Multichannel Marketing by Akin Arikan

Author:Akin Arikan
Language: eng
Format: epub
Publisher: Wiley
Published: 2010-04-20T04:00:00+00:00

If you remember, the data from controlled experimentation in this fashion can help isolate the impact of each channel and combinations thereof. If available, it will make the work of statisticians much easier for developing marketing mix models.

Success Metrics for Brand Advertising

Finally, now that we’ve reviewed typical methods of measuring the impact of brand advertising on sales and brand equity, let’s look at metrics that advertisers would want to calculate based on that data.

Operational Metrics

Although operational metrics such as reach and frequency are not success metrics, advertisers still depend on them to assess how far their advertising dollars are going. Various metrics are in use that you will encounter frequently in the brand advertising world.

Rating Points

Rating points are defined as the percentage of the potential, targeted audience that is reached by an advertisement. For example a household rating point of 10 would mean that 10 percent of all households in the population have been reached.

Gross Rating Points (GRP)

GRPs are a unique metric used for buying and selling brand advertising. They combine both reach and frequency-oriented aspects. Let’s assume that an audience of 10 rating points is exposed to an advertisement twice. The GRP is defined as the sum of rating points. In this case, GRP = 10 + 10 = 20. Of course, some households will have seen the ad both times, so the 20 does not mean that 20 percent of the population has seen the ad. That is why the word “gross” is used in the name of the metric.

GRP is a useful yardstick for describing ad delivery. For example, an advertiser may buy commercial inventory with a TV channel planning to reach 50 GRPs. However, ahead of air time, it is not possible to know what the audience will be that will be watching each time the commercial is on air. Say it turns out that 10 percent of the potential audience is watching when the commercial is aired the first time. That means the advertiser has another 40 GRPs to go.

Ultimately, a GRP is a normalized measure of spending. As such it is helpful as an input into marketing mix models too. In Figures 5-4 and 5-5, the label of the X-axis, (ad volume reach and/or frequency) is typically expressed as a single value through GRPs. With that, Figure 5-4 indicates that there are diminishing returns when paying more to reach either larger audiences or the same audience more frequently.

Opportunities to See (OTS)

OTS refers to the number of times that typical members of the target audience can possibly view the advertisement in a given time period. Therefore, it is a frequency-oriented metric. Advertisers use it to help schedule their ads (for example, TV commercials) over time. As we will review in Chapter 8, it has been typical to seek an OTS of 2 to 3 with TV commercials in each buying period because that has been considered an effective frequency. In comparison, with print advertising it has been considered more advisable to plan for an OTS of 5 in order for the campaign to be effective.

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