Key Measures Of Advertising and marketing Outcomes
Marketing activities may not have an immediate impact on revenue, revenue, or cash flow. However, this does not mean that there is no impact or that the impact of a marketing activity cannot be measured.
An advertisement can convince a consumer that a particular brand is superior to its competitors, but the consumer cannot buy that brand until they need it. A sales call can generate interest in a company's services, but that interest may not translate into a sale until it's time to renew.
Because of this, there are many metrics of marketing results that can provide insights into the success of marketing activities. These actions are often referred to as interim actions because they represent more immediate results that may be related to future financial results. Interim measures are important because they can provide feedback on the success of marketing activities before actual sales and revenue generation. Such feedback is of course only helpful if there is a connection between the interim result and the financial results.
The marketing discipline has developed a variety of measures and metrics. Whole books were devoted to cataloging and defining marketing activities. In one book, nearly 200 metrics related to digital media alone are identified. The Marketing Accountability Standards Board maintains a Common Language Marketing Dictionary that contains standard definitions for many measures of marketing outcomes.
Measures and metrics related to the results of marketing activities take many forms, depending on what is being measured and how the measure is being used. The same “number” can be used differently in different contexts. Therefore it is important to know how a metric is defined and how it is used. For example, product awareness, as measured by a consumer survey, can be descriptive when it relates to the number or percentage of consumers who are currently aware of the product, or it can be predictable when it relates to an expected future outcome of an advertising campaign .
It is useful to look at the different ways that measures and metrics can be designed starting with the difference between measures and metrics. Some common types of intermediate marketing efforts can be found in the list below. The list is by no means exhaustive, but it is intended to illustrate some specific measures and metrics used by marketers. Note that these measures and metrics can often be operationalized in different ways.
General intermediate marketing measures and metrics
Advertising Wearout: The rate of decline in the effectiveness or selling power of an advertisement after contact with the target audience
All Commodity Volume: The total annual sales volume of retailers, which can be aggregated from individual store levels to larger geographic groups. This measure is a ratio, so it is typically measured as a percentage (or on a scale from 0 to 100). The total US dollar sales that flow into ACV include total inventory sales and not sales for a specific product category – hence the term “total volume of goods”.
Brand Value: A measure of a brand's worth, often operationalized as the additional revenue the brand makes versus the revenue it would make if it were sold without the brand name
Brand Awareness: A level of familiarity often evidenced by questions like "Have you heard of Brand X or" Which brands come to mind when you think of "luxury cars"? The former question is a recognition measure; The latter question is a recall
Brand Preference: The percentage of those who know a brand and prefer it over your competitors, assuming that price and availability are the same
Brand Image: A measure of how a brand is perceived in people's minds. The brand image is a reflection (albeit possibly imprecisely) of the brand personality or the product nature. It's what people believe about a brand – their thoughts, feelings, expectations
Brand Loyalty: A measure of the extent to which a consumer generally repeatedly purchases the same manufacturer-made product or service over time, rather than buying from multiple suppliers within the category. To what extent a consumer consistently buys the same brand within a product class
Carry-over Effect: A measure of the effect of a marketing campaign beyond a single period of time (i.e., a delayed effect). The rate at which the impact of a marketing activity diminishes over time
Click: A measure of the number of users who clicked on a particular internet advertisement or link
Customer Lifetime Value: The monetary value of a customer relationship, based on the present value of the projected future cash flows from the customer relationship
Customer Capital: Customer Capital is the total combined Customer Lifetime Value (CLV) for all customers of a company
Customer satisfaction: A measure of the perceived satisfaction of customers with their experience with the offers of a company. It is generally based on survey data and is expressed as a rating. It is measured at the individual level, but almost always at the aggregate level. Customer satisfaction is generally measured on a five-point scale that ranges from "very dissatisfied" to "very satisfied".
Day-after-recall: A method of testing the performance of an ad or commercial that involves interviewing members of the audience one day after contacting the ad or commercial in a media vehicle to determine how many viewers can remember ( without outside help and support) encountered this particular ad or advertisement
Sales Coverage: A measure of the availability of products sold through retailers – usually as a percentage of all potential outlets – and indicates a brand's percentage of market access
Frequency: The average number of exposures received by the portion of the defined population that has been "reached" (i.e. received at least one exposure to an advertisement or campaign) assessed during a given time period
Gross Rating Points (GRP): Measures the size of an audience (or the total number of exposures) reached by a given media vehicle or schedule during a given time period. It is expressed as the rating of a particular media vehicle (if only one is used) or as the sum of all the ratings of the vehicles included in a media plan. It includes every duplication of the audience and is equal to the reach of a media plan multiplied by the average frequency of the schedule. Goal Scoring Points: Express the same concept but with a closer audience in mind
Impression: A measure of how often an ad is viewed. Also known as exposures and opportunities-to-see (OTS), they all refer to the same metric: an estimate of the audience for a media insertion (an ad) or campaign. In an internet context, an impression is a single display of online content on a user's web-enabled device. So, it's the number of times the ad is displayed, regardless of whether it is clicked or not. In theory, every time an ad is viewed, an impression is generated. The number of impressions received depends on the reach of an ad (the number of people who see it) multiplied by its frequency (the number of times they see it). Note that impressions don't take into account the quality of the ads, or even whether the consumer actually “sees” the ad: an opportunity to view the ad, a look, or a detailed ad all count as one impression
Intent: A measure of attitudes towards a customer's stated willingness or plan to behave in a certain way. A common operationalization is the intention to buy, the stated plan to buy a particular product or service at a later date
Inventory Velocity or Inventory Turnover: A measure of the time period that begins when the raw materials or inventory is purchased and ends when the finished goods are sold to the customer (the period of time that a company owns the inventory). It is measured by dividing the cost of goods sold by the average inventory level
Leads to the Deal Ratio: A measure of the number of sales made divided by the responses to a particular marketing activity
Market Share: The percentage of a market (defined as units or sales) that a particular company accounts for
Media mentions: Number of product or service mentions or appearances per medium and month and whether these mentions were positive or negative
Price sensitivity: a measure of the extent to which demand for a particular product is affected by a change in price
Rating point: A rating point is defined as the range of a media vehicle as a percentage of a defined population (e.g. a television program with a rating of 2 2% of the population reaches).
Reach: This metric is also known as net reach and indicates the number or percentage of people in a defined population who are exposed to advertising at least once. The number of different people or households that have been exposed to a particular ad or media plan during a given period of time. It is also known as cumulative audience, cumulative reach, net audience, net reach, net non-duplicated audience, or non-duplicated audience. Reach is often expressed as a percentage of the total number of people in a specific target audience or market
Callback (Assisted and Unsupported): The percentage of people in a survey situation who will remember a particular ad or commercial when asked generally and specifically about what they remembered
Referrals by Client / Per Client: Number of clients ready to refer new clients and number of referrals from each client
Sales per customer: Number of sales made by a specific customer in a specific period of time
Sales by sales channel: Number of sales that were made through a specific sales channel in a certain period of time
Willingness to Recommend: The percentage of customers who say they would recommend a brand to a friend
The definitions come from the Marketing Accountability Standards Board's Common Language Marketing Dictionary. You can go through the list and correlate the impact of these interim measures and metrics with the possible financial outcomes.
For example, the ad recall usually predicts a higher probability of product selection at the point of sale. So increasing ad recalls suggests that revenue will increase. It's not an exact science. However, if you know non-financial metrics and metrics and compare them to previous periods and those of competitors, you can say a lot about how your business is doing – or will do – in US dollars.
ContriBranding Strategy Insiders: David Stewart, Professor of Marketing and Business Law at President of Loyola Marymount University, Author, Financial Dimensions of Marketing Decisions.
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