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Marketing MathTM

Tag Archives: digital advertising

Can Facebook Build on It’s Advertising Success?

05 Nov

facebookSay goodby to the concept of the “long tail” of web advertising and potentially to the layers of middlemen ranging from ad tech vendors to exchanges to media agencies standing between advertisers and publishers (at least Facebook). Performance drives media investment decisions and Facebook appears to be doing very well on this front. At least with one sector Read More

 

 

Progressing Toward a Viewable Impression Standard

01 Feb

digital media viewabilityAs we have learned in both business and politics, “declaring” victory and actually earning one can represent two different positions on the continuum of success. That said, the news on Friday is that the ANA, 4A’s and IAB have agreed that viewable impressions will ultimately be the method for assessing digital media efficacy… not click-through.

Clearly, this is a positive first step toward reform in digital ad campaign measurement. However, much work remains to be done in addressing concerns over the variety of measurement services and the accuracy of their respective methods for assessing viewable impressions.

Several years ago, the aforementioned trade associations formed the “Making Measurement Make Sense” (3Ms) task force to work toward a multilateral solution to this measurement challenge. Of late, the task force has been working closely with the Media Ratings Council (MRC) to assist in establishing measurement standards that will smooth out some of the counting discrepancies between publishers and digital ad measurement providers which currently exist when it comes to viewable impressions.

Interested in learning more? Check out the Ad Age article regarding this announcement.

Why Working Media is Still a Relevant Ratio

20 Jul

In the decades since full-service agencies unbundled and the 15% agency commission fell by the wayside, advertisers have sought ways to assess the efficiency of their overall advertising investment.

One of the more reliable measures of efficiency had been the ratio of working media to non-working media. Working media being defined as the percentage of an advertiser’s budget spent on distributing their message to the intended audience (media pass-through costs). Conventional wisdom held that non-working media expenses (i.e. production, studio charges, agency fees, etc.…) should fall between 15% and 20% of an advertiser’s total spend.

The media landscape evolved to include digital, social and mobile channels, which have garnered a greater percentage of media spend, leading many industry pundits to suggest that focusing on working media ratios as a measure of efficiency is irrelevant. Why? Partly because of the increased focus on content creation, analytics and the expansion of an advertiser’s roster to include a host of specialty agencies. All of which have served to fuel non-working media costs.

Stop. While applying a 15% to 20% benchmark may no longer be appropriate, that doesn’t nullify the need to assess the efficiency of advertiser spending.

One must remember that there have also been developments within the industry to increase efficiencies and offset the justification for a rise in non-working media as a percent of total spend. Digital media asset management systems, production centers of excellence, offshoring and programmatic buying are but a handful of items which have leveraged technology to wring costs out of the system.

Advertisers have no choice but to establish goals and benchmarks for monitoring the efficiency of their overall advertising investment. No one is suggesting that this be done at the expense of creating brand relevant, distinctive, effective content. Quite the opposite, trimming unproductive non-working media expense is a necessary means of boosting that effectiveness. Perhaps this is why major advertisers such as Unilever and PepsiCo publicly share their goals and performance as it relates to the non-working media ratio.

The fact is that advertisers’ agency rosters and third-party vendor networks have expanded dramatically. This in turn has created additional layers and redundancies across many of their agency network partners, which can serve to fuel non-working media expense. A few short years ago the World Federation of Advertisers (WFA) conducted research, which found that a majority of advertisers surveyed felt that their agencies had added layers of costs when it came to one important aspect of their advertising spend… media buying.

So why shouldn’t advertisers monitor non-working media spend in addition to the analytics utilized to assess effectiveness? In the end, eliminating waste is part of a marketing organization’s fiduciary responsibility to their enterprise.

The good news is that advertisers can establish their own internal guideposts for monitoring working media ratios. It is relatively easy to look back on expenditures by category to provide a historical perspective to calculate this particular measure of efficiency. Importantly, this will also allow advertisers to establish firm goals to assist them with their resource allocation decisions.

 

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