Media Matters goes beyond simply reporting on current trends and hot topics to get to the heart of media, advertising and marketing issues with insightful analyses and critiques that help create a perspective on industry buzz throughout the year. It's a must-read supplement to our research annuals.
A recent article in MediaPost ("Study Finds Industry Need for Professional Development") revealed advertisers--and to a lesser degree, agencies--see an urgent "need to invest in training their organizations for data science, analytics and modeling." However, both advertisers and agencies felt less hard-pressed to train their staffs in strategic thinking, media research and media planning/buying. This is unfortunate, given the sheer masses of data—much of which is promotional in nature or derived through questionable methodologies—that flood the industry. Without a framework to evaluate the quality of data one uses, or the ability to apply data (and common sense) to real-world campaign planning, media research feels like a shot in the dark. To put it another way, much effort is made when crafting a campaign’s message and individual ads, but an equal amount of attention is rarely put into how that campaign will actually reach consumers and the factors that might mitigate exposure. Even the best ad in the world can’t get its message across if it doesn’t reach people.
For decades, Media Dynamics, Inc. has presented a voice of reason to a frenetic and often overloaded media industry. Cutting through the hype and hyperbole, we have sought to explain why media research matters and how it can be applied to real-world campaign planning. A case in point is the following article, “Hey Advertisers, What’s Your Real Reach & Frequency?” which discusses ad exposure beyond the theoretical opportunity to see. It’s just a sample of our research and analyses, all of which are now available through our new MDI Direct service. From the basics to deep dives into complex issues, it’s like having an on-demand media research department at your fingertips.
Advertisers—who pay scant attention to what media audience stats actually mean—have become accustomed to media plans indicating that they are reaching lots of customers on a frequent basis. The reach projections, particularly for TV, have declined somewhat from the heady pre-fragmentation days of the 1960s and 1970s. However, they are still impressive, with 65-70% a typical monthly estimate.
But is it really true?
What happens when you look at a planned media buy or a total media plan in terms of likely ad noting, not merely the theoretical opportunity to see?
To demonstrate, let’s take a hypothetical national media buy involving a total yearly ad budget of $36.5 million for “Brand X.” The brand’s standard media buying demo is adults 18-49, which is utilized primarily in its participation in the parent corporation’s upfront TV purchases, as well as in its magazine and digital video buys. As shown in Table 1, 69% of Brand X’s dollars go to TV on the broadcast networks, cable and syndication in various dayparts, while magazines get 6% and digital video 25%. The average cost per rating point varies from a low of $21,000 for TV, to $36,000 for digital video. All told, the annual 18-49 GRP totals for this plan add to 1,546, with 1,200 derived from TV (see Table 1).
Of course the GRPs shown in Table 1 are “raw” audience- or “impression”-based and do not account for repeat readings of magazines or ad exposure for all three of these media. So adjustments are needed to bring the “raw” GRPs into line with reality. In the case of TV, its 1,200 annual GRPs, based on Nielsen’s average minute commercial ratings, must be reduced to account for the fact that, on average, 8-10% of the “audience” is not even in the room when the ad airs, while another 35-40% isn’t paying attention. Therefore, we have reduced TV’s 1,200 GRPs down to 660 to reflect probable ad noting.
In the case of magazines—all monthlies—two factors are at play. The first is additional ad page exposures caused by repeat readings of the issues, which obviously increase the GRP totals. On the other hand, it is unrealistic to assume that page openings equal ad noting. Taking this into account, a reduction is in order. The net result of using both factors is a slight increase in annual GRPs from 96 to 108.
Digital video’s GRPs can also be calculated, assuming a 100% viewability factor, but a reasonable guess is that only 40% of these “exposures” actually result in a user noting the ad. Therefore, digital video’s effective ad viewing GRPs are marked down from the “raw” estimate of 250 per year, to only 100.
Needless to say, Brand X is or should be concerned with the extent of its reach based on likely ad viewings, not potential audience. Table 2 shows how Brand X’s campaign would unfold on an average day, week, month and annually, in terms of effective ad noting and reach. As can be seen, if this were a continuous 52-week effort, rather than a flighted one, Brand X would reach only 2% of all 18-49s per day, 13% per week, and 43% per month. Over the course of a year, however, its probable ad reach would expand into the mid-80s.
To demonstrate how misleading reach estimates are using raw audience data, Table 3 compares Brand X’s estimated reach and average frequency among 18-49s on a monthly basis using raw versus noting adjusted ratings. While the raw projections yield a 62% reach factor among 18-49s, which is quite a comfortable place to be for many brands, in reality only 43% probably sees the brand’s ads over a typical four-week interval. Unfortunately, this more realistic analysis is rarely if ever shown to ad agency clients, including Brand X’s.
Isn’t it about time that media planners explained the realities of audience projections and ad exposure to advertisers, to demonstrate how many “contacts” their ad campaigns actually generate? And once this sinks in and advertisers see how puny many of their “mass reach” media plans actually are, might this not make them more open to a) spending more on advertising and b) varying their media mixes—and, in the case of TV, their network type/daypart selections—to generate more read world ad reach and ad exposures?
We think so.