Calculation of the economic efficiency of advertising. Methods for evaluating the effectiveness of an advertising campaign
It is difficult to evaluate an advertising campaign even at the finish line, let alone in the process. Formulas with floating values in advertising work crookedly and incorrectly. The methodology for evaluating the effectiveness of advertising in terms of the ratio of costs and income is clear, but not very perfect.
Let's take, for example, the rating of banks published on the rating.rbc.ru resource: the largest share of advertising expenses in total expenses belongs to Finservice Bank (12.51% of total expenses), which, according to the same data, is unprofitable , and Rossiyskiy Kredit bank became the leader in terms of profit from advertising costs, the amount of profit of which per 1 ruble spent on advertising amounted to 2191.6 rubles. But he still will not compete with such organizations as Sberbank, Russian Standard or VTB.
We will not draw far-reaching conclusions from someone else's rating. However… are the marketers of the Finservice bank worse than the marketers of the Rossiyskiy Kredit bank? The question is moot. Is the advertisement of the Finservice bank worse than the advertisement of the Rossiyskiy Kredit bank? Not necessarily! Why is it that quite often, having spent a lot of money on advertising, an entrepreneur does not get the expected effect?
Often this can be explained by high expectations from advertising, the lack of evaluations of its effectiveness, which could have been previously obtained by conducting a test advertising campaign. In addition, even at the moment, most Russian firms do not have a normal mechanism for market goal setting. If goals are set, then sometimes by the method of "director's poke".
Effective advertising is, first of all, the one with the help of which the planned goals are achieved. Goals can be set both at the level of economic indicators, and at the level of marketing. In our practice, the first approach is more common.
For determining economic efficiency advertising, it is enough to conduct internal research to identify the main indicators characterizing turnover and profit:
Additional turnover for the period after the advertising campaign:
Td \u003d (Ts P D) / 100
Td - additional turnover under the influence of advertising;
Тс - average daily turnover before advertising;
P - increase in the average daily turnover for the advertising and post-advertising periods,%;
D - the number of days of accounting for trade in the advertising and post-advertising period.
Economic result - the ratio of the increase in profits received during and after the advertising campaign to the amount of advertising costs
Economic effect:
E \u003d (Td Nt / 100) - (Up + Ud)
Where is E- economic effect from advertising, rub.;
Тd - additional turnover under the influence of advertising, rub.;
Нт - trade markup for goods, in % of the selling price;
Up - advertising costs, rubles;
Ud - additional costs for the growth of trade, rub.
P \u003d P 100 / U
Р – profitability, %;
P - profit received from advertising the product, rub.;
U - advertising costs, rub.
These are simple indicators, and they seem quite objective, but when determining the effectiveness of advertising, one should not forget about the existence of a whole range of interrelated factors that affect the change in turnover. These include:
- influence of the previous advertising campaign;
- inertia of consumer behavior;
- repeated purchases based on previous perceptions of the value of the goods;
- seasonal fluctuations;
- inflation expectations of consumers;
- other methods of promotion, etc.
Therefore, it is often difficult to determine the real effect directly from an advertising campaign.
The modern toolkit of a specialist in marketing, advertising or PR as a result contains a huge number of tools for determining the psychological, emotional and motivational results of an advertising company.
The classic is the measurement of communicative effectiveness, which shows the effectiveness of the impact of advertising on the consumer. This research can take place before and after the advertisement is published in print or broadcast on television. There are three main methods preliminary check advertising.
Direct evaluation.
In this method, the advertiser presents alternative advertising options to a group of consumers and asks for a rating for each option. These ratings show how well an ad captures attention and how it affects consumers. More high rating indicates more effective advertising.
portfolio check.
Consumers in a group view or listen to a selection of advertisements for as long as they want. They are then asked to recall advertisements and their content. Their level of memorization shows the ability of advertising to stand out from the crowd, be understandable and remain in memory.
Laboratory check.
To measure the physiological response of the consumer, equipment is used that measures heart rate, blood pressure, pupillary dilation and sweating. Laboratory tests measure the attractiveness of an ad but tell little about the effect of the entire ad campaign on the consumer's beliefs, attitudes, or intentions.
There are also two methods for checking ads after they've been released.
Memory check.
An advertiser asks people who have read a magazine or watched a TV program to think of everything they can say about the manufacturers and products they saw. The retention rate measures how long an advertisement can be retained in memory.
Recognition check.
The researcher asks, for example, readers of a journal to indicate what they have seen before. The results of these reviews are used to determine the impact on different market segments and to compare their advertising with those of competitors.
It's in theory. In practice, however, various rating coefficients or indicators characterizing the number of recipients of information are still more often used, such as “Cost per thousand” (CPT - Cost Per Thousand, or price per thousand hits to the audience), “Cost per thousand contacts” (the price that you have to pay to see the ad a thousand times, regardless of the actual number of people who saw the ad), etc.
The reason for this confidence in formulas is very simple - in most cases, full and detailed studies of the effectiveness of advertising activities cost as much, if not more, than the advertising company itself.
Even one of the kings of American retail, John Wanamaker, once said a good phrase: “I spend two million dollars on advertising, but I can’t tell if this is half of what I need, or twice as much as I need.” If we add to this a pronounced shortage of qualified specialists in the field of advertising, the situation that has developed in the advertising market becomes clear - the pressure of the money supply.
Since no one has canceled the law of “transition of quantity into quality”, and in advertising it operates in the same way as in all of nature, then ... despite the fact that the need for effective and “remarkable” advertising is obvious to everyone, a more conservative approach is more often chosen: “ Let's make ads non-irritating and let's have a lot of them." And sometimes the emphasis is only on the second part of the phrase.
Actually, the general trend of the outflow of advertising media on the Internet, observed in last years, is associated with a relatively simple assessment of the effectiveness of ongoing activities: there is the cost of a particular advertising medium and there are actions of buyers that can be recorded, which means that we can say as accurately as possible where and why the money was spent.
The absence of such "counters" in traditional advertising is a problem that has not been solved so far.
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 efficiency– 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) / 100where:
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
Coverage - percentage target audience who viewed ads during a certain period of time (the number of contacts with the target audience).
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. Percentage of respondents calling it from total number of respondents determines the quality of advertising recall. 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 the total number of 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).
Accurate calculation of the cost-effectiveness of advertising is very difficult, since this marketing tool usually does not give the full effect immediately. In addition, the growth in trade turnover is often caused by non-advertising factors - for example, a change in the purchasing power of the population due to lower prices, the expansion of the commodity distribution network, etc. Therefore, it is almost impossible to obtain accurate data on the cost-effectiveness of advertising. However, both advertisers and advertisers want to have at their disposal a means of evaluation, even if it is approximate.
To calculate the economic efficiency, advertising specialists use the following methods:
1. The ratio between the profit received from the additional turnover caused by advertising activities and advertising costs is determined by the formula:
E \u003d Td H Nt / 100 - (Zr + R) (1)
Td - additional turnover under the influence of advertising, cash units;
Нт - trade allowance for a unit of goods, % of the selling price;
P - additional costs for the increase in turnover, cash units.
The result of promotional activities can be: positive - the cost of advertising is less than the effect obtained; negative - the cost of advertising is higher than the effect obtained; neutral - the cost of advertising is equal to the effect obtained.
R \u003d P H 100 / Z, (2)
3. The economic efficiency of advertising can be identified by the method of target alternatives, by comparing the planned and actual indicators, evaluated as a result of investing in an advertising campaign. Efficiency is determined by the formula:
E \u003d (Pf - Z) / (Po - Z) H 100 (3)
Pf - the actual change in the volume of profit during the period of the advertisement, monetary units;
To - the planned change in the volume of profit during the period of the advertisement, monetary units;
Efficiency psychological impact advertising media is characterized by the number of consumer coverage, the brightness and depth of the impression that these media leave in the memory of a person, the degree of attention.
The effectiveness of the psychological impact of advertising on the consumer can be determined through observations, experiments, and surveys.
The method of observation is used in the study of the impact on consumers of individual advertising media. This method is passive in nature, since the observer does not influence the buyer in any way, but, on the contrary, conducts observations imperceptibly for him. According to a predetermined scheme, the observer registers the received data, which are then comprehensively analyzed. The observer, for example, notes which booth of the fair or exhibition-sale attracts most attention of buyers, how long pedestrians linger at a particular storefront, how many people enter the store after familiarizing themselves with the storefront, which product in the window is more interesting and in what demand it is.
The method of observation allows you to evaluate the psychological impact of advertising in natural conditions, in the direct communication of the consumer with a certain advertising medium.
Evaluating the effectiveness of individual advertising media, first of all, it is established whether this medium achieves its goal. So, to determine the degree of attracting the attention of buyers to outdoor advertising (showcase), you can use the following formula:
where B is the degree of attracting the attention of passers-by; O - the number of people who paid attention to outdoor advertising(showcase) for a certain period; P is the total number of people who passed by the shop window in the same period.
Such data can be obtained from the readings of checks punched on the summing cash registers, and by registering the facts of the acquisition of the advertised product by cashier controllers.
An indicator of the effectiveness of the means advertising the retail trade enterprise itself is the ratio of the number of visitors to the store during the period of application of these funds to the number of visitors on average per day. These data can be obtained by observers or with the help of a photocell.
When using the observation method in all cases, a number of conditions must be observed: observation must be carried out in weekdays, not characterized by increased intensity of customer flows (preferably in the middle of the week); the duration of observations depends on the nature of the advertising medium whose effectiveness is to be established.
Along with the observation method, the experimental method is widely used. This method is active. The study of the psychological impact of advertising here takes place in conditions artificially created by the experimenter. If the observation only fixes how the consumer relates, for example, to a certain display of goods, then the experimenter can rearrange the goods, and then observe the change in the reaction of buyers.
In the same way, the experimenter can create a variety of combinations of advertising media and, by comparing the reactions of buyers, choose the most successful of them.
Especially widespread was the study of the effectiveness of the psychological impact of advertising media through experiments in foreign countries. This method is used to determine the impact on buyers of window display, packaging, press ads, radio or television advertising. So, if you need to assess the psychological impact on the buyer of the product packaging, then the same product (for example, washing powder) is placed in different packages.
The psychological effectiveness of such an advertising medium as an advertisement in a newspaper or magazine is determined by the following experiment. The advertisement includes a coupon with the text of a request to send a prospectus, catalog or sample. The buyer must cut this coupon and send it to the trading company whose address is indicated in the text of the advertisement. By the number of coupons received from readers, the advertiser judges whether his ad was noticed in the periodical press and whether the text of this ad turned out to be sufficiently convincing and interesting. However, it should be noted that the small number of requests received may not be the result of the poor quality of the ads, but the fact that the advertised product itself, for some reason, was not needed by buyers.
The survey method also refers to active methods for determining the psychological impact of advertising. This method is time-consuming, but much more reliable than others, as it allows you to identify directly from the buyer himself his attitude not only to the advertising medium as a whole, but also to the individual components of this medium. Using the survey method, you can evaluate the impact of an advertising medium on buyers and determine which elements of its design attract the most attention and are better remembered.
To determine the effectiveness of a particular advertising medium, questionnaires are drawn up, which, according to a previously developed program, are brought to the attention of consumers in writing, in personal conversations, on radio or television. An analysis of the responses received allows us to draw appropriate generalizations and conclusions.
Conducting surveys requires a significant investment of time and involvement in this work. a large number of people. However, the results obtained may not be sufficiently complete. After all, sometimes even for the buyer himself it is not clear whether he bought the goods under the influence of advertising or on the advice of a friend, or was guided by some other considerations. In addition, sometimes verbal questioning of buyers can make them wary. Therefore, it is more appropriate to invite them to fill out a questionnaire, outlining the objectives of the survey, so that the buyer knows its purpose and tries to answer the questions more accurately.
The effectiveness of an advertising event or an individual advertising medium can be expressed by the number of consumers covered by advertising, as well as by the amount of costs per viewer, reader, etc. Thus, the expediency of publishing a newspaper advertisement in a particular printed organ is determined by determining the total number of people who can read it (this number depends mainly on the circulation of the newspaper), or the cost of the advertisement per reader.
The effectiveness of advertising - the strength of the impact of advertising on consumers. Measured by the ratio of advertising costs and increase in sales volumes, an exact measurement is impossible, because. in addition to advertising (the correct definition of the goals and objectives of advertising, knowledge of competitors and target audience, creativity, coverage, frequency of coverage and media planning), a lot of other factors affect the sales process.
- Definition of contribution advertising for the sale of the enterprise and in general its necessity;
- Feasibility assessment preservation (increase, decrease) of the advertising budget;
- Efficiency control individual promotional activities and the advertising campaign as a whole;
Ad Effectiveness Width - how many people "covered" advertising. Depends on the number of advertising media involved (and their coverage), frequency of coverage (intensity of the advertising campaign), duration of the advertising campaign, volume of one advertising message.
Ad Effectiveness Depth - informational (communicative) effectiveness of advertising - how often people were "covered" by advertising and how well it worked. Advertising campaign effectiveness indicators - advertising recognition, advertising memorability (the ability to remember advertising), motivation level (persuasiveness), impact on purchasing behavior.
| 1 | Cognitive level | Changes in knowledge about the company's products and services. |
|---|---|---|
| 2 | Affective level | Formation of a positive relationship with the manufacturer. |
| 3 | Inciting Level | Formation of a positive attitude towards the manufacturer. Consumer behavior (the probability of choosing the advertised brand increases). Formation of intentions to make contact with the company, to purchase its goods. |
Psychological effectiveness of advertising -
- Communication Ability to form increased expectations for the product (more important than the formation of brand awareness).
- Identification level (the effect of "referring to oneself"). The level of understanding of an advertising message and, accordingly, its better memorization depends on the degree of its identification, i.e. is determined by the level of its perception by the buyer, as intended directly to him or to people familiar and understandable to him.
- Aesthetic characteristics of the message - advertising material should be understandable, credible, "liked" by the viewer so that he does not have an additional incentive to switch the channel or radio station, turn the page in a magazine faster or turn away from the billboard.
- Benchmarking - the basis of advertising effectiveness and the initial assessment of the effectiveness of previous advertising activities. Conduct a survey of those who will be targeted by your advertising campaign, asking them to tell you what they know (or believe is a fact) about your company. The purpose of benchmarking is to identify the degree of knowledge and stereotypes of consumers regarding your company and its products (services), i.e. current position cases (what "sags" from the areas of activity and why). All further advertising should be based on supporting or overcoming these stereotypes!!!
- Competent development of an advertising campaign – from the target audience, advertising goals to creative (see the previous 11 steps).
- Pretest- a preliminary forecast of the effectiveness of the impact of the created version of the advertisement. "Map of Perception" is a method of advertising testing based on a direct assessment by respondents of the presence or absence of significant consumer characteristics of the product under study. The assessment is given by the consumer after getting acquainted with one or another stimulus material related to the product (name, logo, packaging design, advertising message, etc.). Upon the fact of the survey of respondents on the questionnaire, statistical processing of primary data is carried out in order to obtain an assessment of the product according to the factors of choice that are significant for the consumer. As a result of the study, indexes of attracting involuntary attention, attractiveness and memorability of an advertisement are determined. A method for measuring the memorability of advertising, which is based on three components: "spontaneous memory" - an advertisement is remembered when a product category is mentioned (for example, the category "washing powders", the product - "Tide"); "remembering when presenting a product" - advertising is remembered after pronouncing the name of a particular product or its demonstration; "memories after the retelling of advertising." The sum of these three indicators is the share of the target audience that remembered the advertising message. And look at how the indicators correlate with each other.
where X 1i - the number of consumers who remembered the advertisement spontaneously, X 2i - the number of consumers who remembered the advertisement after presenting the advertised brand,) X 3i - the number of consumers who remembered the advertisement after retelling its content, YK 1i, K 2i, K 3i, - are used when the consumer names several competitive brands at the same time and it is necessary to determine their weight in terms of consumer preferences. - Measuring the effectiveness of individual advertising media. Interviewing clients about the source of information about the company and compiling a report. In any case, the results will be approximate, because. consumers often do not remember, confuse the source of information or name the last, and not the first, seen (heard) advertising medium. For example, a consumer learned about a company from a video, immediately before buying, he chose a company on the Internet, and he will name the pillar seen at the store as the source of information.
- Criteria for evaluating the economic efficiency of advertising:
- It can be seen from the table
that advertising activity:
- brought slightly more visitors - only 50 people more,
- however, the visit-to-purchase conversion rate increased dramatically from 29Y to 42Y
- The number of advertising audience and advertising costs. To quantify the effectiveness, CPM (costs per thousand) and CPC (costs per rating point) methods are recommended.
- Financial efficiency of advertising (formula for calculating the effectiveness of advertising):
where E is the economic effect of advertising; Td - additional turnover under the influence of advertising; Нт - trade allowance for goods (in C selling price); Ur - advertising costs; Ud - additional costs for the growth of trade. - Research on the effectiveness of advertising "on the trail" advertising campaign, to the same audience that participated in the benchmarking study. It is not necessary to talk to the same people, but it is important to talk to the same type of people that you think will be affected by the ad. In this study, the same questions will be answered as in benchmarking, and thus the results obtained can be compared.
- Post test- analysis of the effectiveness of an advertising message, designed to study whether the advertising has achieved its goal and what conclusions can be drawn from the advertising campaign. In practice, the most common criterion is the memorization of an advertisement (or service). Other commonly monitored measurements include awareness of advertising elements, awareness, image rating, preference for your company.
Cumulative (delayed) effect of advertising - the impact of advertising has a latent (hidden) period and the ability to accumulate and manifest itself not immediately, but upon reaching a quantitative and qualitative critical threshold (memorability, recognition, audience coverage, etc.). Advertising needs time to influence the mind and push to action. On average, such a period of time is taken equal to 10-12 months.
Synergistic effect of advertising (increasing the effect on the principle of geometric progression) - advertising works on the principle of 1 1=3. The main factors influencing synergy are exposure time, target audience coverage, frequency of coverage (repetitions).
- The environment that really surrounds advertising.
- Advertising activities of competitors.
- Seasonality (heaters do not work in the July heat even with very decent advertising support).
- Weather.
- Price.
- Range.
- Scope of the company.
- Influence of the previous advertising campaign.
- The inertia of buying behavior.
- consumer inflation expectations.
- The availability of a product or service to the consumer.
- Market saturation.
- Advertising cost.
- Solvency of demand.
- Fashion.
- Other factors...
- Quick effect forgetting advertising (after 4 weeks).
- Consumer reactions for advertising under the terms real contact and for the same advertisement, but indoors, when conducting research based on the type of focus groups, they are completely different. The secret is that the state of the consumer changes a lot. Consequently, the filters of perception of information also change, respectively, and the advertising message is perceived differently.
- Select to test respondents , as close as possible to the portrait of the consumer, which in practice is not always available.
- "False negative" results (exclusion of potentially effective materials) and "false positive" results (inclusion of ineffective materials). This is due to the fact that when conducting a study, people are introduced to the options "forcibly".
- Almost impossible to evaluate an image campaign , as a result of which no one applied, but many remembered the trademark and subsequently became customers.
- Clients are not always eager to tell you what's really wrong with you. This is due to such a psychological phenomenon as "the desire to avoid confrontation."
- Advertising budget structure for most enterprises, it varies greatly from month to month: how can you compare the effectiveness of advertising in two months, when in the first half of all advertising costs were spent on the production of a new booklet, and in the second, a third of them were “gobbled up” by the upcoming video, and its placement will go only next month?
- Lack of specific goals and objectives of the advertising campaign.
- Incomparability of goals and objectives advertising campaign with goals marketing activities and corporate strategy.
- Lack of information about the target consumer and the sources of information he receives (channels of access to the consumer).
- Absence feedback with the consumer.
- Segmentation errors.
- Low qualification of employees responsible for advertising, as well as employees of advertising agencies.
- Lack of systematization and consistency during promotions.
- Entrust development and placement of advertising to professionals.
- Change current ad. You can’t reach a new goal by following the old path! Completely abandon the concept of existing advertising and come up with something completely new. Entrust the development of advertising to new people (new employees or a new advertising agency). Change the form and content of advertising, color scheme etc.).
- See how everyone is doing (for example, modules in the press) and vice versa (instead of rectangular advertising - round or square, on color pages - black and white layouts, etc.).
- Test your ad if not in focus groups, then at least on friends - acquaintances from the target group (on people from the group for which the advertisement is intended).
(c) Unified Announcement Service
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, but advertising, in turn, can affect different objects in different ways. That's why unified theory there is no evaluation of advertising effectiveness.
NOTE! Grade advertising effectiveness- is also quite a costly event, so many organizations neglect this difficult and lengthy 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
- 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.
- 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:
- 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.
- 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.
- 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.
- 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".
- 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.
IMPORTANT! Even with a comprehensive assessment, each criterion should be able to be assessed separately.
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:
- 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.
- Advertising ROI Calculation(as the result of each advertising campaign relates to its cost price).
- 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.
- 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.
- 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).
- 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 on the main indicators of the psychological impact of advertising: recognition, memorability, attitude, image, etc.
For more accurate results, the evaluation of the communicative component of advertising effectiveness should be done in 3 stages:
- 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:
- relevance and coverage of the target audience;
- adequate form and content;
- channels for placing and transmitting an advertising "message", etc.
- current control- evaluates the reaction to advertising in dynamics, when it can be corrected.
- Final analysis- is carried out after the end of the advertising campaign, its results will affect subsequent advertising activities.