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Market Voice 7 Jun 2022 - 3 min read

Impressions, clicks and ‘engagement’ are failing metrics: Here’s how to maximise ROI, ad impact through quality, people-based data

By Jonathan Betts - Executive Director, Commercial Growth and Product Strategy, Nielsen | Partner Content

Improving people’s exposure to your advertising is a less binary affair than simply increasing it.

Anyone can improve return on investment – just spend less. But that in turn hits sales. Improving the effectiveness of ads should be the focus for agencies and clients, Nielsen’s Jonathan Betts writes. It’s important to avoid hazy metrics like impressions, clicks and “engagement”, and focus on impact.

Across the advertising industry, there are teams of people working to link advertisers, agencies and media owners and maximise the effectiveness of ad budgets and impact of ads.

It sounds difficult, but the solution is surprisingly simple. If you want to maximise the return on investment (ROI) of your advertising spend, you need to increase and improve the exposure that existing and potential category buyers have to your ads.

That’s why Nielsen created Digital Ad Ratings (DAR), a tool that allows for the optimisation of exposure to advertising by measuring the number of people exposed to your ads. Advertisers and agencies using Nielsen DAR see more meaningful and compelling metrics to support their people-based marketing efforts.

That means better decisions and the ability to optimise ad campaigns, maximising the business impact of advertising.

It’s generally agreed that getting your ads to more of the right people increases the impact. It passes the pub test.

But it’s also backed by the experts. Binet & Field, authors of Media in Focus: Marketing effectiveness in the digital era, Byron Sharp of How Brands Grow fame, and John Philip Jones from When Ads Work, all emphasise the business impact of increasing the number of people exposed to your advertising.

Improving people’s exposure to your advertising is a less binary affair than simply increasing it (when people have either seen it or they haven’t). This is where the alchemy of creative, attention, relevance and context work together, all contributing to the impact of the advertising.

Every brand – large or small – wants to increase the effectiveness of their advertising. The simplest, most effective way to do that is by improving both the number of people who see your ads, as well as the quality of that exposure. It’s not a chicken or egg situation – you need both.

That’s why Nielsen DAR is a vital tool to increase the number of people exposed to advertising. Our clients are always learning how many people have been exposed to their digital advertising, how often those audiences have been exposed, and their age and gender profile.

This data is available daily for real time reporting and provides the widest possible coverage of digital advertising activity, including measurement within Google and Meta, and the open web.

It’s the ultimate tool. Nielsen DAR provides reporting on how many people have been reached by each site and the total for the campaign.

Likewise, it’s an essential planning tool for clients, letting them select the best media suppliers for their campaigns and allowing them to set efficient campaign budgets with minimal effort.

Using people-based metrics when planning and reporting on advertising campaigns helps to overcome the complexity that can trap new players. Because we seek to influence people’s attitudes and behaviours with our advertising, making people a core part of our reporting ensures we avoid advertising delivery metrics like impressions, dangerously misleading metrics like clicks and mystifying metrics like “engagement”.

Maximising the effectiveness of advertising is not the same as chasing efficiency. To be specific, DAR helps maximise the impact of your advertising - increasing the volume and value of the sales delivered by the advertising you run.

ROI is an efficiency measure of the ratio of sales value to advertising expenditure. An ROI of 2:1 can be achieved whether we have invested $100,000 or $1,000,000. However, the sales impact, i.e. the effectiveness of the advertising, is very different. The danger with a laser focus on ROI is that the easiest way to improve it is to spend less on advertising, therefore decreasing the sales impact from the advertising.

When you focus on maximising your advertising budget to deliver on your target ROI, you are truly maximising the impact of your advertising and increasing the number of people exposed to your advertising is proven to have this effect.

Nielsen shapes the world’s media and content as a global leader in audience measurement, data and analytics. Through our understanding of people and their behaviours across all channels and platforms, we empower our clients with independent and actionable intelligence so they can connect and engage with their audiences—now and into the future.
 

An S&P 500 company, Nielsen (NYSE: NLSN) operates around the world in more than 55 countries. Learn more at www.nielsen.com or www.nielsen.com/investors and connect with us on social media.

 

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