The 5 most important steps for measuring efficiency and effectiveness

Standardized models for measuring advertising impact are still lacking. Until solutions for this are available, guest author Daniel Skoda suggests that advertisers follow these five steps to measure effectiveness and optimize processes.

One of the greatest challenges in maximizing advertising impact is measuring the effectiveness and efficiency of digital media activities. This is primarily due to the lack of standardized models for measuring advertising impact. A uniform and comprehensible system would be the solution. Existing approaches lack holistic applicability across different format and inventory categories. Until the industry responds with comprehensively applicable, fully neutral solutions, there are already several steps that advertisers should consider to measure the effectiveness of their marketing activities and optimize processes as best as possible.

1. Avoid misunderstandings in evaluation

The effectiveness of campaigns depends on several criteria. However, some parameters and crucial variables are often overlooked. These include, among other things, the actual contact distribution. It is important to consider the difference between the calculated contact dose, in terms of average contacts (OTS – opportunity to see), and the actual contact distribution. The OTS value provides no information about the distribution of contacts across individual contact classes. It shows how often the reached target group (net reach) has seen the advertisement on average, not the individual persons. Advertising impact or an effect on the "advertised person" only occurs, however, when a defined contact frequency (depending on the industry, for example, 4-5 contacts) with the advertising medium has demonstrably taken place. Therefore, it is crucial for success that the actual contact dose per user is evaluated in detail via an ad server and subsequently optimized.

The problem of measurability and maximizing advertising impact can be attributed, among other things, to the lack of comparability of the net reach of some media. The moving image market in particular is reaching the limits of panel logic due to progressive fragmentation. Advertisers must be aware that genuine user behavior and actual net reach of target groups for TV campaigns, for example, cannot yet be mapped. In the online sector, however, transparent measurability can be guaranteed and consistent media control for efficiency and effectiveness can be achieved through the implementation of MRC and IAB standards in conjunction with relevant measurement providers.

2. Establish KPIs

Defining and continuously optimizing KPIs is an essential part of measuring effectiveness. A distinction should be made between qualitative and quantitative factors. Quantitative KPIs include, for example, target group reach, format and environment quality (measured by ad viewability), and achieving the desired contact dose. All these factors can be measured and compared. Qualitative KPIs are insights that help to improve campaigns. For instance, advertisers can collect meaningful data on recommendation intent, brand affinity, and ad recall. Online surveys, to which users are invited via the campaign or website, represent an effective way to do this. To measure the effectiveness of campaigns, it is important that both quantitative and qualitative factors are taken into account.

3. Consider multidimensionality

Insights into advertising impact (effectiveness) are only meaningful if comparability between different channels is created and the multidimensionality of the customer journey is taken into account. Instead of using one-dimensional distribution models, companies should distribute conversions as a percentage across multiple interaction points during the customer journey. Corresponding attribution models can additionally show what contribution a channel has actually made. Multi-channel attribution allows for a precise representation of campaign performance and can identify inefficient and unprofitable campaigns. An example of a measurement that allows for the comparison of digital to classic TV measures, for instance, is measurement via the baseline of online shop traffic. This clarifies which target groups were really reached and whether media investments are paying off.

4. Define tools and use data

Advertisers must be aware that data is often pre-interpreted by third parties. This is because third parties act as filters, and their methodology is often limited and does not allow for a complete mapping of advertising impact. If companies are willing to interpret data themselves, the problem is that the "raw data" from large platform providers (such as Google and Facebook) is not freely available. Therefore, it is recommended that advertisers afford their own ad server or a CDP, or engage in active tag management, and activate the obtained data in DSPs. Depending on the solution provider, deterministic matching helps to refine the data. Deterministic matching makes use of common identifiers, such as email addresses, login details, postal addresses, and telephone numbers—provided that advertisers can collect such data. This enables companies to deterministically match their users across different devices with a high degree of accuracy. Campaigns can thus be evaluated more precisely, which in turn has a positive effect on effectiveness and efficiency.

5. Derive actions

Only through continuous real-time data analysis can an ideal channel mix be found, budgets allocated in the best possible way, and media buying optimized so that the greatest possible advertising impact (effectiveness) is achieved with optimized costs and processes (efficiency). Advertisers must be aware of these processes and urge their partners to plan and execute campaigns with corresponding professionalism so that an effective and efficient campaign result can be recorded in the end.

 This article first appeared on W&V.