Advertising Metrics
This module covers the concepts of impressions, gross
rating points, CPM, reach, frequency, and share of
voice.
Author: Paul Farris
Marketing Metrics Reference: Chapter 9
Impressions are the basic unit
of advertisement measurement
Each time a person has an opportunity
to see an ad, an exposure, or
impression is counted
More accurately, these are Opportunities to See
as we don’t know if the person actually paid attention
Definition
Impressions = Exposures = Opportunities to See (OTS)
IMPRESSIONS
Impressions
Rating Points are impressions as a percent of a population. Therefore, if an
advertisement is shown on TV 4 times and that show is watched by 10,000
people out of a population of 100,000, that advertisement would generate 40
rating points (4 x 10,000 / 100,000). Because people can be exposed to an
advertisement multiple times, this measure is often greater than 100.
Definition
Gross Rating Points (GRPs) represent the sum of Rating Points over
several media vehicles
Gross Rating Points (%) = Impressions (#) / Total Population (#)
Definition
Target Rating Points (TRPs)
replace the total population with a specific group
GROSS RATING POINTS (GRPS)
Gross Rating Points (GRPs)
To measure the cost efficiency of campaigns, advertisers monitor the
cost per impression. Given this is likely to be an impractically small
number (fraction of a cent) CPM is more often quoted.
Definition
CPM is just the Cost per Thousand Impressions
CPM ($) = Cost of Advertising / Impressions Generated (in 000s)
Example:
20,000 impressions generated for $400 have a CPM of $20.
COST PER IMPRESSION AND CPM
Cost Per Impression and CPM
If impressions are the basic unit of measurement in advertising, a company
might also be interested in how those impressions are distributed across a
target population. The company might want to know how many different
people are actually being exposed to their advertisement (known as “reach”).
They also might be interested in knowing how often (on average) someone
sees their advertisement (known as “frequency”).
By definition then, Impressions are the product of
the number of people (Reach) & how many times
they see it (Frequency)
Definition
Total Impressions (#) = Frequency (#) * Reach (#)
REACH AND FREQUENCY
Reach and Frequency
REACH
Reach
Definition
Reach: number of people who have been exposed
to the advertisement
Reach of
Advert A
AKA Net Reach: The qualifier “net” is often
used to emphasize that individuals are not
double counted when calculating reach.
Caution:
Only count
once
A Venn Diagram is often the best way to
illustrate Reach
Reach of
Advert B
Definition
Effective reach is registered only after a threshold
(effective frequency -- often 3) has been achieved
Effective Reach (#) =
People exposed at or above a given Effective
Frequency (#) level
Reach of an
advertising campaign
Definition
Average Frequency is the average number of times each person who has
been reached has an opportunity to see the advertisement.
Frequency (#) = Total Impressions (#) / Reached Individuals (#)
Definition
Effective Frequency is the number of times a person
needs to be exposed to an ad for it to be counted as
“effective”.
FREQUENCY
Frequency
FREQUENCY RESPONSE FUNCTIONS
Frequency Response Functions
These are three common assumptions about responses to advertising:
1) Linear:
steady progress
1.2
Linear Response
1
0.8
0.6
Cumulative
Effectiveness
0.4
0.2
0
1
2
3
4
5
Frequency of Exposure
1.2
2) Threshold:
complete effect at certain point
Threshold Response
1
0.8
0.6
Cumulative
Effectiveness
0.4
0.2
0
1
3) Learning - S – Curve:
accelerating followed by decelerating
marginal effectiveness
2
3
4
5
Frequency of Exposure
1.2
Learning (S) Curve
1
0.8
0.6
Cumulative
Effectiveness
0.4
0.2
0
1
2
3
4
5
Frequency of Exposure
6
7
A company might want to compare the impact of their advertising with
their competition. Share of voice is one measurement used to
measure this relative difference. It does not, however, capture the
overall effectiveness of the advertising campaign.
Definition
Share of Voice =
Company Advertising Spending / Total Advertising Spending in the Market
Conceptually it may be better to use impressions
to measure share of voice to take out the impact
of potential cost differences to the advertiser.
Definition
Share of Voice = Company Impressions / Total Impressions in the Market
SHARE OF VOICE
Share of Voice