Different values are used to measure the effectiveness of an advertising campaign. In media planning, depending on the individual channel, they can be used to calculate one or another characteristic, for example, to evaluate the profitability of financial investments or to determine whether an announcement is needed among representatives of the target audience.
In this article, I will consider a number of indicators that are most often used when drawing up media plans for different channels.
Methods of classification
In general, there are two large groups of media indicators:
- Weekends, they are measured. Their value cannot be known without measurements or even conducting a special media study.
- Derivatives These parameters can be calculated by a special formula, having at the same time a set of some initial data.
It is also worth considering the classification depending on a separate communication channel (television, Internet, radio, outdoor advertising, as well as printed publications). Some of the indicators can be used in several channels at once, so there is no unambiguous division here.
During my university studies, I took a Media Planning course where we used a different classification. According to it, the indicators were distributed depending on their purpose, and only three categories came out. However, the statistics that made it possible to calculate the effectiveness of the use of Internet channels were not taken into account here. However, I will give an example of such gradation in the image below.
You can also read another article on how to make a media plan.
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Overview of the main indicators in media planning
I will not divide all these indicators into categories, I will only try to briefly outline their essence and provide calculation formulas.
A/S (Advertising that sales)allows you to calculate what percentage of sales the brand spends on promotion. The smaller the A/S value, the more efficiently the advertising costs are allocated. It is measured as a percentage.
It can be calculated using the following formula:
Most often, one year or another interval during which the report is conducted is taken as a period. Instead of revenue, you can also take net profit for the same period, but this option is used less often by companies.
EXAMPLE: Brand A spent 1 million rubles on advertising in 3 months. At the same time, the profit from the sale of the product for the same period amounted to 800 thousand rubles, and the net profit – 200 thousand. Let’s calculate the effectiveness of advertising both in terms of revenue and profit.
A/S 1 = 1 000 000 / 800 000 = 1,25% A/S 2 = 1 000 000 / 200 000 = 5%
Affinity index, compliance index. It shows how much the message will reach the target audience when it is broadcast on this channel. It is measured as a percentage, and its high values indicate that the advertisement will definitely reach the right consumer. For example, an Affinity index in the region of 100-110% is considered optimal
Affinity index is calculated according to two main formulas. In the first calculation, you can carry out specific programs or programs and take their ratings as a basis:
The second formula is based on the total rating of different target audiences:
CPA – Cost Per Action, that is, the price per action. This metric shows the cost of a targeted user action. More details about CPA have already been written in the Community, you can read the calculation formula by following the link.
Target actions can be clicks (CPC), leads (CPL), users or visits (CPV), orders (CPO), and so on, depending on the specific advertising tool or communication channel.
It is used in Internet advertising, so it is often not necessary to calculate the cost of the target action yourself. It is enough to simply install the counters in the Yandex.Metrik or Google Analytics services, then the calculation will be done automatically.
Rating Point Cost, or CPP (Cost Per Point). This is the price of informing the audience when reaching its coverage of 1%. This value indicator is used primarily in evaluating the effectiveness of promotion on television.
The value of CPP can be calculated using two formulas, depending on whether we take a channel or a separate transmission:
EXAMPLE: The promotion budget for one TV channel is 120,000 rubles. The total rating of programs where advertising is shown is 52 points. To calculate the CPP in this case, we proceed as follows:
CPP = 120 000 / 52 = 2 307 рублей за пункт
It is impossible to say how effective it is, because the TV channel chosen, its rating, level (federal or local), reaching the target audience, etc., play a role here.
CPT allows you to determine the cost per thousand covered users (Cost Per Thousand). It is used to compare the efficiency of advertising investments by individual media sources. And the lower its value, the more effective the channel taken from the point of view of the effectiveness of investments in promotion.
CPT can be calculated based on coverage (CPT for Cover) and contacts (CPT for OTS). Accordingly, in this case there will be two formulas:
CR (Conversion Rate) shows how many users took a targeted action after clicking on an ad. This may include application, registration, placing an order, filling out a form, etc. Moreover, you can calculate this ratio not only on the website, but also in offline sales.
To calculate CR, you must use the following formula:
Instead of visitors, you can take the number of transitions or clicks, completed applications, etc., according to which it is planned to calculate the conversion. It depends only on the complexity of the sales burst and what exactly you took as the target action.
CTB (Click That Buy) – This is an indicator that allows you to determine the ratio of transitions to purchases. It is used in advertising campaigns where it is necessary to calculate the effectiveness of links. CTB is calculated as follows:
Moreover, you can take not only purchases for targeted actions, but also registrations, filling out forms, placing orders, calling requests, prepayments, and more.
CTR (Click Through Rate) shows the clickability of the ad, that is, how many users who saw it clicked on the button, link, and so on. With its help, you can determine the effectiveness of creatives for attracting conversions to the site or downloading the program. Also, CTR shows precisely the qualitative characteristics of the promotion – whether the advertisement is configured correctly, whether a specific ad is relevant to the requests of the target audience, whether the place of placement is chosen correctly.
CTR is calculated according to the following formula:
Frequency of advertising message (Average Frequency, or simply Frequency) shows the average number of contacts of people from the target audience with the ad. That is, these people saw or heard the message at least once. Sometimes in media planning it is denoted as effective frequency (EffFq), but more often, especially during calculations, it is simply written as F.
This indicator can be calculated as follows:
EXAMPLE: The GRP of one radio station (taking into account programs and the number of exits) for the advertising campaign is 396. At the same time, the reach of the advertising message is 43%. To calculate the frequency, do the following:
F = 396 / 43 = 9,2
rating, or Rating Point, reflects the percentage of the audience that saw or heard the advertisement. The rating of a program or channel is also found in media planning, and in this case it means the percentage of the audience that watched or listened to a particular program, TV or radio channel at a certain moment.
The rating is measured in percentages and is used in almost all media sources. However, its name is different:
- On television, it will be the television rating of the program or TV channel. TVR (Television Rating).
- 15 minutes of air time are taken by the audience on the radio AQH (Audience of Quarter Hour).
- In print editions, the average audience of one issue is taken as this AIR (Average Issue Readership).
- It is used simply in outdoor advertising Rating.
If we are talking about the rating of a program or an individual channel, then data on them for different periods can be found in specialized applications for media planning or in the Mediascope service.
If it is necessary to calculate the rating of an advertising message or source manually, the following formula is used:
GRP (Gross Rating Point) is the total rating among the entire covered audience, obtained as a result of the campaign. For its calculation, all ratings of advertising messages are taken. Its value is given in points or percentages, while it can be greater than 100. The formula for its calculation looks like this:
Most often, GRP is used to calculate other performance indicators. You can also use the derived formula from the frequency calculation for the calculation.
EXAMPLE: The frequency of the advertising message is 13.5. At the same time, the coverage of the advertising campaign reached 32%. To calculate GRP, proceed as follows:
GRP = 13,5 * 32 = 432
Target rating (TRP, Target Rating Point) is the sum of the ratings obtained after the advertising campaign among the target audience (!). This is probably its only difference from GRP. And to determine it according to a specific program and channel, they do the same thing – their rating among the target audience is taken as a basis. These data are also usually provided in statistical services or Mediascope.
Like GRP, TRP is expressed as a percentage or points, and can be greater than 100.
HUT (Households Using Television) is used in media measurement on television and allows you to determine the percentage of viewers who had the TV on at a specific moment. As a rule, this indicator is needed for the calculation of other media statistics – the share of television viewing, aka Share (see below).
HUT can be calculated using the following formula:
Share of television viewing, or Shareused in television. It allows you to determine the percentage of viewers who are watching a specific channel or program, who, out of the total number, turned on the TV at the moment. It is measured as a percentage, while for the calculation you need to calculate another media statistic – HUT. The formula looks like this:
OTS (Opportunity To See) used in media planning to estimate the total number of contacts with a message in numerical terms. Useful when running a campaign in several cities or showing one ad on several different media platforms.
OTS is calculated according to the following formula:
Coverage of the advertising campaign denoted as Reach or Cover, and by it is meant the number of people who have contacted the message at least once. It can be indicated in thousands of people or as a percentage of the total number of the target audience.
In media planning, coverage can be marked with a given frequency. For example, Cover 1+ means that people saw or heard the ad at least once. And Cover 3+ means that the number of contacts is 3 or more. The higher the frequency, the lower the resulting coverage.
The campaign coverage is calculated using the following formula:
share of voice SOV (Share Of Voice), shows the share of a specific brand’s message among the entire flow of advertising over a market or segment. It allows you to determine the advertising activity of a brand or an individual product, how noticeable it is to consumers among the entire stream of advertising. The greater the value of the share of voice, the more visible the product and at the same time the higher the probability that it will be seen, remembered or even bought.
SOV is measured as a percentage and is taken across each media source, i.e. television, radio, internet, press, etc. separately. It can be calculated using the following formula:
For the calculation, you can also take TRP (instead of GRP), then the share of the voice of the brand or its product among representatives of the target audience will be calculated.
Share of advertising costs (Share Of Spend, SOS) allows you to determine the activity of a brand or product from advertising in a separate communication channel – on television, in the press, on the Internet, and so on. With the help of this indicator, you can learn about the share of brand spending on promotion in relation to the market or segment.
As in the previous case, it is taken for a specific period and measured as a percentage. It is calculated according to the following formula:
SOV and SOS ratio
If you correlate the two listed parameters, you can determine how effective the brand’s investments in advertising are, whether they pay off when compared with competitors.
- If SOS Less SOV, then the company’s spending on advertising is much more effective than that of competitors on the market. Accordingly, with lower costs, the brand has much more weight in the media environment. Usually, this ratio is found in large organizations, market leaders, who receive discounts or more favorable conditions due to large investments.
- If SOS is equal to SOVTherefore, the financial costs of promotion are relatively optimal, and it is possible to even improve these values.
- If SOS more SOVThis means that the organization’s advertising spending is less effective than that of its competitors. However, this occurs when higher quality and more expensive customer contact is achieved. This also happens with new companies that have just opened, and the awareness of the audience about them is small.
I tried to analyze the main indicators that are used when drawing up a media plan for various sources – from the Internet to outdoor advertising. Media planning is not easy, and if you have already started, you will have to study it thoroughly (I speak from my own experience). But in the future, you can get a job as a media planner, since this profession is needed, especially in large companies.