How to Make “In-Game” Adjustments to Improve Advertising ROI

March 26, 2012

Imagine a coach who only shows up after the game to find out the final score. No half-time adjustments, no in-game adjustments based on what’s working and what’s not.  Is this good coaching? Of course not.

Advertiser as Coach -- Why Advertising ROI Isn't the Final Score

The final score is just that–a final score. It doesn’t say anything about what caused the game to be won or lost, and more importantly, what adjustments could be made throughout the game to win.

Measuring advertising ROI only is like a coach coming to the game after it’s over to learn the final score, and then declaring victory–or defeat.

Coaching After the Game is Over

In my last post, Driving Higher Advertising ROI Without Big Data, I described the apparent disconnect between the growing avalanche of “big data” and CMO’s continuing frustration with their inability to measure marketing effectiveness.

Given this, the 3R framework of Reach, Resonance and Reaction is a simple, yet powerful framework for evaluating advertising effectiveness. As important as it is to measure sales impact, measuring advertising ROI is not the be all and end all.

The 3R framework illustrates why this is the case. Reaction is the outcome, the end product. It is the product of Reach and Resonance–they are both drivers of Reaction. Even when Reaction is strong, Reach and/or Resonance aren’t always optimized. And this is the opportunity for the advertiser to coach–during the game.

A Simple Case Study — The Power of In-Flight “Coaching”

A client invested a significant amount in a broadscale digital campaign:

  • Target (disguised):  males, aged 21-29
  • 100 million impressions
  • Mix of banner ads, rich media, on-line video
  • Multiple creative units
  • Multiple web sites

Now, let’s work backwards:

Reaction — How well did the campaign drive sales ?

The campaign delivered +22% sales lift among those exposed to the ads.

How do we know this? The digital ads were tagged, and sales lift was measured via off-line purchase panels among those people exposed to the ads versus those not exposed.

This looked like a huge victory: what’s not to like about a +22% sales lift ? Let the celebration begin…

Reach — How well did the campaign reach males, aged 21-29?

Of the 100 million impressions delivered, only 60 million hit the target. So, 40 million impressions hit women, or men older than 29, teens, or some other group other than males aged 21-29. Obviously, the campaign was not well targeted. In my experience, this is the norm, and not an exceptional case.

But the campaign also wasn’t well planned: the reach was <10% and the frequency was 50+. Most consumers exposed to the campaign were almost certainly exposed way too much. And way too few target consumers were not exposed at all.

This kind of data is available now on a daily basis. Now, if it was just before halftime and you were coach, what would you do with numbers like these ?

Resonance — How well did the advertising break-thru and change consumer attitudes ?

Overall, the campaign performed slightly above norm. Ad recall was well above norm and branding was generally solid–good news and consistent with the sales results.

However, performance varied tremendously across creative formats, creative units and web sites. On-line video performed best, followed by rich media and banner ads. Of the 10 creative units, 3 performed well below norm. And of the 8 web sites, 2 performed well below norm.

Now, if was the end of the 3rd quarter, and your we looking at results like the above, what would you do ? Most likely, you’d move spending out of low performing ads, ad formats and sites, and reallocate them to higher performing ones.

Optimizing Advertising Performance “In Game”

It’s clear in hindsight that the campaign wasn’t optimized. The campaign clearly drove a sizable sales lift among those people exposed to it. If the client had measured results in flight and made adjustments along the way, the sales lift would have been higher, and among a much larger group of target consumers.

As the example above illustrates, it’s not enough to  just measure the sales lift of the advertising. This is like measuring the game’s outcome, without coaching throughout the game.

There are other important factors which are critical for you as the advertising “coach” to do to optimize advertising performance in-game:

  • Understand whether you are reaching the right consumer with the right reach and frequency.
  • Make sure that your campaign breaks thru and changes consumer opinions–across all creative units and all sites.
  • Measure all of the above in flight, in real-time, so you can asses what’s happening and quickly make decisions to change your plan to optimize the campaign and generate the best possible result.

So, what are you waiting for? Don’t be like many advertisers and be content to simply measure the final ROI score. Or, just take Yogi Berra’s famous advice to constantly coach, adjust and optimize during the game, because:

“It ain’t over till it’s over.”

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