ROI Genome

Reach-Based Planning is not Enough

Advertisers have been recently making moves towards variations of targeting and reach-based planning as they shift funds towards digital advertising.  In principle, this is a smart step towards media planning and buying.  More reach within your specific customer base should translate into more sales, right?  Well… not always.


One area that seems to be overlooked in planning is understanding the relative value of each channel’s reach and each type of impression.  The goal is to balance the impact of advertising impressions with their costs – striving for impactful, cost-effective reach.


Is Emphasizing Reach the Right Approach? 


In the absence of understanding the impact of your advertising, will emphasizing reach garner more brand sales and equity?  Perhaps, but there are wildly generalized assumptions inherent in this thinking that lead to suboptimal marketing plans.  In an extreme example, we shouldn’t expect an advertising campaign with a 50% reach achieved exclusively through banner ads (with questionable viewability) to drive the same amount of sales as a campaign that also achieves 50% reach but through non-skippable pre-roll video advertising with a 100% completion rate.  Most folks will agree these are not reasonable comparisons, yet this concept is rarely being considered when advertising dollars are allocated across programmatic and direct buys.


In our latest ROI Genome Intelligence Report (“The Value of an Impression”), we shared that a digital video impression is on average 3x more effective than a digital display impression – and in many cases can be closer to 5-10x more effective.  Of course, there will be many differences across businesses (size of brand, brand awareness, message focus, creative quality, amount of branding, etc.) but recognizing the general effectiveness gap is a good starting point to discuss the relative value of cross-channel reach goals.  This is important, particularly when we’re seeing significant budgets being shifted from offline to online impressions without a real understanding of the effectiveness of digital advertising – in totality, or by tactic and channel and type of creative message.


Media Planning in Digital World


When planning, estimate the total number of impressions as well as weekly/monthly reach and reach within your target(s) - many advanced marketers also take steps to understand the viewability and exposure or time with an ad to help improve the understanding of advertising delivery. But these steps still don’t help marketers understand the impact that the advertising has on business performance.  This is where analytics comes in – which helps marketers understand the value of an impression by marketing tactic, channel, and message type and to provide a complete view of your marketing efforts.  This yields a clear picture of your best way forward.


It is true that response/value can vary from campaign to campaign as time marches on, but as you start to quantify results across campaigns you uncover what drives the effectiveness of different creatives within and across platforms.  In fact, over time you can not only quantify the value of an impression by tactic, but can also quantify the value of different creative attributes – such as how long was the brand or brand color shown, did we emphasize a known brand audio cue or statement, and was our full product/service lineup shown or did we focus exclusively on one area of business.


Risks of Over-Targeting


Marketers should also consider that driving broad reach is ideal for many businesses but that many times reach within a demographic or buyer base is optimal.  Targeting is seemingly important for niche products or those with clear consumer target audiences, such as advertising pet products to pet owners and not wasting advertising on non-pet owners.  Seems reasonable right?  Most of the time this may be true but let me give you a real-world example that challenges this thinking: My family recently brought home a dog: our first pet!  Advertising exposures in the past (when we were not pet owners) are now influencing our decisions on what pet products to buy.  This doesn’t mean advertising outside of a target helps drive effectiveness, but the advertising is not entirely wasted where there are long-term factors to consider.  This is certainly more pronounced for less extreme situations where advertising momentum has built up equity over months and years for products that exist in most households.  Along these lines – most advertisers should generally avoid super premium CPMs to buy a smaller yet seemingly more targeted audience.  Understanding the value of each impression can help inform these decisions.


Balancing Reach and Effectiveness


One of our clients has taken a Reach + Effectiveness approach and systemized this across their regions and brands across the globe -- using not only reach but balancing the effectiveness and efficiency of that reach.  This type of strategic planning is ideal – ensuring that not only are you prioritizing reach but also weighing the effectiveness of that reach across platforms to determine how and where to invest.  Ideally all companies would be assessing the effectiveness of their advertising – and viewing that effectiveness on a level playing field across tactics.  For example, how does my Facebook advertising compare to my YouTube advertising? What about skippable vs. non-skippable? Branded quickly vs not? And how do those compare to traditional yet still very much important channels such as TV advertising?


Understanding Nuances Within Channels and Demos


Understanding the effectiveness of your advertising and value of an impression by channel is helpful, but for true game-changing marketing wisdom you need to go a step further where marketing strategy meets tactical insight.  Wouldn’t it be great to understand not only that your digital video impressions are 3-5x more effective than your digital display impressions, but that your delivery to millennials is only 2x more effective than middle-aged adults even though you’re paying 4x as much?  Or that advertising to non-loyal buyers or switchers is 5-10x more effective than directing advertising towards your competitor’s loyal buyers?  This doesn’t mean we shouldn’t go after our competitors’ buyers, just that we need to be prepared for less effective marketing impacts (within this year at least… long-term effects over 3-10 years are a story for another day).


Value of Impressions as a Starting Point


Unfortunately, many companies and brands with smaller budgets don’t have luxury of unified and comprehensive analytics to understand the impact of their advertising and cost-effective reach, but this is changing as organizations are investing in analytics to build this knowledge base for decision making.  In the meantime, a starting point would be to consider the value of impressions across marketing channels by weighing factors such as:


  • viewability,
  • time spent with the advertising,
  • number of touchpoints consumers are exposed to,
  • amount of branding delivered within the creative, and…
  • whether the advertising will halo onto other products or services in the franchise.


In addition, we explore many of these factors in our ROI Genome Intelligence Reports which are released throughout the year – please keep this industry resource on your radar!

- Mike Menkes is a Senior Vice President at Analytic Partners