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How to calculate the effectiveness of an advertising campaign. Methods for evaluating the effectiveness of an advertising campaign

Advertising is one of the most mysterious areas of business activity: no one doubts that it is necessary. But how to assess whether it is really worth the money spent on it, whether it solved the tasks assigned to it, whether it brought profit? Further planning of advertising activities and its control during the activity depends on the answers to these questions.

It is impossible to answer them unambiguously with mathematical accuracy, but in the practice of entrepreneurship, approximate methods are used to determine the effectiveness of advertising campaigns, which help to clarify the picture with the greatest possible accuracy.

Efficiency - everything you need from advertising

It seems that everything is simple: compare how much money is spent on advertising and how much is earned on the advertised product. But there is too indirect a connection between these factors, because profit depends not only on advertising, and advertising, in turn, can affect different objects in different ways. That's why unified theory there is no evaluation of advertising effectiveness.

NOTE! Evaluation of advertising effectiveness is also quite a costly undertaking, so many organizations neglect this difficult and time-consuming procedure. Meanwhile, it is certainly useful, especially during periods of "fall" of the market.

To comprehensively assess the effectiveness, you need to explore the advertising campaign at all its stages:

  • when developing a strategy, benchmarks are developed, with which the achieved ones will then be compared;
  • in the process of conducting - it is better to conduct several “cuts” of efficiency, at least two, to clarify the dynamics;
  • final advertising campaign - analysis of the results achieved.

What is the effectiveness of advertising

  1. Communicative Efficiency, otherwise known as informational. This indicator reflects the number of potential consumers who saw (heard, recognized, etc.) an advertising message. In addition to the quantity, it is also estimated how the opinion of those who contacted the advertisement has changed. In this regard, it is assessed:
    • the quality of the advertising presentation - how appropriate the content and presentation of the advertising "message" for its audience, whether the message is successfully placed, whether the form is chosen correctly;
    • memorability of key information - it is important that during advertising, the consumer remembers at least the name of the organization or the advertised product;
    • impact on the motivation of potential customers;
    • formation of stable associations;
    • creating an opinion and attitude towards the advertised product;
    • features of a sustainable image of the object of advertising;
    • the ability to attract attention, etc.
  2. Economic efficiency- the financial result of the advertising campaign. It is the most difficult to assess, since it requires an unambiguous mathematical approach, which is impossible in the case of advertising. The effect of an advertising campaign may be extended over time, the profit may depend on other factors. Approximate estimates are based on data on the dynamics of sales: it turns out the relationship between the profit received supposedly from a given advertising campaign and the cost of it.

Rules for evaluating the effectiveness of advertising

These requirements are caused by the peculiarity and ambiguity of the object of assessment itself. To get the most reliable result, you should follow 5 key rules for evaluating the effect of advertising activities:

  1. Profit Rule: advertising must generate a profit that exceeds the cost of advertising itself, or at least equal to them. All other results point to inefficiency. In other words, the game must be worth the candle.
  2. Criteria selection rules: you need to track changes sequentially, and for this, select specific positions that will be investigated. It can be:
    • sales volumes;
    • the number of customer requests;
    • turnover of goods, etc.

    3. IMPORTANT! Even with a comprehensive assessment, each criterion should be able to be assessed separately.

  3. Conversion rule: What matters is not advertising itself, but how it is converted into real and measurable performance indicators - in the number of hits (clicks, calls), as well as the number of conversions of these hits into real sales.
  4. Extreme results rule: it is necessary to evaluate both the best and the worst results in order to maneuver between the means that caused such responses in the future, achieving a "golden mean".
  5. Rule of objectivity: you should not embellish the results, because only an honest result of the analysis will help in improving the effectiveness of advertising. Fixing the failed effect of an advertising campaign will also be effective, it will show gaps in market knowledge and weed out wrong marketing moves.

Methods for assessing the economic performance of advertising

This is the most objective indicator, calculated in specific figures, based on the data of financial documents. Advertising does not always show an increase in profits, it is often enough that it prevents losses. Consider various ways calculating the ratio of financial factors of advertising:

  1. Comparison of turnover before and after advertising:
    • the level of turnover in excess of the expected;
    • comparison of profit for additional turnover and the cost of advertising itself.
  2. Advertising ROI Calculation(as the result of each advertising campaign relates to its cost price).
  3. Analysis of target alternatives- how the objectives of the advertising campaign were solved. It is measured as a percentage:
    EE \u003d (Pr fact - Z r / Pr. pl - Z r) x 100%, where:
    • EE - economic efficiency;
    • Pr fact - profit on the fact of the action of the advertising company (in rubles for the selected period);
    • Etc. pl - planned profit for the same period;
    • З р - advertising costs.
  4. MethodROI(from the English "Return of Investment" - "return of investment"). To measure the investment component of the effectiveness of advertising, apply the formula:
    E r \u003d (B before x R - B after x R) / Z r., where:
    • Er - the effectiveness of advertising;
    • В before - revenue indicators before the start of the campaign for a certain period;
    • In after - financial data on revenue for the same period after the advertising campaign;
    • P - profitability of sales of the advertised product (the ratio of the price per unit minus the cost to the net price);
    • З р - advertising costs.
  5. I. Berezin's method- the difference is calculated between the planned indicator without taking into account the influence of advertising and the actually achieved figures (according to the selected criterion - sales or circulation).
  6. Comparison with competitors– a similar product and a comparable time period are taken into account. Based on the analysis of the level of sales, a conclusion is made about the effectiveness of the advertising company.

Methods for assessing communicative effectiveness

Here the figures will not play a key role, because the object of assessment cannot be expressed in them with all unambiguity. To analyze this advertising factor, the following methods are used:

  • interview;
  • questioning;
  • observation;
  • experiment (on a focus group) - in approximately equal markets, advertising is used first in the same, and then in different ratios;
  • testing - tests for the main indicators psychological impact advertising: recognition, memorability, attitude, image, etc.

For more accurate results, the evaluation of the communicative component of advertising effectiveness should be done in 3 steps:

  1. Preliminary estimate- helps to avoid miscalculations at the stage of advertising preparation, which is important, especially in expensive projects. It is necessary to check criteria such as:
    • compliance and coverage target audience;
    • adequate form and content;
    • channels for placing and transmitting an advertising "message", etc.
  2. current control- evaluates the reaction to advertising in dynamics, when it can be corrected.
  3. Final Analysis- is carried out after the end of the advertising campaign, its results will affect subsequent advertising activities.

Advertising in Yandex.Direct or Google AdWords should solve specific business problems. To determine if you are moving in the right direction, you need to monitor each RK, optimizing its settings and gradually increasing the flow of targeted traffic. By customizing advertising for your target audience and budget, after a certain time after its launch, evaluate the results and increase ROI by comparative analysis multiple campaigns.

3 questions before starting work

What are the goals of your advertising campaign?

All goals should be expressed in measurable terms:

  • number of target actions;
  • CPA — cost of action in rubles;
  • campaign conversion percentage.

Let's say if you invite to a webinar, then your optimization goal might be to get 200 registrations. Sell ​​flower arrangements - increase the number of orders from the site by 4-5 times. Success in achieving results is determined by KPI. This is exactly the indicator that determines the whole. You need to make comparisons on it even before making all the settings.

What tools to use for analytics?

For problem solving of this type fit best.

  • Google Analytics.
  • Yandex.Metrica.
  • liveinternet.

Why consider the effectiveness of contextual advertising?

Without evaluating conversion rates, you cannot make adjustments to the course of an advertising campaign. Ultimately, the results can be extremely unexpected, quite possibly unpleasant. Without conversion assessment, it is impossible to determine ROI - an indicator of your investment effectiveness. Moreover, it is important to calculate the conversion for individual advertising campaigns. This is the only way to understand what brings the desired result, make the maximum list of negative keywords, set up the necessary extensions, and then launch effective retargeting.

Analysis and conversion calculation

First of all, we fix the initial conversion rates. Then we determine the campaign budget and the average cost per click. Start from Yandex.Metrica data obtained during the previous optimization period. You can take information for all time and for the last week. So your audit will be deeper, and your expectations will be more justified.

Once you have decided on the time frame, move on to cleaning the campaign from non-targeted clicks. What should be removed first?

  • Inefficient keywords (everything that brought no more than 3 clicks).
  • Garbage words (what was skipped from Wordstat).
  • Ineffective display regions (characterized by low conversion).
  • Inefficient platforms in YAN.

For cleaning you will need statistics:

  • by keywords for the period of interest;
  • according to the phrases of YAN;
  • GEO for campaigns covering several regions or the whole of Russia.

Reports are summarized in an Excel spreadsheet. Now your task is to eliminate everything inefficient. After cleaning, we proceed to the analysis. It is carried out 1-2 weeks after the optimization. The number of clicks, CTR, cost per click and conversion rates are compared - before and after optimization.

Upon completion of determining the conversion values, we display the KPI. We use for this the conversion indicators obtained after cleaning. For example, your conversion rate is 5%. This means that out of 20 attracted visitors, only 1 will leave an application. Let's say average check- 2000 rubles, and the profit from the sale with this number of visitors will be equal to 400 rubles. Accordingly, you can spend a maximum of 400 rubles to attract 1 client (or 20 visitors at the current conversion level).

Let's assume that the marginal cost of a click will be equal to 20 rubles (400/20). If a click costs $20, attracting 20 visitors will cost $400 (20X20), and the revenue at the end of the advertising campaign will be $1,600 (2000-400).

Conclusion: the maximum cost per click depends on the amount of net profit per client, conversion and how many times you want to increase investments. A click price of 20 rubles will allow you to return the money spent on advertising, but nothing more. An increase in profit from investments by 2 times is possible if the maximum cost per click does not exceed the amount of 10 rubles.

Measuring ROI

After measuring KPI, we will be able to determine the most important parameter of any advertising campaign - ROI. This is how we know the true value of our investments. The following formula is used to determine ROI:

The calculation will look like this:

((2000-1600)-400)/400 = 0.

The advertising campaign was not successful, because the ROI is zero. The investment paid off, but it was not possible to make a profit. To achieve a positive result, the cost of a click should not exceed 10 rubles. Only then the ROI will be 100%, and you will earn 2 times more than you invest:

((2000-1600)- 200)/200 = 1, or 100%.


Rules to follow when calculating the effectiveness of contextual advertising:

  1. Your investment should pay off. And advertising is to make a profit, and not just cover investments.
  2. In your measurements, you must be accurate and consistent. Cleaning and performance analysis first, not defining KPIs.
  3. The figures must be converted into actual sales. Otherwise, there is no point in starting calculations.
  4. Analyze both your successes and failures. Take into account the worst and best campaigns, compare them by all indicators.
  5. Any analysis must be honest and objective. Don't sugarcoat the results. Only in this way can you achieve a truly excellent result.

And yet, much can be said about economic indicators are not a measure of marketing effectiveness. But how in practice can one measure (and the effect, as I noted earlier, these are numbers) the effectiveness of an advertising campaign?

I am deliberately not talking about the effectiveness of marketing, about a long-term advertising campaign or marketing program - in these cases, the goals may be different and the effect is considered differently. But even a formula for analyzing the dynamics of sales volumes over a long period will allow marketers and financiers of an enterprise not only to evaluate the effectiveness of marketing activities in a particular period, but also to identify seasonal trends (fluctuations) in sales.

And yet, let's try to evaluate the effect of a local promotion for now. There are a number of formulas that help to more accurately assess the effect of a marketing and promotional event. To begin with, let's define

What tasks do you need to cope with when advertising the subject of marketing?

regular readers have already paid attention to the fact that I constantly pay attention to the fact that it is not necessary to count something in marketing - accountants and economists do! In marketing, it is imperative to satisfy the market!
But in management, understanding how effective you are in your efforts is very important.
  • commercial efficiency- first, solve the problem sales growth
  • communicative effectiveness– secondly, digital communication indicators(the quality of communication of the subject of marketing with the market).
  • economic efficiency Thirdly, you need to carry it out cost-effective(economic indicators)

Commercial efficiency

Calculation of turnover under the influence of advertising (quantification of sales)

Making sales efforts redundant and securing a sale is the main challenge. Therefore, we consider how the turnover has changed under the influence of advertising, in relation to the turnover before advertising:
T d \u003d (T s * D * P) / 100
where:
T d - additional turnover caused by promotional activities, rub.;
T with - the usual average daily turnover (before the start of the advertising period), rub,;
D - the number of days of accounting for the turnover (in the period of active advertising);
P - the relative increase in the average daily turnover for the advertising period compared to pre-advertising
nmm, %.

Please note that your turnover may change and not at all because of the quality of advertising - the seasonal demand for goods has begun, there have been problems with logistics. All this and more can affect the growth of trade. For the calculation, you will need to either neglect this, or take it into account with other formulas and compensation factors.

The number of checks with the advertised product (qualitative indicator of advertising)

The indicator of the increase in the number of checks (accounts) with the product used in advertising is calculated in relation to the indicator before advertising.

The amount of the advertised product in the check (qualitative indicator of advertising)

If we assume that advertising stimulates quantitative consumption, then fixing the number of goods in the basket (account) during the advertising period is also important. Just pay attention, advertising has a cumulative effect of attention to the advertised product and the effect of attenuation of attention after the cessation of advertising. How these effects affect sales can also be analyzed.

Product in category

Advertised product purchases as a percentage of total purchases in the product category. Why is this indicator important? Sales of a product can grow under the influence of advertising even if category sales fall. This indicator allows you to evaluate the quality of advertising with a general drop in sales during a crisis, at the end of the season or out of season sales.

Communicative performance indicators of advertising

The communicative indicators of the advertising campaign are expressed as the results of observation and analysis of the behavior of real and potential consumers. The information obtained in the course of such observations and analysis, as well as the conclusions cannot be reduced to any standard form. Therefore, each time the report on the qualitative results of advertising effectiveness is unique in its own way.

Reach

Reach - the percentage of the target audience who viewed the advertisement during a certain period of time (the number of contacts with the target audience).

where:
K - Number of contacts
P - The size of the audience of the advertising channel (advertising carrier) for the period of advertising

Advertising recall

Advertising recall. In response to a question about advertising a product, the respondent begins to mention specific names. For example, to the question “What TV commercial mobile operators have you seen on television? the respondent can answer unambiguously by naming the trademark, or he can begin to retell the content of the video. The percentage of respondents who call it out of the total number of respondents determines the quality of recall of advertising.

brand awareness

Criteria such as recall or brand recognition are evaluated (depending on the goals of the ongoing advertising campaign). In the presence of both goals, the recall of the brand is first assessed (“Which brands mobile phones come to your mind first?”) and then recognition (“Which of these brands have you seen before?”). The first measurement is carried out without prompts, the second - with prompts in the form of showing respondents images of brands (or a list of their names).

Consumer actions

Actions are expressed in a behavioral response to advertising (purchase, preparation for purchase, search additional information, ignoring, etc.). When trying to find out about the "action" by the survey method, usually those who saw the advertisement are asked next question: "What salons mobile communications have you visited recently?

CTR is an indicator of the communicative effectiveness of advertising, measured as the ratio of the number of certain actions in response to an advertisement (advertising clicks, store visits, leaflets handed out) to the number of impressions of this ad.

CTB is an indicator of the effectiveness of online advertising, measured as the ratio of the number of visitors to a commercial web resource attracted by advertising and making a purchase to total number visitors attracted by advertising. The indicator reflects the conversion of visitors and in some cases is called the conversion rate. As in previous case, the "action" is the purchase itself (not its value).

It is often impossible to absolutely accurately determine the effectiveness of individual advertising media, an advertising campaign, but approximate calculations justify themselves. To show the extent to which advertising can affect the growth of turnover, it is necessary to analyze operational and accounting data. Let's use the formulas discussed in the first chapter. Let's define additional turnover under the influence of advertising:

Тd - additional turnover under the influence of advertising, rub.;

Тс = 27000 rub.

D - 360 days,

Td \u003d 27,000 x 7.5% x 360 \u003d 729,000 rubles.

The economic performance of advertising can also be judged by the economic result that would be achieved from the advertising campaign. The economic result is determined by the ratio between the desired profit from the additional turnover received under the influence of advertising, and the cost of it.

Td \u003d 729,000 rubles.

Up = 230046 rub.

Ud \u003d 10,000 rubles.

E \u003d 729000 x 35% - (230046 + 10000) \u003d 15104 rubles.

But the data obtained is not enough to compare economic efficiency advertising campaign costs. More correctly, the effectiveness of advertising costs can be determined by calculating the profitability:

P (expected) = 172550 rubles.

U = 230046 rub.

P = 172550/230046 x 100 = 75%

Thus, it follows that the prospects for profit growth during the planned advertising campaign for 2011 for the advertising agency IP Chizhov S.P. - positive. The company must invest in further development its advertising activities.

Chapter 3 Conclusions

Applying the proposed advice on the choice of advertising media, on improving advertising activities, the advertising agency will significantly increase the number of potential advertiser companies that are aware of the agency's activities (IP Chizhova S.P.), its products and services.

In addition, this chapter determines the number of consumers who will be in direct contact with the advertising message, the number of notified buyers is 415,411 people. The number of buyers who are ready to buy goods (services) of the company 83082 people is determined and calculated total purchases of goods (services) that can be made during the year when conducting an advertising campaign of 207,705 units of goods (services) per year. An advertising appeal has been developed for the advertising campaign.

Based on the calculation of economic efficiency, it follows that advertising will increase the annual turnover of the enterprise by 729,000 rubles.

Thus, all recommendations are aimed at forcing the management of the advertising agency to revise the plan of the advertising campaign in order to achieve a result due to the attraction of advertising. After all, a clearly drawn up plan for an advertising organization, a sufficient number of Money and properly selected means of advertising distribution will help the company (IP Chizhova S.P.) achieve the set advertising objectives, as well as get a great advantage in competition and increase sales of promotional products (services).