Measuring of advertising effectiveness

Measuring of advertising effectiveness
See also
Selection of target markets Brand equity measure Incremental sales Cost calculation Pareto chart Research strategy Sales analysis Matrix diagram Sales techniques

Measuring of advertising effectiveness involves identification of the degree of achievement of the goals that was set by marketing managers before the advertising campaign. As a rule, as the main goal of advertising campaign is considered to be an increase in sales and in consequence profits of the company.

Analysis of the degree of advertising coverage

There are two types of tests:

• Coverage (percentage of target audience, which at least once encountered this advertisement)
• Frequency (tells how many times the average consumer comes into contact with a given ad)

The greater the coverage and frequency, the better advertising effectiveness.

Research methods in advertising

• Log method - random group of people (they may not be professionally involved with advertising) are given journals with days and hours. Their task is to take notes, when they watch any particular program in TV or hear in radio.
• Method of random phone inquiries - involves dialing randomly selected people in the course of particular television or radio program to determine how many of those people are watching or listening to the program.
• Computer based methods:
  • Audiometric - involves installing a special device to the radio, which allows to register turning radio on and off and the particular wave set on the radio receiver. Later audiometer is passed to the research firm for further analysis and data collection.
  • TV audience measurement - is based on similar principles as audiometric method, and involves special device mounted in the TV set in the household. The collected results allow to determine the hours of TV watching and thus reach of advertising.

Methods for testing the degree of advertising to reach the consciousness of recipients

By reaching consciousness we mean e.g.:

• Degree of remembering the content of advertising
• Degree of association of advertising with the products concerned
• Determination of relative emotional response of advertising recipient towards products advertised

Research methods in consumer advertising reception

• Eye-camera method - randomly selected group of people are presented with advertisement. During the screening the movements of the eyes are observed and the elements of advertisement on which the viewers focus longer.
• Study of the readability of the advertisement. It is a method that involves led psychological analyzes, which are designed to identify content and the degree of absorption of information by the recipient
• Consumer rating. This method is carried out by the following steps:
  • Selection of a random group of potential customers
  • Presentation of a few selected advertisements
  • Assessment of ads by the group (both elements of the ad and the composition as a whole)
  • Choose the best advertisement according to the jury (random customer group).
• Playback method. It involves placing advertisements in a specially prepared magazines. Supplied to a selected group of people, and then 24 hours after reading, interviewing them with the test questions. Such action is to determine which ads attracted the most interest. This method may also be used to test television commercials. Interview is conducted on the second day after the issue of advertising in TV.
• Method of diagnosis - involves interviewing random readers, what magazines they recently read and which advertisements they remembered. Then, customers are divided into three categories:
  • those who remember only that they had seen advertising
  • recipients who associate advertisement with the product name or company
  • Recipients who read the advertisements and at least half of the information was remembered by them

This method is not a precise measurement, however, allows to specify reaction of three groups of customers and compare the readability of advertisement prepared by company and its competitors.

• Program analyzer method involves random group of people. Recipients during the tests, have a special device with two buttons, they press green - if they like the advertising (or part of it), red - if not, in the case when they have neutral opinion they do not press any button.
• Psychogalvanic method, is used to measure an emotional, physiological body response to advertising. These tests are similar to a lie detector, to the fingers and forearm of a customer two electrodes are attached, and special device register a graph of emotional impulses during watching of the advertisement. The shape of the graph informs about the interest of the recipient with individual elements of the ad.
• VOPAN marketing research method analyze the effectiveness of advertising based on the change in customer's tone of voice. Special equipment is able to distinguish between a high tone of voice (indicating positive feelings) and low tone of voice - corresponding to negative feelings. Method is objective, but there is considerable difficulty with accurately identify the state of the feelings of the customer.
• Penetration method. Penetration indicator - measures the proportion of people who identify and know particular advertisement:

$S={{p*s} \over 100}$

where:

• S - effectiveness of advertising,
• p - penetration rate,
• s - constant (20%).

Measuring effectiveness of advertising through its impact on net sales

Research methods:

• Study of sales in the past - based on the analysis of changes in the volume of sales.
• Test market research - involves crafting two distinct markets:
  • test market - in which changes in the volume of sales are the result of the activity of all factors (including advertising),
  • control market - where sales volumes are the result of all the factors without advertising.

The difference between the volumes of sales in these markets is an essential source of information on the effectiveness of advertising

• Econometric models

Examples of Measuring of advertising effectiveness

• Direct Response Rate: This type of measuring advertising effectiveness involves measuring the number of responses to the advertisement, such as website visits, phone calls, or clicks on a web ad. This is used to measure the success of direct response campaigns, such as those for a special offer or limited-time promotion.
• Sales Measurement: This type of measurement involves looking at the sales of the product or service before and after the advertising campaign. This allows marketers to track the effectiveness of their campaign in terms of how it influences sales.
• Brand Awareness: This type of measurement involves measuring the level of awareness of the brand, product, or service among consumers. Marketers can measure brand awareness through surveys or focus groups to gauge how much of an impact an advertising campaign has had on people’s awareness of the brand.
• Social Media Engagement: This type of measurement involves looking at the engagement of an online ad or social media post. Marketers can measure the success of an online ad or post by looking at the likes, comments, shares, or other types of engagement it has received.

Advantages of Measuring of advertising effectiveness

Measuring the effectiveness of advertising campaigns has several advantages. Firstly, it allows the organization to know whether their advertising efforts are working as desired. This helps the organization to optimize its advertising budget and to make more informed decisions about future campaigns. Secondly, it allows companies to measure the return on investment (ROI) of their campaigns. This gives them insight into which campaigns are successful and which are not. Thirdly, it allows organizations to identify the channels that provide the highest ROI and the most effective strategies for reaching their target audience. Finally, it enables them to assess the impact of their campaigns on brand awareness, customer loyalty, and other important metrics.

Limitations of Measuring of advertising effectiveness

Measuring of advertising effectiveness is subject to a number of limitations. These include:

• Difficulty of isolating the effect of a single advertising campaign from other factors that can influence the sales. For example, the company's strategy, pricing, changes in the market, and other external factors can all impact sales figures.
• Difficulty of accurately measuring the impact of the campaign on brand awareness and the company's reputation.
• Lack of access to the full range of data that can be used to measure the effectiveness of the campaign, such as the results of surveys, focus groups and other forms of qualitative research.
• Difficulty of predicting the long-term effects of the campaign, such as its impact on customer loyalty and brand equity.
• Difficulty of accurately measuring the return on investment of the campaign, as other factors such as production costs, distribution costs and promotional costs also need to be taken into account.

Other approaches related to Measuring of advertising effectiveness

In measuring of advertising effectiveness, there are other approaches as well, such as:

• Measuring the brand awareness – it is possible to measure the awareness of a brand or a product among the target audience. This can be done by surveys, focus groups, interviews and other research methods.
• Measuring the customer loyalty – it is possible to measure the degree of loyalty of customers to the brand or a product, for example, by analysing their purchase decisions.
• Measuring the response rate – it is possible to measure the number of responses from the target audience to an advertising campaign, for example, by analysing the number of calls, emails, web searches and other responses.

In conclusion, measuring of advertising effectiveness involves identification of the degree of achievement of the goals that was set by marketing managers before the advertising campaign, as well as other approaches such as measuring the brand awareness, customer loyalty, and response rate.

References

• Lavidge, R. J., & Steiner, G. A. (2000). A model for predictive measurements of advertising effectiveness. Advertising & Society Review, 1(1).
• MacKenzie, S. B., Lutz, R. J., & Belch, G. E. (1986). The role of attitude toward the ad as a mediator of advertising effectiveness: A test of competing explanations. Journal of marketing research, 130-143.

Author: Krzysztof Wozniak