presented to respondents in very

undeveloped form. Ideas are given as simple written descriptions and perhaps a few sketches, but the

goal is to generate thoughts about the concept before much has been spent on its development. The

execution of the idea is not as important as the idea itself.

Copy Testing. Copy testing focuses on the execution of the ideas that concept testing supports. Almost

always, copy testing involves comparison of ideas. That is, several versions of a concept will be

developed and then compared with copy testing. If a broad concept such as using a gecko character to

sell insurance is well received in focus groups, for example, then several visual depictions of the

character may be developed, perhaps with different voices and personalities, and respondents asked to

make comparisons.

The actual method of comparison can range widely by preference and circumstance. For example,

researchers can make qualitative comparisons using techniques such as focus groups. These more

informal comparisons may also involve simply showing focus group participants scripts, drawings,

storyboards, or other inexpensive renderings of different commercials. Focus group participants then

comment about them. In other instances, commercials may be more developed, perhaps partially

produced, and then used as stimuli in an experiment to more formally compare versions quantitatively.

For example, suppose Geico wanted to compare two gecko characters to see which one target

audiences would like better. Detailed storyboards of a potential commercial could be created, identical

except for the Gecko characters being compared. Audio of the commercials using different character

voices may also be produced. The stimuli could be shown to experimental groups, who evaluate what

they see and hear on scale item questionnaires that can be analyzed statistically.


ADVERTISING MEDIA

Advertising Media Basics and the Advertising Media Problem

Advertising media refers to the communication channels that are used to convey the message to the

target audience. When I joined the UD faculty in 1995, the first course I taught was MKT 421, the

advertising course. At that time, the discussion of advertising media was pretty straightforward. There

were only a few types of advertising media: television, radio, newspapers, magazines, outdoor (i.e.,

billboards and transit), and direct mail. Moreover, audience measurement for these basic media choices

was pretty limited because research techniques were not as advanced as they are today. In the two

decades between then and now, the picture has changed completely. With the exception of outdoor

advertising, all other media are becoming digitized; they are merging into our computers, phones, and

tablets.

These huge shifts in the media landscape have produced similarly large changes in the evaluation of

advertising media. New metrics of media effectiveness are emerging, though many are still not well-

understood and new technologies for audience measurement are being developed as quickly as media

technology itself is changes. The point here is that, in another couple of decades, the world of media

you will operate in as marketers will be as different from the world now as today’s world is from the one

I taught when I started my career at UD.

With all this change, however, there are still some basics associated with media and media strategy that

have not changed, beginning with the basic media problem. The basic media problem facing advertisers

is sending the advertising message to the right people the right number of times while not sending the

advertising message to the wrong people. Let’s examine the basic media problem a little more closely.

First, the problem involves right and wrong people. That means that, just like the rest of marketing,

advertising media should select target audiences. The assumption is that whatever is being advertised is

better suited to some people than others and that the advertising creative is directed toward these

people and not others. A well planned and well executed media strategy will place the advertising

message in media that are frequented by people in the target audience, and optimally, not frequented

by people outside of the target audience. The strategy should also make sure that the audiences

frequenting those media are sufficiently large to be worth the money. If the audience includes large

numbers of people who are not in the target audience, the money spent exposing them to the message

was wasted.

Second, the problem also assumes that the message may need to reach people a certain number of

times to be effective. This means that audiences who are underexposed to the message do not receive

sufficient exposure for the message to work. If that’s the case, then the money that was spent exposing

the audience to the message was wasted. Additionally, if the audience sees the message more times

than is necessary for the message to work, then the extra exposure adds nothing to obtaining the

desired response. Therefore, any additional exposure beyond what is optimal is wasted money.

Note all of the points at which money can be wasted in media. The waste of money in media strategy is

referred to simply as waste coverage. The best media strategy can never eliminate waste coverage.

However, it can seek to minimize it. Waste coverage occurs when people outside a target audience are

exposed to an advertising message ad when people inside the target audience are either under exposed


Exhibit 3. The Relationship Between Reach and Frequency

or over exposed to the advertising message. And of course all of this minimization of waste coverage

must occur within the limits of an advertising media budget.

Exhibit 3 illustrates how limited budget affects the media problem. The exhibit also introduces two of

the most important terms in advertising media planning: reach and frequency. The two terms are very

descriptive of the concepts that define them. Reach is simply the number of people in the target

audience who are exposed to an advertising message at least once during a given period of time.

Frequency is simply the average number of times a target audience is exposed to an advertising message

during that period of time. Exhibit 3 shows the relationship between reach and frequency given a fixed

media budget. The negative relationship indicates the tradeoff that must be made. Generally speaking,

an advertiser can use its budget to obtain large audiences who see the message few times or small

audiences who see the message many times. The size of the effective range of exposure shown in

Exhibit 3 depends in part on the effectiveness of the creative material in the advertisement. Recall the

diagram in Exhibit 2 on page 5. Impactful creative reduces the number of required exposures to achieve

a given result. Thus, creative and media work together to achieve the desired audience response. Now

the discussion turns to measuring what those desired results are.

Measuring Media Effectiveness

Measures of Schedule Intensity. The concept of schedule intensity was introduced earlier in the

explanation of Exhibit 2. The term is fairly descriptive in that schedule intensity simply refers to how

many media outlets and how often an advertisement appears. It essentially captures the “weight” of a

media schedule. There are several ways that schedule weight can be measured, but they all relate to

reach and frequency, so we begin with discussion of these two metrics.

Reach

Frequency

underexposure

overexposure

effective

exposure media budget

line


Reach. As noted above, reach refers to the size of the audience. It measures the number of

unique individuals who are exposed to an advertising message during a given period of time.

Reach can be measured in terms of raw audience size or as a percentage. When expressed

simply as audience size, reach is calculated simply as the sum of the unique audience members

watching or exposed to the message on the various media on which the message appears. Of

course, there may be some overlap across media that is difficult to account for. Media planners

may have access or make estimates to consider this overlap, but these estimates are very

inexact. Reach can also be expressed as a percentage. To calculate reach this way, the total

number of unique individuals exposed is divided by the total population of individuals. Reach

figures are typically limited to specific demographic groups, depending on how the figures are

available.

Audience size estimates come from a variety of sources. In the case of television or radio,

audience size estimates come from independent research companies, primarily Nielsen.

Magazines and newspapers typically report their own circulation figures, however, these figures

are typically audited by independent sources such as the Audit Bureau of Circulation.

Importantly, print media circulation is typically not referred to as “reach,” even though it

captures the same idea. Circulation, however, typically underestimates true reach because

many newspapers and magazines may be read by numerous people. Think about the magazines

placed in doctors’ offices or morning newspapers put in restaurants serving breakfast, for

example. Digital media also does not call audience size reach. Here, audience size is referred to

as number of unique “page views.” Reach is a term usually reserved for electronic media. No

matter the terminology used, however, the idea is the same.

Frequency. As noted earlier, frequency refers to the average number of times an audience is

exposed to an advertising message during a given period of time. Therefore, the terms

frequency and average frequency are synonymous. Calculating frequency requires that you have

at least three pieces of information. First, you would need to know the number times the

commercial or commercials were run in the various outlets for which frequency is being

calculated. Of course, that piece of information should be readily available internally.

Second, you must know the total number of people in a given target audience. This figure must

apply to the geographic for which average frequency is being calculated. For example, if the

commercial is being aired nationally, then you would need to know the total number of people

in the country in the target audience. If the commercial is being aired in selected cities, then

you would need to know the total number of people in the target market who live in those

cities. In the case of television, for which reach is calculated most often, reach is often reported

in ratings as the share or percentage of the audience tuned to a particular program.

Third, you would need to know the number of gross impressions for the commercial or

commercials being evaluated. An impression is simply one advertisement being seen one time

by one person during a given period of time. So if you see a Geico commercial two times during

a particular period of time then the number of impressions is two. If three friends see the Geico

commercial one time each, the number of impressions would be three. The number of gross

impressions for you and your friends is five. Exhibit 4 on the next page shows the basic

calculations for a simple frequency example.


Exhibit 4. Sample Frequency Calculations

Suppose an advertiser purchases advertising during three different television programs. For

each program, the station or network will receive a rating, which is the estimate of the share of

the audience watching on the particular days in question. These ratings, which are percentages,

must be converted into actual audience size estimates expressed as number of people and then

multiplied by the number of times the advertisement ran during that program to yield the

number of impressions for each program. These are then summed for the total number of gross

impressions. In the exhibit, Program A receives a Nielsen rating of .30 among the target

audience, meaning that thirty percent of one million people saw the advertisement. Since the

advertisement ran twice, the number of impressions for Program A is 1,000,000 × .30 × 2 =

600,000. This calculation is repeated for the three programs in the example and then these

three figures are summed to give the total gross impressions, which are then divided by the

total size of the target audience to yield an average frequency of 2.0.

Reach, frequency, and gross impressions may all be used in various combinations to calculate what

media planners regard as the most important and commonly used measure of schedule intensity, which

are gross rating points or GRPs. These give a summary measure or weight to the media schedule that

incorporates both reach and frequency. GRPs are very often used to set media objectives for

advertising. Media planners will prepare media schedules that are intended to achieve desired levels of

schedule intensity as measured by GRPs.

Although gross impressions are also sometimes also used as a summary measure of schedule weight,

media planners tend to favor GRPs because the numbers are far less cumbersome. First, when target

audiences number in the tens of millions of people and frequencies across a complex schedule number

in the dozens every week, stating media objectives in total gross impressions simply becomes awkward.

Second, media schedules targeted at different audiences can be compared more easily when the

objectives are measured with GRPs. The number of total gross impressions produced by a media

Total target audience: 1,000,000

Program A

Rating

Number of

Ads Run Impressions

Program B

Program C

.30

.20

.10

2

2

10

600,000

400,000

1,000,000

Total Gross Impressions 2,000,000

Divided by Target Audience ÷ 1,000,000

Average Frequency for Media Schedule 2.0


Exhibit 5. Gross Ratings Point Calculations

schedule varies widely depending on the size of the target audience. However, such is not the case with

GRPs, as illustrated in Exhibit 5.

Note two things about how GRPs are calculated as shown in the exhibit. One is that reach is the sum of

the ratings expressed as percentages in the calculations. Simply move the decimal points on the ratings

to the right such that .30 becomes 30 and so forth. Two is that GRPs are calculated as the product of

reach and frequency. In the exhibit, while the gross impressions are very different, the GRPs are

identical. GRPs do not depend on the size of the target market. This makes schedule intensity easier to

compare when the audiences being compared differ greatly in size.

Measures of Schedule Cost. Measures of schedule intensity can be used to compare the unit costs of

various advertising schedules. These two measures simply divide the total cost of the advertising

schedules by either the gross impressions or the GRPs the schedules generate. The more common of

these two cost measures is called cost per thousand impressions, or CPM. CPM simply measures the

cost of each one thousand impressions.

𝐶𝑜𝑠𝑡 𝑝𝑒𝑟 𝑇ℎ𝑜𝑢𝑠𝑎𝑛𝑑 𝐼𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠 (𝐶𝑃𝑀) = 𝑇𝑜𝑡𝑎𝑙 𝐶𝑜𝑠𝑡 𝑜𝑓 𝑀𝑒𝑑𝑖𝑎 𝑆𝑐ℎ𝑒𝑑𝑢𝑙𝑒

𝑇𝑜𝑡𝑎𝑙 𝐺𝑟𝑜𝑠𝑠 𝐼𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠 × 1,000

The second of the two cost measures simply divides total cost of the media schedules by the number of

GRPs the schedules generate. This measure is called cost per rating point, or CRP.


Program A

Rating Spots Run Impressions

Program B

Program C

.30

.20

.10

2

4

6

600,000

800,000

600,000


Reach =


Average Frequency =

2,000,000 ÷ 1,000,000 = 2.0

30 + 20 + 10 = 60

GRPs = 60 × 2.0 = 120

Program A

Rating Spots Run Impressions

Program B

Program C

.30

.20

.10

2

4

6

6,000,000

8,000,000

6,000,000


Reach =

Average Frequency =

20,000,000 ÷ 10,000,000 = 2.0

30 + 20 + 10 = 60

GRPs = 60 × 2.0 = 120


𝐶𝑜𝑠𝑡 𝑃𝑒𝑟 𝑅𝑎𝑡𝑖𝑛𝑔 𝑃𝑜𝑖𝑛𝑡 = 𝑇𝑜𝑡𝑎𝑙 𝐶𝑜𝑠𝑡 𝑜𝑓 𝑀𝑒𝑑𝑖𝑎 𝑆𝑐ℎ𝑒𝑑𝑢𝑙𝑒

𝐺𝑟𝑜𝑠𝑠 𝑅𝑎𝑡𝑖𝑛𝑔 𝑃𝑜𝑖𝑛𝑡𝑠

The preceding discussion of measures of schedule weight and costs applies most commonly to

evaluating media effectiveness in television and to a lesser extent in radio, these basic calculations can

also be applied to print media with one main and important caveat. The main caveat applied to this use

of metrics to print media is the problem of average frequency. During their lives, magazines and to a

lesser degree, newspapers, may be picked up and read many times. There is no good way of estimating

frequency. While estimates of frequency in television and radio may not account for quality of exposure

(people may leave the room or channel surf during commercial breaks, for example), at least television

and radio can base their frequency on some accurate empirical reality. This is not true of magazine or

newspaper advertising. With magazines especially, copies may be picked up and read dozens of times

while the issue is current, and possibly many times even when the issue is no longer current. Beyond

simply asking people to generalize about their magazine reading habits, estimating frequency for print

media is exceptionally difficult.

Digital Media Metrics. Despite the fact that the internet is not exactly new, the ways in which the

internet is used to view content is changing rapidly, especially as technology makes data transmission

faster and more efficient, as technology changes the devices we use to consume technology, and as the

platforms upon which internet content is delivered proliferate. The result is a poorly conceived and

relatively complicated set of metrics upon which to assess the effectiveness of digital media advertising.

Like other forms of advertising, the relationship between advertising and sales is difficult to quantify,

however, the prevailing opinion is that internet advertising can generate sales. Certainly, reams of

anecdotal evidence supports this assertion and companies like Google and Facebook have turned into

commercial giants based on this view. However, even seemingly sophisticated tools such as Google

Analytics may assemble menus of impressive metrics for businesses to track the effectiveness of their

digital marketing efforts, they are all based on measures that should be viewed with some caution. This

section does not cover the breadth of metrics used for evaluating digital media effectiveness. Instead it

focuses on a few key metrics that are used in the calculations of many other metrics.

Web Hits. Hits is a measure of reach, but is based on the number of files downloaded onto a site

visitor’s computer. When a person visits a web site, the server typically downloads many files

onto a visitor’s computer. These files may include the site’s style sheets, images, and one or

more JavaScript files. The files downloaded may also include advertisements for other

companies with links to their websites. While are a common metric for website traffic, because

websites differ widely in the number of files they download to visitors’ computers, hits are not

always a reliable indicator. These days, hits are used more by a company’s technical staff to

examine the adequacy of bandwidth than by marketers to measure internet traffic. However,

the metric does occasionally come up in conversations about audience size.

Page Views. A better and more widely accepted metric for web traffic is page views, which is

the total number of times a web page is displayed to visitors. Even though a page may be

composed of many individual files, the visit is counted only once. Page views used to be

measured with a simple counter because identification of unique visitors was not possible at the


time. Today computers can be identified individually providing a reasonable estimate of the

number of unique people that visit a web site and the number of page views associated with

each person. This unique identification permits advertisers to target advertising materials

individually to the person. To draw an analogy with the terminology of traditional media

planning, a page view is equivalent to an impression.

Clickthrough Rate. Perhaps the most widely used measure of internet advertising effectiveness

is the clickthrough rate. A clickthrough occurs when an advertiser’s page is accessed through

another web page. For example, suppose you navigate to the ESPN website to check the scores

of your favorite sports teams. While on the ESPN website, you see a banner advertisement for a

cruise line advertising special rates for off-season cruises. You move your mouse over the

banner ad and click to go to the cruise line’s website. That counts as a clickthrough. The

clickthrough rate is the percentage of page views that result in a clickthrough to an advertiser’s

web site.

𝐶𝑙𝑖𝑐𝑘𝑡ℎ𝑟𝑜𝑢𝑔ℎ 𝑅𝑎𝑡𝑒 = 𝐶𝑙𝑖𝑐𝑘𝑡ℎ𝑟𝑜𝑢𝑔ℎ𝑠

𝑃𝑎𝑔𝑒 𝑉𝑖𝑒𝑤𝑠

Bear in mind that the clickthrough rate is just that: a rate. That means it cannot be interpreted

in the absence of the raw numbers. If only one person visits a web site and that one person

clicks through to an advertiser’s web page, the clickthrough rate will be 100%. You can see how

this could be misleading.

Abandonment Rate. Abandonment occurs when, for whatever reason, consumers begin some

interaction with a website and then before the interaction is complete, they abandon the

attempt. Think of the times you navigated to a particular web site, sought to interact with it in

some way, and then changed your mind and navigated away. This can occur for many reasons.

First, the reasons may be technical. The web page may load too slowly, simply stop loading

partway through the process or cause some error that interrupts the process. Second, the web

page may require information the visitor is unwilling to give. Suppose you went online for an

automobile insurance quote. Rather than give you the price, it wants your name and contact

information for a representative to call you later. Not wanting to deal with a salesperson, you

close the page. Third, the visitor change his or her mind. Sometimes you may start to complete

some required form to make a purchase or receive information and then partway through, you

simply decide against finishing what you started. Fourth, the interaction becomes too long or

complicated. Sometimes, interacting with a website requires too much effort, too many forms,

or asks for too much information. If this level of frustration sets in, the visitor will close the page

and abandon the interaction.

Depending on the reasons for abandonment, a company can learn a great deal about their web

site and how to improve it. For example, if a web site requests contact information for a price

quote or estimate, the web site can offer explanations or assurances that the information will

not lead to unwanted solicitations or that the quote can be given by email. Or it may be better

to try to set up the web site so that estimates can be given without requesting contact

information. If transactions or other interactions are abandoned midway through, it can

indicate whether the process of completing the transaction is cumbersome or difficult. The

point is that analyzing the degree of abandonment and the point in the interaction that the


abandonment typically occurs, marketers can work with technical and design staff to create a

web interaction that retains and cultivates customers or leads rather than requiring information

that the visitor is reluctant to give. In such instances, web sites rarely get a second chance to

win back the business or start to cultivate a transaction. More often than not, once the visitor

abandons, they do not return. Thus, the abandonment rate can be an important and important

metric to identify problems and improve the process.

𝐴𝑏𝑎𝑛𝑑𝑜𝑛𝑚𝑒𝑛𝑡 𝑅𝑎𝑡𝑒 = 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐴𝑏𝑎𝑛𝑑𝑜𝑛𝑒𝑑 𝑊𝑒𝑏 𝐼𝑛𝑡𝑒𝑟𝑎𝑐𝑡𝑖𝑜𝑛𝑠

𝑃𝑎𝑔𝑒 𝑉𝑖𝑒𝑤𝑠


REFERENCES

Rossiter, John R. and Larry Percy (1997), Advertising Communications and Promotion Management, New

York: McGraw-Hill.

Blair, Margret H. (2000), “An Emirical Investigation of Advertising Wearin and Wearout,” Journal of

Advertising Research, 40(6), 95-100.

Adapted from Ray, M.L. (1973), "Communication and the Hierarchy of Effects," in New Models for Mass

Communication Research, P. Clarke, ed. Beverly Hills: Sage.

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