11 Metrics to Measure Advertising Effectiveness

A new study has found that in-store sales spikes are usually attributed to TV advertising. The study, based on data collected from more than 3,000 retail outlets across the US, found that when television ads air for a product in the week before it goes on sale in store, there is often an uptick in sales during that time period.

TV is not the only type of advertisement attributing to increased sales. Publications including popular magazines, online content, and other mediums also yielded similar results. https://fomoconews.com/  states that between 2005 and 2013, advertising on television was the most effective out of any medium. This is attributed to people staying at home more frequently than in previous years. With this in mind, advertisers are shifting budgets away from print to television.

TV advertising

“One reason why TV advertising is so effective is it’s the only medium where you can reach consumers at all times of day,” said Scott Cunningham, vice president of client services for Nielsen Catalina Solutions. “You can’t be everywhere with digital media.”

The study used what are known as “attributable sales spikes” to measure advertising effectiveness. It took the sales data of over 3,000  retail outlets before and after ads aired on television, magazines, and  online to figure out the sales increases that could be attributed to advertising.  The study also found that online ads are not as effective as TV or print advertisements.

TV ads are usually most effective when they air on Sunday through Thursday during the evening hours. This is because over 50 percent of television viewers are watching programming during this time frame.

Increased in-store sales

Another reason for increased in-store sales is the lack of online ordering capabilities for many of these products. For example, 53 percent of Americans surveyed said they purchase beauty products in-store at least once a month. Of this percentage, 38 percent said they purchase the products online, but this is often for pre-made products because of the lack of ability to customize them.

Some companies have found a solution to the ineffectiveness of online advertising. For example, one pizza company hired a website that would send people to their store if they were searching for a particular type of pizza that they did not have in stock. The effect was effective since consumers would be looking online for these products while their house was being built. The increase in sales from them visiting the store instead of going online was so successful that it led other stores to follow suit.

Television advertisements

In terms of television advertisements, data shows that the duration has an effect on effectiveness as well. For example, public service announcements are very effective since they are usually shown for two minutes or more. On-screen advertisements that air for less than 30 seconds are not as effective because the consumer does not have enough time to fully process the product.

Another factor that has an effect on advertising effectiveness is the type of programming that the advertisement is aired in. For example, commercials that air during professional sporting events are more ineffective due to the amount of time spent on good and bad plays throughout the game.

“It’s like people looking at a beautiful girl and then they look away and then when they look back, she’s gone. It’s too difficult to call.”

Advertising effectiveness

Studies of advertising effectiveness are rare these days since the majority of companies’ main goal is to increase sales, not to see if their approach is more effective than others. Some companies do measure their advertising effectiveness by comparing the cost per purchase.

Many companies are hesitant to release data related to their advertising effectiveness since there is a significant amount of information that is proprietary and could give competitors an edge. The study recommends that advertisers concentrate on measuring what they can control, such as the budgets spent on each medium and how often their ads air on television.

Advantage of digital media

The study also suggests that advertisers take advantage of digital media by running ads during non-peak hours on television. This allows them to save money on TV ads while still getting consumers to their stores. Companies are also advised to send text message coupons in addition to advertising in-store because many people are too busy during television advertisements to be bombarded with extra information.

The study was conducted by Nielsen Catalina Solutions, a joint venture between The Nielsen Company and Catalina Marketing Corporation. The data was gathered from 2005 through 2013 and accounted for over 4 million sales spikes during that time period. This is the first time that detailed data has been published about how effective different types of advertisements are.

The study also looked at other methods of advertisement other than television and other print publications. This included billboards, free product samples, and even expensive celebrity endorsements.

Free product samples

The study found that free product samples given out by stores were effective since consumers could test the products before buying them. However, coupons that required a purchase to receive a discount were not as successful because they did not drive traffic to the store. Celebrity endorsements were better than average but still failed to reach the effectiveness of TV and print ads. While the study only focused on outdoor advertising, there is still much research to be done about how consumers react to different types of advertisements.

The study also looked at how much it costs for companies to advertise in each medium. For example, TV ads were found to be much less expensive than print ads. Newspaper advertisements cost $42 per advertisement and magazine ads cost $42 per advertisement as well. On the other hand, it cost $2,385 per TV ad and $934 per radio ad. This is only one year of data and not all companies will have the same results since they determine their own strategies for advertising effectiveness.