“Traditional ways of measuring media fall short and make the planning of an ‘always on’ strategy difficult.”
traditional ways of measuring media challenges brands
Advertisers have always wanted to understand the effectiveness of media and increase ROI on their communication spend. Throughout the years, many researchers have calculated this through modelling a simple (linear) relation between total media expenditures (across channels) and brand and sales KPIs. However, this way of working has made it very challenging to correctly plan for an ‘always on’ strategy. It relies on simplistic methods that do not take the complexities of media exposure fully into account and hence fails to derive the most out of media spend effectively. In addition, this traditional approach does not integrate learnings from academic research. In other words, it is a simplistic representation of data without any added intelligence. This need to understand media effectiveness has become even more vital for brands to understand given the dynamic and rapid changes in the media landscape.
Therefore, what are the shortcomings of the traditional approach to understanding media effects? Firstly, media differ in their impact. The unique characteristics of each medium make it probable that media channels vary in the likelihood of reaching consumers and making them remember a campaign. For example, viewing an advert in cinema is likely to have a substantially different impact than an ad on a news website.
Ad formats also matter. Within each channel, the specific format of ads drives their effectiveness. In online advertising, for instance, we know that the likelihood of seeing a homepage takeover is much higher than that of a skyscraper banner.
Alongside that, ads may linger in people’s memory. Merely visually looking at the relationship between the effects of weekly investments and relevant KPIs implies that weeks without media investment have no impact on consumers. However, we know that advertising can have a longer-term impact through consumer memory, even in the absence of actual advertising. The size of this effect depends on the history and awareness of a brand.
Lastly, creative execution is pivotal: it plays a massive role in the effectiveness of advertising. ln addition to influencing consumers’ overall feelings in response to an ad, creative strength is also a determinant of the amount of attention an ad will receive.
How can we measure the effectiveness of media better?
So, how can we tackle these defects to determine the effectiveness of media better? Based upon robust academic research and studies, along with 20 years of experience in media planning, we developed a new KPI called the Reality Performance Score (RPS). RPS represents the real number of contacts that brands have with consumers. The RPS is used to plan media better and by determining a minimum and maximum level of contacts required to achieve optimal media ROI, we can successfully implement an “always-on strategy”. Our model translates GRPs and reach into a measure of actual contacts that consumers have with the medium, making it more powerful. Figure 1 shows what the Reality Performance Score entails.
Figure 1 The Reality Performance Score
To validate RPS’ relationship with marketing KPIs compared to expenditures and GRPs, we conducted a large meta-analysis over 52 weeks on over 300 ads from more than 30 brands, in 5 different categories. The results showed that there is no significant relation between expenditures and marketing KPIs. This implies that a lot of the marketing mix modelling conducted should stop relying solely on expenditure data in their models. Second, the relation between GRPs and marketing KPIs is weak. If there is no other option, we recommend working with GRPs instead of expenditure data. Lastly, the analysis revealed that the strongest and most significant relation was between RPS and marketing KPIs. For almost all brands we saw a significant link between RPS and the different marketing KPIs.
Another meta-analysis was conducted to uncover the impact of RPS on different marketing KPIs. This along with the previous meta-analysis show that the RPS has a significant relation with almost all marketing KPIs that we measure for brands. This implies that investing in a brand helps and significantly impacts all brand KPIs in the funnel.
What can you do with THE rps?
The RPS is a better predictor of effect than the traditional measurements of expenditures and GRPs. Never before has a measure been available that can so strongly predict the effect of communication. It provides a new perspective on effectiveness and can be used to compare brands, campaigns, and countries. By multiplying the importance of RPS for each marketing KPI by its effect size, the RPS impact can be obtained, which is a new measure that advertisers can benchmark their performance against. Also, advertisers can determine their own RPS impact and examine whether this impact is e.g. higher during campaign periods, meaning that your media is more effective during those times
RPS is also very effective in determining the optimal number of contacts and can be linked to brand tracking (knowledge, attitude), website tracking, social mentions, and hard sales figures. How many contacts are needed to break through the clutter and when does it reach its saturation point related to the KPI you want to influence? We have developed a bandwidth analysis for this, which has also been translated into a tool, used by agencies and advertisers to plan future campaigns. For this, we estimate a so-called “S-shaped” model, in which we calculate the “location” of two turning points – after what amount of contacts does the effectiveness of each additional contact sharply increase (lower bandwidth limit), and when does this relationship “flatten” again (upper bandwidth limit)? Calculating the minimum and the maximum number of media contacts for each medium and KPI allows brands to make informed decisions about their media and determine whether it will produce the desired results.
The results of working with the RPS and the “prediction tool” have led to significant improvements in brand performance and can be used directly in tracking and campaign effectiveness measurements. The RPS has been developed to revolutionise media planning and help advertisers and marketers to plan their media more effectively and ultimately deliver on ROI targets.
