Week 7: Communication 2 - Advertising media metrics

Reach and frequency

Reach: # or % of population exposed to advertising at least once (for a specific period)

Frequency: average number of times those reached are exposed to advertising

examples: page 4

Rating points = 100 x (Reach/ Population size) (it is the % reach)

Impressions

Impressions = Reach x Average frequency

exposures or opportunities to see/ hear

estimate of audience for a media insertion or a campaign

gross rating points (GRP) = impressions/ population size (sum/ aggregate reach of a campaign)

GRPs is an important determinant of media price

Advertising campaign metrics calculation

GRPs is the sum of rating points of all the media vehicles that deliver an advertisement

example: p.7- 9

high reach and frequency is desirable but costly => marketing planners need to trade- off between reach and frequency

high reach and low frequency (danger of being lost in a noisy marketing environment)

low reach and high frequency (can over- expose some audiences and miss others entirely)

planners need to balance both reach and frequency

Target audience analysis

target audience = a subset of total audience

TARPs: target audience rating points

target audience campaign metrics calculation (p.12 - 14)

TARPs is the sum of rating points of all the media vehicles that deliver an advertisement among target audience

net reach (p.15): an advertisement through different media can end up reaching the same audience => 'net' emphasize that the audience is not duplicated

Frequency response models (p.16)

  1. Learning curve response: S shaped curve
  1. Threshold response
  1. Linear response

at a certain point, message becomes fully effective (no effect below or above that point)

relationship between advertising outcome and advertising frequency

graph (p.17)

Effective frequency

a minimum number of impressions is required before being able to influence an audience member

effective frequency depends on

  1. Their loyalty to the brand
  1. Message creativity
  1. Audience level of awareness of the brand
  1. Level of influence sought by the marketer

wear- in: frequency required before a given advertisement or campaign achieves a minimum level of effectiveness

wear- out: frequency at which a given advertisement or campaign begins to lose effectiveness or even yield a negative effect

effective reach: # or % of audience that receives an advertising message with a frequency equal to or greater than the effective frequency (example: p.19)

Calculations

Share of voice (%) = Brand advertising ($ or #) / Total market advertising ($ or #)

Comparing advertising costs

Cost per 1000's impressions ($) = Cost of advertising/ (Audience size/ 1000) = Cost of advertising/ Impressions generated in 1000's

Advertising elasticity of demand = Change in quantity demanded (%)/ Change in advertising spending(%) = [(Q2- Q1)/ Q1]/ [(A2 - A1)/ A1]

Advertising elasticity of demand: linear model (p.24)

Carry- over effects of advertising

advertising affects future demand of product as well

Koyck model (p.25)

Adstock model (p.26)

Optimal advertising spending (p.27)