Measuring Advertising Effectivenessby Mira Vlach on August 26, 2007:

Summary: Not caring about the effectiveness of your advertising usually means you are wasting money. The efficiency can be measured best on the internet, but offline advertisement can be also measured.

The aim of advertising is either increase in sales or building brand. In this article, I write mostly about tracking the impact on sales, as this is the aim of most small companies.

Why measure advertising effectiveness?

Measuring advertising effectiveness is not easy. Sometimes, the results of measuring are just better guesses. Still, it is much better this way than not to adress this problem at all. There are dramatic differences in the effectiveness of various forms of advertising. If you pay for advertising, then it is probably important for you see some results. But if you waste money on inefficient advertising, you are missing better opportunities and the results may not come at all.

The basics of measuring effectiveness

Our main objective in measuring advertising effectiveness is to determine the effect of each advertising campaign from the results of our measuring and compare it with its price. Then we can decide which campaigns bring the best value for the money spent.

It is also important to realise the various factors influencing advertising. The medium, ad copy (exact wording), the format, audience (is the ad well aimed to the people who use our products?) – all of this effects the final success of the campaign. Therefore, it is necessary to judge the effectiveness in context.

Before we start, we need to decide which criteria are we going to monitor. These will differ with respect to the medium used, our possibilities, the purpose of the ad etc.

Examples of possible criteria are:

customers tell how did they learn about us increase in sales of the promoted goods more calls to our toll-free line calls to a campaign-specific phone number specific codes applied by customers to receive offered discount (i.e. „Tube“) redeemed coupons or vouchers that were given out at a campaing increased visits on our website other metrics from our website statistics (i.e. orders amount) – see below

It is best to combine several criteria, because a customer can for example either contact you by calling your line or by sending you an email. Also, accept the fact, that we are not going to be able to measure everything. Especially if you run several campaigns in various media

simultaneously, it may be difficult to ascribe the measured effects to a specific campaign. This can be helped by careful choice of criteria or by running campains seperately (though it is not always desirable). Contrary to traditional media, online campaigns are usually very easily traceable and can be measured well.

Small companies will probably not use the methods of big corporations (ad recognition or recall) which are based on questioning samples of people once the campaign has ended. This would be too costly for small advertisers. Instead, you can simply judge the impact by how many people has the medium reached (viewers, readers, listeners) and comparing how much did it cost to reach thousand people (this is called CPM).

Measuring effectiveness on the Internet

Monitoring the effect of your internet advertising can be easy and cheap when you use quality tools. I have good experience with Google Analytics, which is a free website analysis tool. When you implement it in your website and set up your campaings properly, you'll have all the information you need to decide which advertisement you should drop and which brings you good return on your investments.

Besides basic functions like monitoring number of visits and pageviews, it offers you a variety of statistics regarding visitor segmentation, traffic sources etc. Google Analytics also allows to set up goals on your website and track conversions – goals accomplished by visitors.

Examples of conversions:

submitted contact forms completed transactions in your e-shop file downloads newsletter subscriptions clics on your email address

I would definitely recommend to set up the analytics for your website proffesionaly before it is launched, because it can provide so much valuable information for marketing purposes.

Then you can mine for data and see for example what is the average transaction value for visitors from London, how many page do they view per visit etc. If you set value for your goals, you can also see return on investments (ROI) for the money spent on advertising. This is possible because of tags, which are added to the links pointing to your website.

Another advantage of this tool is that it helps you to test the different versions of either website or ad copy. Thus, you can create much better landpage or more effective ad. This is called A/B testing.

Advertising Production Process

A commercial is a reflection of who you are and what your business stands for. It's a way for you to put your best foot forward and let the public know that you provide a valuable product or service. But in order to be effective, your commercials need to to have a well planned message, presented with high quality visuals and sound.

Because Q Station is a turn-key production facility that handles all aspects of the production process in house, you won't find another production company that can offer you the same quality at even twice the price.

One way that we are able to provide such a high quality product is through our simplified production process. This process allows us to create custom campaigns for each and every client at roughly the same cost as purchasing pre-made productions from a syndication agency.

Here's how we do it:

Market Research

The first and most important step is for us to learn everything we can about your business. What are your marketing goals? Who represents your customer base?

No one knows your business better than you. You know who your customers are and what they want. You know what they buy and why. That makes you our most valuable resource.

We'll meet with you to learn everything we can about your business and customers, and help you develop a game plan for your next advertising campaign.

Script Development

Taking what we've learned about your business, your customers, and your desired marketing message, our copy team will develop a campaign concept that will appeal to your customers and meet your marketing goals.

Once our team refines the concept into a workable script, we'll present it to you for your review. If you're happy with our concept, we'll move forward into production. If you're not happy, we'll start over and repeat the process until you have exactly what you want.

Guaranteed Price Quote

Once we have a final approved script, we'll recommend the most cost effective production package to meet your production needs. If your script will require any special considerations (animals, actors, special effects, etc.) we'll do the research and find the most cost effective way to accomplish the goal.

Then, we'll give you a guaranteed, all-inclusive quote listing the everything that will be provided during production. You'll know exactly what it will cost up front, and you won't pay a penny more.

Production of Your Commercial

Once you're ready to move forward with production, we will require a 20% depost to add your commercial to our production board. We'll then schedule your production at the first available slot based on talent and location availability (as needed).

In most cases, radio commercials can be ready for broadcast in just a few days, while television commercials traditionally take from one to three weeks (depending on the complexity of the production).

Once the commercial is produced, we'll send you a proof of your spot for your review and approval. If you would like to make any minor changes to the campaign (graphics, text font or color, music choice, etc.) simply let us know and we'll revised your spot and send you a new proof.

Delivery of Completed Commercial

Once your satisfied with your commercial, we'll provide you with a final broadcast master and invoice for the balance due on the production.

The Creative Brief

1. Any project begins with a blueprint. A builder needs a floor plan. A writer needs an outline. A creative director or ad agency needs a creative brief.

A creative brief is a document that answers specific questions about a project. What format will the ad take--print, radio, television, web? Who is the target audience? What publications or stations will show the ad? What takeaway message do you want the audience to hear? How much money do you want to spend designing and placing the ad? How much time will you dedicate to creating the ad? Do you have a deadline to meet? Who will produce the ad? Will you be designing the ad or will you hire an ad agency?

If you start without a thorough creative brief, you can waste time and money redesigning your ad to your exact specifications.

Proofs, Layouts & Storyboards

2. Each medium (TV, radio, newspaper, magazine, direct mail, outdoor advertising) will have its own specifications for ads. For example, if you decide to advertising using print outlets like magazines and newspapers, you will need to decide what publications you

would like your ad to run in and follow their specifications about such factors as size, colors, deadlines and cost. Select the art suitable for your ad and write copy to tell readers about your product or service. Keep this section concise and to the point. No one likes to read big blocks of copy. During this period, you may go through several proofs to finely tune your ad. If you are working with an agency, be certain to negotiate how many rounds of changes you will receive up front before the agency starts charging you for revisions. Review each proof carefully to confirm that your message is clear and contains the information you want to share with your customers. Do you have a website? Does the ad include your telephone number, address or any special offers? Finally, check for spelling.

For television ads, production can be a costly and time-consuming expense. You will need a script for at least 30 seconds and possibly 60. Many television stations have in-house production companies who can help produce a spot if you are purchasing advertising time on their station. Ask the production company to share storyboards (the script in picture form) so you can have a better idea of how your commercial will look before you begin filming. Once again, make sure your message is very clear and includes all the information you want to convey. This will help you avoid having to reshoot any scenes, which is expensive.

Completing Production

3. After designing and approving preliminary drafts of your ad, you're nearing the end. The final proof is your opportunity to take one last look at your efforts before moving on to final production. It may be helpful for you to bring in someone not involved in the project to give an opinion and check for any inaccuracies or confusing information. If you are working in print, this may be referred to as a low-resolution version. If you are working in film or video, this is often referred to as a rough draft or offline edit.

For many print projects, you can ask for a printer's proof. This is a copy of your ad taken from the printer's press. This will allow you to check for color correctness, sizing issues, photo cropping or anything else that might detract from your ad. Once you have approved the printer's proof, submit the ad to the publications and your project is complete.

For film or video projects, the offline or rough draft will allow you to listen and watch for any changes or corrections to be made before going into the final edit process. If the project is approved, an editor will make final revisions, including any graphics or titles, and will record and mix the voice talent and music bed to make sure the final product is broadcast ready.

Promotion: Integrated Marketing CommunicationIntegrated Marketing Communication (IMC) involves the idea that a firm’s promotional efforts should be coordinated to achieve the best combined effects of the firm’s efforts.  Resources are allocated to achieve those outcomes that the firm values the most.Promotion involves a number of tools we can use to increase demand for our  The most well known component of promotion is advertising, but we can also use tools such as the following:

Public relations (the firm’s staff provides information to the media in the hopes of getting coverage). This strategy has benefits (it is often less expensive and media coverage is usually more credible than advertising) but it also entails a risk in that we can’t control what the media will say.  Note that this is particularly a useful tool for small and growing businesses—especially those that make a product which is inherently interesting to the audience.

Trade promotion.  Here, the firm offers retailers and wholesalers temporary discounts, which may or may not be passed on to the consumer, to stimulate sales. 

Sales promotion.  Consumers are given either price discounts, coupons, or rebates. Personal selling.  Sales people either make “cold” calls on potential customers and/or

respond to inquiries. In-store displays.  Firms often pay a great deal of money to have their goods displayed

prominently in the store.  More desirable display spaces include:  end of an aisle, free-standing displays, and near the check-out counter.  Occasionally, a representative may display the product.

Samples Premiums

PROMOTIONAL OBJECTIVES AND EFFECTIVENESS

Generally, a sequence of events is needed before a consumer will buy a product.  This is known as a “hierarchy of effects.”  The consumer must first be aware that the product exists.  He or she must then be motivated to give some attention to the product and what it may provide.  In the next stage, the need is for the consumer to evaluate the merits of the product, hopefully giving the product a try.  A good experience may lead to continued use.  Note that the consumer must go through the earlier phases before the later ones can be accomplished.

Promotional objectives that are appropriate differ across the Product Life Cycle (PLC).  Early in the PLC—during the introduction stage—the most important objective is creating awareness among consumers.  For example, many consumers currently do not know the Garmin is making auto navigation devices based on the global position satellite (GPS) system and what this system can do for them.  A second step is to induce trial—to get consumers to buy the product for the first time.  During the growth stage, important needs are persuading the consumer to buy the

product and prefer the brand over competing ones.  Here, it is also important to persuade retailers to carry the brand, and thus, a large proportion of promotional resources may need to be devoted to retailer incentives.  During the maturity stage, the firm may need to focus on maintaining shelf space, distribution channels, and sales. 

Different promotional approaches will be appropriate depending on the stage of the consumer’s decision process that the marketer wishes to influence.  Prior to the purchase, the marketer will want to establish a decision to purchase the product and the specific brand.  Here, samples might be used to induce trial.  During the purchase stage, when the consumer is in the retail store, efforts may be made to ensure that the consumer will choose one’s specific brands.  Paying retailers for preferred shelf space as well as point of purchase (POP) displays and coupons may be appropriate.  After the purchase, an appropriate objective may be to induce a repurchase or to influence the consumer to choose the same brand again.  Thus, the package may contain a coupon for future purchase.

There are two main approaches to promoting products.  The “push” strategy is closely related to the “selling concept” and involves “hard” sell and aggressive price promotions to sell at this specific purchase occasion.  In contrast, the “pull” strategy emphasizes creating demand for the brand so that consumers will come to the store with the intention of buying the product.  Hallmark, for example, has invested a great deal in creating a preference for its greeting cards among consumers.

There are several types of advertising.  In terms of product advertising, the “pioneering” ad seeks to create awareness of a product and brand and to instill an appreciation among consumers for its possibilities.  The competitive or persuasive ad attempts to convince the consumer either of the performance of the product and/or how it is superior in some way to that of others.  Comparative advertisements are a prime example of this.  For instance, note the ads that show that some trash bags are more durable than others.  Reminder advertising seeks to keep the consumer believing what other ads have already established.  For example, Coca Cola ads tend not to provide new information but keep reinforcing what a great drink it is.

 

DEVELOPING AN ADVERTISING PROGRAM

Developing an advertising program entails several steps:

Identifying the target audience.  Market reports can be bought that investigate the media habits of consumers of different products and/or the segments that the firm has chosen to target.

Determining appropriate advertising objectives.  As discussed, these objectives might include awareness, trial, repurchase, inducing consumers to switch from another brand, or developing a preference for the brand.

Settling on an advertising budget.

Designing the advertisements.  Numerous media are available for the advertiser to choose from. A list of some of the more common ones may be found on PowerPoint slide #11.  Each medium tends to have advantages and disadvantages. 

It is essential to pretest advertisements to see how effective they actually are in influencing consumers.  An ad may have to be redesigned if it is found not be to be as effective as targeted.  Note that selecting advertisements is often a “numbers game” where a lot of advertisements are created and the ones that “test” best are selected.

ADVERTISING STRATEGIES

          Depending of the promotional objectives sought by a particular firm, different advertising strategies and approaches may be taken.  The following are some content strategies commonly used.

Information dissemination/persuasion.  Comparative ads attempt to get consumers to believe that the sponsoring product is better.  Although these are frequently disliked by Americans, they tend to be among the most effective ads in the U.S.  Comparative advertising is illegal in some countries and is considered very inappropriate culturally in some societies, especially in Asia.

Fear appeals try to motivate consumers by telling them the consequences of not using a product.  Mouthwash ads, for example, talk about the how gingivitis and tooth loss can result from poor oral hygiene.  It is important, however, that a specific way to avoid the feared stimulus be suggested directly in the ad.  Thus, simply by using the mouthwash advertised, these terrible things can be avoided. 

Attitude change through the addition of a belief.  This topic was covered under consumer behavior.  As a reminder, it is usually easier to get the consumer to accept a new belief which is not inconsistent with what he or she already believes than it is to change currently held beliefs.

Classical conditioning.  A more favorable brand image can often be created among the consumer when an association to a liked object or idea is created.  For example, an automobile can be paired with a beautiful woman or a product can be shown in a very upscale setting.

Humor appeal.  The use of humor in advertisements is quite common.  This method tends not to be particularly useful in persuading the consumer.  However, more and more advertisers find themselves using humor in order to compete for the consumer’s attention.  Often, the humor actually draws attention away from the product—people will remember what was funny in the ad but not the product that was advertised.  Thus, for ads to be effective, the product advertised should be an integral part of what is funny.

Repetition.  Whatever specific objective is sought, repetition is critical.  This is especially the case when the objective is to communicate specific information to the customer.  Advertising messages—even simple ones—are often understood by consumers who have little motive to give much attention to advertisements to which they are exposed.  Therefore, very little processing of messages is likely to be done at any one time of exposure.  Cumulatively, however, a greater effect may result.

Celebrity endorsements.  Celebrities are likely to increase the amount of attention given to an advertisement.  However, these celebrities may not be consistently persuasive.  The Elaboration Likelihood Model discussed below identifies conditions when celebrity endorsements are more likely to be effective.

 

ADVERTISING AND ATTITUDE CHANGE

A significant objective of advertising is attitude change.  A consumer’s attitude toward a product refers to his or her beliefs about, feeling toward, and purchase intentions for the product.  Beliefs can be both positive (e.g., for McDonald’s food:  tastes good, is convenient) and negative (is high in fat).  In general, it is usually very difficult to change deeply held beliefs. Thus, in most cases, the advertiser may better off trying to add a belief (e.g., beef is convenient) rather than trying to change one (beef is really not very fatty).Consumer receptivity to messages aimed at altering their beliefs will tend to vary a great deal depending on the nature of the product.  For unimportant products such as soft drinks, research suggests that consumers are often persuaded by having a large number of arguments with little merit presented (e.g., the soda comes in a neat bottle, the bottle contains five percent more soda than competing ones).  In contrast, for high involvement, more important products, consumers tend to scrutinize arguments more closely, and will tend to be persuaded more by high quality arguments.

Celebrity endorsements are believed to follow a similar pattern of effectiveness.  The Elaboration Likelihood Model (ELM) suggests that or trivial products, a popular endorser is likely to be at least somewhat effective regardless of his or her qualifications to endorse (e.g., Bill Cosby endorses Coca Cola and Jell-O without having particular credentials to do so).  On the other hand, for more important products, consumers will often scrutinize the endorser’s credentials. 

For example, a basket ball player may be perceived as knowledgeable about athletic shoes, but not particularly so about life insurance.  In practice, many celebrities do not appear to have a strong connection to the products they endorse.  Tiger Woods might be quite knowledgeable

about golf carts, it is not clear why he has any particular qualifications to endorse Cadillac automobiles.

 

ADVERTISING EFFECTIVENESS AND EVALUATION

The effectiveness of advertising is a highly controversial topic.  Research suggests that in many cases advertising leads to a relatively modest increase in sales.  One study suggests, for example, that when a firm increases its advertising spending by 1%, sales go up by 0.05%.   (The same research found that, in contrast, if prices are lowered by 1%, sales tend to increase by 2%).  In general, it appears that advertising is more effective in selling durable goods (e.g., stereo systems, cars, refrigerators, and furniture) than for non-durable goods (e.g., restaurant meals, candy bars, toilet paper, and bottled water).  Also, advertising appears to be more effective for new products.  This suggests that advertising is probably most effective for providing information (rather than persuading people).  Note that many advertising agencies make a large part of their money on commissions on advertising sold.  Thus, they have a vested interest in selling as much advertising as possible, and may strongly advise clients to spend excessive amounts on advertising.

Research suggests that advertising effectiveness follows a sort of “S-“ shaped curve:

Very small amounts of advertising are too small to truly register with consumers.  At the medium level, advertising may be effective.  However, above a certain level (labeled “saturation point” on the chart), additional adverting appears to have a limited effect.  (This is comparable to the notion of “diminishing returns to scale” encountered in economics).

There are several potential ways to measure advertising effectiveness.   Two main categories include:

“Field” based studies.  These studies look at what happens with real consumers in real life.  Thus, for example, we can examine what happens to sales of a company’s products when the firm increases advertising.  Unfortunately, this is often a misleading way to measure advertising impact because we live in a “messy” world where other factors

influence sales as well.  For example, a soft drink firm could conclude that there is very little correlation between advertising and sales because another, much more powerful factor is at work:  temperature.  That is, the firm may find that although a great deal of advertising is done in the winter, sales are greater in summer months because people drink more soft drinks in hot weather.  Note that the choice of brand of soft drink purchased in the summer may very well be influenced by advertising heard at other times.

Laboratory studies.  To get around the confounds imposed by nature, advertising researchers often use artificial situations to evaluate advertising.  This sacrifices the use of real consumers in real settings, but allows the marketer to control sources of influence.  An advertising firm may hire people to come in and participate in research.  The consumers may come in and be asked to view some television and respond to a questionnaire about the programming later.  Half of the subjects can then see a version which includes an ad to be tested (the other half is known as the “control” group, which will serve as a basis for comparison).   We can now compare the two groups on factors such as attitude toward the brand, purchase intention, and preference. 

 

PUBLIC RELATIONS

Consumers will often perceive what they perceive to be “independent” media news stories as more credible than paid advertising.  Therefore, getting favorable media coverage can be quite valuable.  One downside, of course, is that the marketer does not get to control what the media will say.  This type of coverage is not necessarily less expensive than traditional advertising, either, since a lot of labor is often needed to generate media interest.

News releases should generally be brief.  Ordinarily, these should not exceed two double spaced pages in length although additional information can be made available.  The media will generally react negatively to “advertising” or sensational language such as “revolutionary” or “breakthrough.”  There is generally a preference for precise, factual information although a human interest story may also be of interest.  It is important to quote actual people—whether customers, neutral experts, or employees of the firm.  This may mean “drafting” a quote and asking the appropriate person for permission to quote him or her saying this.

ntegrated Promotions Campaign

An Integrated Promotions Campaign is designed to support your institution’s overall marketing objectives. Services begin with content and design recommendations, adapting the message and image to the local student market, and end with campaign completion, analysis and follow-up.

Components are digital and traditional, online and offline, interactive and static. EduGlobal Media works to ensure that our online reach is the strongest in the industry, our offline

promotions are placed in the most essential locations, and that all media is engaging, exciting and effective.

Institutions receive a number of benefits through EduGlobal Media promotions:

Greater brand recognition, essential for success in China Increased traffic & enquiries through focused promotions Exclusive access to EduGlobal’s media partnerships Market Knowledge through data tracking & analysis of campaign activity