3 Basic Metrics for Determining Advertising Effectiveness

Making the Most of Marking to Millennials Through Market Research

Group of digitally connected young marketers
Considerations for Creating Advertising Strategy for the Millennial Market. Getty Images | Tetra Images

Millennials, who are usually considered to be between the ages of 18 to 34 years, are widely referred to as digital natives. Most of the young people in developed countries who can be categorized as Millennials have experienced the internet and digital devices as constants in the background and foreground of their lives. Technology usability experts believe this foundation—along with their youthful inquisitiveness and pursuit of change—enables Millennials to adapt more readily to technological innovation.

 

The enormous purchasing power attributed to the generational category of Millennials is roughly estimated to be $170 billion per year. Given the absolute numbers of Millennials and their collective impact on the market advertisers and marketers, advertisers and marketers are keenly interested in how these young consumers react to ads, particularly those ads viewed on the myriad digital devices that Millennials possess and use.

To get a solid view of the impact of advertising on eventual sales, ComScore developed the following metrics, which have become industry standards.

What Is Share of Choice? 

ComScore is a pioneer in copy testing, a fundamental function in advertising analysis.  Over a period of several decades, comScore has studied more than 40,000 TV ads and hundreds of analyses of digital advertising by global brands. ComScore uses a proprietary analysis metric, coined Share of Choice, to measure the effectiveness of ads with respect to influencing brand preference.

A structured simulation of a purchase is used to determine consumer preference before and after viewing an ad for a product.  The lift (increase) in the Share of Choice is calculated from the difference between the two measures.  That is, the Share of Choice is the preference after exposure to the advertising minus the preference before exposure to the ad.

The Share of Choice metric is regarded by some experts as:

“the most well-documented and independently-validated measure of advertising effectiveness in the world.”  

Share of Choice quantifies the persuasive capacity of ads to influence sales, and the metric has a +0.90 correlation for predicting sales. 

What Is Fair Share Benchmark?

One important consideration when measuring the impact of an ad is the degree to which the observed change is at or above the level that would be considered typical for advertisement about a brand.  The Fair Share Benchmark was developed by comScore to determine this difference within the current category-brand environment.  Also, the Fair Share Benchmark is designed to factor in brand loyalty, product category, the number of competing brands in the category.  Importantly, the Fair Share Benchmark also considers the share of preference against a degree of difficulty standard. 

What Is Marketing Mix Modeling?

A considerable strength of the comScore approach is the systematic data collection and analysis of validity that has taken place since the metric was conceived. For instance, the Share of Choice is compared to measures of sales taken from audits of stores, in-store scanner data, and the results of split-cable tests in the market.

 

Marketing Mix Modeling (MMM) employs a technique to associate the test scores to changes in market share.  Four decades and over 2,000 cases of validation, the Share of Choice metric has shown the most robust relation to actual sales figures for across countries, cultures, and multiple verticals. The Marketing Mix Modeling factor enables the separation of marketing variables that can influence the Share of Choice and preference test outcomes.  Using Marketing Mix Modeling clarifies the actual persuasive power of the advertising, in effect providing a predictive measure of sales

Master the Art of Marketing to Millennials

Marketers and advertisers will find these metrics to be of use in pinpointing how Millennials perceive advertising on different channels and how they react to the advertising to which they are exposed.

  Other articles will follow that provide more details about how marketers and advertiser can use market research to reach Millennials with their persuasive messages.

Source:

Crang, D. (2012, January). Next-generation strategies for advertising to Millennials. comScore, Inc.