What’s the point of advertising?

  • To create awareness
    • Brand advertising – “above the line”
    • Measured by awareness surveys
    • Usually in short campaigns a few times a year
  • To generate response
    • Direct marketing – “above the line”
    • Measured by number of responses or sales.
    • Usually constant

Rule 1

  • All advertising MUST be measured.
  • We drop less effective adverts.
  • Do more of the things that work.
  • How do we measure?
Response measurement
  • Promotional codes
  • Unique phone numbers
  • Cookies
  • Econometrics
  • Regional uplift

Some of the metrics used for response measurements:

  • Cost per Response (CPR)
    • Media cost divided by responses.
  • Response rate
    • Responses divided by impressions as percent.
  • Conversion rate
    • New customers divided by impressions.
  • Customer Acquisition Cost (CAC)
    • Media cost divided by customers acquired.
    • Also known as Cost per Acquisition (CPA)
Awareness measurement
  • Unprompted awareness
    • What analytics companies have you heard of?
  • Prompted awareness
    • Have you heard of Machine Labs?

Traditional Marketing Media

  • Direct Mail
  • Door Drops
  • Inserts
  • Out of Home (OOH)
  • Off the Page (OTP)
  • TV
  • Radio
  • Reader Offers

Digital Marketing Media

  • Search PPC
  • Display Advertising
  • Email
  • Social
  • Daily Deals
  • Marketplaces

Three Dimensions of Advertising

  1. Price
  2. Targeting
  3. Trust of Media
1. Price
  • Price given in Cost Per Thousand
    • Called CPM for press magazines
    • Called CPT for everything else
  • Impression: a person seeing an advert once.
  • Readership v. Circulation
  • Net v. Gross
  • Always exclude VAT
2. Targeting
  • Regional: TV, Radio
  • Demographic: gender, age, interest.
  • Digital: just about everything!
3. Trust of media
  • Recommendation of friend is most powerful.
  • Spam is the least powerful.
  • TV is one of the most trusted.
  • Online advertising is generally less trusted.
  • Full page press is more trusted than small ads.

Distance from Purchase

  • Visit eBay or Amazon
  • Search on Google for a product
  • Watching QVC
  • Relaxing while watching TV
  • Reading front of a magazine
  • Reading supplier directory in a magazine

Media capacity

  • Efficient spend is not unlimited.
  • Some media have higher capacity than others.
  • Increasing spend tends to reduce effectiveness.
  • TV is a high capacity media.
  • Budgets tend to be a mix between
    • Low spend, high efficiency
    • Higher spend, slightly less effective media

Overview of Rules

1. All advertising must ALWAYS be measured.

2. Three dimensions of advertising

i. Price

ii. Targeting

iii. Trust of media

3. Choose media with closest distance to purchase.

4. Do not spend above media capacity.

Reading List

  • There is no reading list for this part of the training.