MarketingAutomation.net

In this installment of our Mastering the Metrics series, we will define Share of Voice.

Share of voice is a metric that quantifies the presence of a campaign or company in the overall advertising context of a particular market. Ideally, share of voice is calculated using impressions or ratings, but when this data is not available, marketers often use spending figures as a proxy. This metric is used to gauge the relative strength of a campaign within its market.

For this installment of our Mastering the Metrics series, we’ll define Effective Reach.

Effective reach measures an ad’s reach when it is exposed to an audience enough times to be effective, where the ad’s frequency of exposure must be equal to or greater than the effective frequency. We covered effective frequency in our last installment, but in short, it’s the optimal number of exposures needed for an ad to be effective. Therefore, effective frequency is a critical element in this calculation; in standard cases, it is often estimated to be 3.

In this installment of our Mastering the Metrics series, we will cover Frequency Response.

Frequency response refers to the reaction of an audience when it is exposed to an ad. There are several ways of conceptualizing frequency response functions. The three most common models are described below:

1. Linear – The linear model assumes that all impressions have an equal impact. This is a pretty sweeping assumption, so it’s not surprising that this model can be too simplistic for complex products.
2. Threshold – The threshold model suggests that several impressions are required before an audience responds to an ad’s message. This is the most commonly  used model because it offers the best combination of accuracy and simplicity.
3. Learning Curve – The learning curve model argues that an ad starts out having little impact, but gains ground with repeated impressions, finally tapering off after saturation is reached. With so many moving parts, it is difficult to get this calculation exactly right, so this model is not always entirely accurate.

Continuing our Mastering the Metrics series, today we’ll cover Effective Frequency.

Effective frequency refers to the number of times a person must be exposed to an ad before the message sinks in. Underexposure risks being ineffective, while overexposure equals wastage.  The standard figure that marketers use for planning purposes is an effective frequency of 3; however, for optimal accuracy, testing this assumption is probably a good idea.

Effective frequency helps you determine the ideal exposure level for a campaign, such that you’re balancing spending against the risk of ineffectiveness. In other words, you want to maximize the campaign’s impact while spending the least amount possible.

Continuing in our Mastering the Metrics series, today we’ll define Average Frequency.

Average Frequency estimates the average number of times an individual views your ad, with the assumption that the individual has actually seen the ad. Average frequency is useful for gauging an ad’s intensity — that is, how strongly it is focused on a target audience. To calculate average frequency, divide the total number of exposures by the total number of unique individuals who have viewed the ad.

Total Exposures / Audience Members = Average Frequency

In the first installment of this series, we defined impressions and explained their usefulness. A related metric is Cost per Thousand Impressions (CPM), which helps you figure your cost per advertising expenditure. This measurement relates to web traffic and approximates the your cost per thousand ad views (total impressions).

Calculating this metric on a per-thousand basis (rather than expressing the figure as a cost-per-impression) makes more sense because you’re dealing with dollar figures, which are easier to conceptualize when they’re whole (not fractional) dollar amounts. For example, saying you have a CPM of $3 really means that each time the page loads and the ad is viewed, it costs you 0.3 cents ($0.003). It’s just easier to express this concept as CPM of $3.

Advertising Cost / # of Impressions (1000s) = CPM

It’s the perpetual marketer’s conundrum: How do you measure and quantify your activities and the results they produce? I’m reading a great book right now that has a whole chapter dedicated to advertising and web metrics. It breaks the metrics down one by one and describes their uses and significance. I thought it appropriate to share the relevant ones in a series called “Mastering the Metrics.”

METRIC 1: IMPRESSIONS

Impressions are the number of times any given ad is viewed, usually indicated by the number of times the webpage containing the ad has been viewed. These can also be referred to as exposures or opportunities-to-see (OTS). You can calculate total impressions by multiplying the ad’s reach (# of people viewing it) by its frequency (# of times it appears). Keep in mind that this number is not as valuable some other metrics like Cost-Per-Click (which we’ll discuss later); just because someone viewed the webpage doesn’t mean they saw your ad or paid attention to it. Still, calculating the total impressions is one way to measure ad exposure.

Reach * Frequency = Total Impressions

Stay tuned for the next post in our “Mastering the Metrics” series, Metric 2: Cost per Thousand Impressions (CPM). For more tips, check out the full book: Marketing Metrics: 50+ Metrics Every Executive Should Master by Paul W. Farris, Neil T. Bendle, Phillip E. Pfeifer, and David J. Reibstein.

Using marketing automation tools to gain leverage with customers (as detailed in Part 2) is an excellent example of an off-label use of marketing automation. But perhaps the most intriguing story I’ve heard yet is of a marketing automation specialist who lost a client to a competitor. Making use of the keen sleuthing capabilities of their marketing automation tools, the vendor was able to see that shortly after the client left, they started visiting the vendor’s website again. The vendor reached out to the ex-client with an innocuous inquiry as to how their new implementation with the competitor’s product was going, casually mentioning that they’d noticed the ex-customer’s recent visits to the site. As it turns out, the competitor’s product leaves much to be desired, and the ex-client is very dissatisfied. Several months of nurturing later, the original vendor has set up a demo with the old customer, and the prospects of winning them back look very good.

Remember: Marketing automation works great when used as prescribed, but you can maximize your ROI if you get creative with off-label uses of marketing automation tools.

Marketing automation software allows you to track a prospect’s online interactions, including links clicked, how long they spent on each page on your site, which forms they filled out – and which they abandoned (you can even capture that abandoned data) and which emails they opened. This information all comes together to help the sales team form a powerful pitch that is perfectly tailored to the prospect’s needs. Were they interested in widget A or widget B? Which white papers did they download and what does that tell you about the unique challenges they are seeking a solution for?

In addition to this tracking information, users are also getting email alerts when their prospects take action, reports detailing unidentified visitors in the past 24 hours and using new advancements like desktop alerts and mobile applications to keep tabs on their prospects 24-7. All of this data at your fingertips means you know much more about your prospect than they probably know about you. This puts you in a powerful position – one you’re going to use to your advantage during the sales process.

It is important to use this information wisely. Though most people are aware of the ability to track activities online, some people may still be adverse to the idea of being tracked. The first time you call a prospect within a few minutes of them visiting your website, they may brush it off as a coincidence. If you call them within a few minutes every single time they visit your website, they may be a little bit intimidated. It is important to make sure you and your sales team are on the same page about how much is too much.

The exception to this, of course, is when someone requests immediate follow-up, as with a support form or a contact form. In these cases, a fast response time can been seen as impressive. For those moments, marketing automation give you a leg-up by sending you alerts. Some marketing automation systems even incorporate web-to-phone technology that can instantly connect sales and service representatives to incoming prospects by phone as soon as a request is submitted.

As a general rule, simply keep in mind that when calling on prospects you should use your insider knowledge to wow them with a personalized pitch, not scare them by coming on too strong.

Tracking, analyzing and revising your marketing spend strategy can be a tricky process. It’s easy to see how much you’re spending, but it can be hard to see what you’re getting for all that cash. If you can develop a system for tracking your spend and boosting your results, getting that marketing budget will be a lot easier next year. Enter marketing automation.

Track costs on a per-campaign basis. Create an individual campaign for each of your marketing efforts. For example, a trip to a trade show may be one campaign and an email sponsorship may be another. Then, for each campaign, enter the associated cost in your marketing automation solution.

Tag your leads. Now that you know what you’re spending, find out which campaigns are driving the most leads. You can associate your leads with a campaign by tagging your landing pages with the campaign. Each new visitor that converts on the page will carry the associated campaign as the point of origin. Leads that are collected offline, such as at a trade show, can be tagged when they are imported into your database.

Collect the right metrics. Once your campaign data is entered and your leads are tagged, you can start tracking your metrics. To determine the effectiveness of your campaigns, you’ll want to look at a few different numbers:

• Number of new leads per campaign
• Number of qualified leads (usually leads you pass on to sales) per campaign
• Number of opportunities per campaign, or the opportunity value of those leads

Since your prospects are tagged with the appropriate campaign, you can easily create reports that help you produce the above metrics. Your marketing automation system will come with reporting capabilities and can also sync with your CRM for seamless opportunity tracking. Once you know which campaigns are performing the best, use that data to adjust your spend and reduce wasteful spending.