Half my advertising spend is wasted; the trouble is, I don't know which half.
In an 'Era of Accountability', there is more scrutiny on all areas of investment in a business than ever before, and advertising is not immune to this. Measurement and accountability are the buzzwords of the decade and whilst investments in advertising are currently at an 8-year high, marketing was one of the first expenses to be cut as the pandemic hit, with additional pressure to justify advertising spends to stakeholders. Evaluating the impact of communications planning not only gives the evidence to justify investment into advertising but ensures that money is being spent in the most effective way to ensure continued growth for a brand.
However, there is no single source of truth when it comes to measurement, it’s a complex world of multiple forms of data that can lead to different conclusions, with accountability being just one outcome.
The following sections will explore the fact that evaluation is a key component of communications planning, but not only because of accountability. More importantly, evaluation helps to measure effectiveness and it is effectiveness that will have longer lasting business impacts. This leads on to the impact of the data selected to conduct measurement and why it is important to select the best data for the objective at hand, from the start, looking not only at immediate results, but long-term growth of the brand too.
Accountability and Effectiveness
Evaluation is not only key for accountability, but it also allows for improvements and optimisations to plans, more importantly, enabling the measurement of the effectiveness of advertising. Focus should not only be on accountability as this can lead to converging on but a few key performance indicators (KPIs), which cannot produce a full picture. Furthermore, effectiveness cannot be determined by a single measure (Binet and Field, 2007). In evaluating advertising, steps should be taken to promote both accountability and effectiveness, and an important contributor to that is the data selected to be evaluated.
Which data to evaluate and the impact of that selection
Focussing on too few or incorrect metrics can lead to inefficient advertising. Those that only investigate a few intermediate metrics (e.g., awareness and other measures of 'brand health') to account for activity may see reduced effectiveness compared to those brands that look at hard metrics (e.g., market share or penetration) (Binet and Field, 2007).
This is not to say that intermediate metrics should not be used, more so that intermediate metrics should be used as leading indicators rather than standalone metrics for success. There is not one single way of measuring communications and so a 'balanced scorecard' of a variety of leading indicators should be used, which allows for broader evaluation of communications and in doing so also makes for greater accountability.
The Tesco Turnaround story shows how intermediate metrics were set as the KPIs, including brand perceptions on trust, quality and value, and the effectiveness of the campaign was measured by improvements in these perception metrics but also hard metrics such as profit and returning customers. Tesco were able to measure the media contribution to an increase in Quality (32.5%) and Value (30.9%) perceptions, as well as the short-term increase in sales (66%) and a longer-term increase in sales (34%). This use of multiple data points, both leading indicators and hard metrics, showed the overall growth for Tesco over a 4-year period and not just a narrow view on the campaign.
When looking at hard metrics, it is important to select the right hard metrics to evaluate at the point of setting objectives, which in turn will determine the data evaluated. For example, in the case of loyalty and penetration, it has been found that whilst both metrics work hand-in-hand, penetration is three times more likely to be the main driver of growth and profit compared with loyalty (Binet and Field, 2016). Therefore, whilst evaluating and measuring loyalty and retention data may be a good indication of the success of a communications campaign, failure to evaluate penetration alongside this could lead to misrepresentation of results. This shows the importance of selecting the right data to measure upfront when setting objectives, as it will determine how successful communications is at driving business growth.
Importance of determining which data to measure upfront
Yorkshire Tea knew that to increase sales, they had to look at driving penetration, as loyalty alone would not bring in the revenue. To measure the impact of their campaign on penetration, they looked at market share figures and brand perception. Selecting these metrics and objectives upfront, allowed them to monitor the effect of the campaign and ultimately hold it accountable to driving sales. This is an example of why it is so important to select data that not only gives a view on the measurement and success of communications, but also overall business performance.
The perception tracking measured by Yorkshire Tea is also a good example of a leading indicator that shows the longer-term effects of the campaign. Often, a communications campaign will be measured on shorter term data, such as digital metrics or immediate sales. However, it is data such as market share, penetration and brand perception metrics that will show the longer-term effects of communication on a brand (Clift, 2016). Tourism Central Coast also measured longer-term data such as intention to travel over 12 months and the halt in decline of tourism over two years. This selection of data ensured that the impact of communications was being evaluated on an on-going basis, rather than a one-off measurement of success. This is another reason why selecting the correct data to evaluate is the most important element in measuring communications. Selecting short-term data only will not allow for measurement of effectiveness in the long-term.
Evaluation is a key component of communications planning because it helps to hold investments in advertising to account, however, effectiveness, alongside accountability, should also be taken into consideration and thorough evaluation can help with both.
Holding advertising to account can often lead marketers to be too laser-focused on a small number of intermediate measures, such as levels of awareness, in turn reducing effectiveness and business growth. To be both effective and accountable, marketers need to select the right data to be measured. This includes using a ‘balanced scorecard’ for evaluation, using a mix of intermediate data as leading indicators, hard data that shows business impacts and ensuring there is a focus on the long term as well as the short term.
The opinions expressed here are those of the author and were submitted in accordance with the IPA terms and conditions regarding the uploading and contribution of content to the IPA newsletters, IPA website, or other IPA media, and should not be interpreted as representing the opinion of the IPA.