How do we prioritize media vehicles by cost/effectiveness ?
The media vehicle evaluation step in the media planning process is one of the most controversial step, at least from the experience I had talking about it to my peers. It’s also one of the easiest one to address, so here I am again.
We usually start the conversation with a bit of a problem. First, measurements of media exposures are not available for every media class. Second, it is very difficult to compare media as diverse as outdoor posters and direct mail. Comparing old and new media — television with the Internet, for instance, is even more difficult yet.
These comparisons are difficult, but the criteria for evaluating the cost/effectiveness doesn’t really change across media classes. The basics come from the Advertising Research Foundation model, back in 1961 (which I spoke about in another article), in which media effectiveness is evaluated in terms of media distribution, audience size, advertising exposure, advertising perception, advertising communication, and advertising response.
My suggestion is that media planners may effectively evaluate alternative media vehicles using a much simple, modified, cost per thousand (CPM):
CPM evaluates the cost of message distribution by considering how much money it takes to purchase 1,000 advertisement exposure opportunities. A better CPM would be to take into consideration the cost of purchasing 1000 target market exposure opportunities, which we will call CPM(tm). An even more useful index would be to estimate the cost of actually creating 1000 effective advertising exposures, which we will call the CPM(etm).
If M represents the media audience in thousands, T the target market (also in thousands), T∩M would represent the intersection of the two, or the target audience. So for example, the LinkedIn media audience is 756 million members. My target market are business owners based in London (UK), so the T∩M of this target on the LinkedIn media would be : 140,000 members.
Let’s also use p(e|m) to represent the probability that a given individual, e, has been effectively exposed to the advertising message, given that s/he is also a member of the media audience (event m). The measure of the media vehicle efficiency would then be :
So you see, it’s not a particularly complex demand. Media planners must estimate the size of their audience, and better if possible the size of their target market audience. The media suppliers usually work really hard to give the planners this information. And of course, on the internet, it’s a lot easier to get accurate audience data.
Of all the data required for the analysis of our CPM(etm), the probability p(e|m) is the most problematic. Media planners tend to disagree with comparing a direct mail campaign, for example, where the CPM(etm) may be $1,000, with a mass media campaign where the CPM(Etm) may be below $10. My response is that this value should be kept in it’s lane, and be used only to compare media vehicles within a given class.
Consumers vary dramatically in how they respond to different kinds of media exposure. Outdoor advertising exposures may be inexpensive, but they are ineffective for eliciting consumer purchase responses in most situations. This makes direct mail much more cost/effective. The same is true for the Internet. The fact that CPM(etm) for Internet campaigns might be higher than for mass media campaigns does not suggest that mass media are more efficient. The objectives are usually quite different, and need to be kept into consideration.
Thanks for reading
Yacine Daoud.
