Reach vs Reach Efficiency


The main factor in terms of a campaign’s reach efficiency is sites’ ability to serve and optimize ads effectively.

Reach have always been a critical goal for advertisers. Reach is how many unique persons are exposed to an ad. 

According to an analysis of Nielsen Online Campaign Ratings data in 2014, 59 percent of ad impressions served across all consumer segments reach their intended audience—down from 69 percent in 2013. Which correlates with a shift toward narrower, more focused campaign audiences from broader demographic segments, according to Nielsen. But this on-target delivery decrease is only part of the story. Let´s look at Nielsens evaluation of reach efficiency:

Reach efficiency refers to how efficiently a campaign and its individual media partners reach unique audiences within a specific demographic group given a set level of gross rating points (GRPs)

Despite having similar parameters and goals, campaigns can perform differently based on the sites they’re served on. The main factor in terms of a campaign’s reach efficiency is these sites’ ability to serve and optimize ads effectively. Keeping this idea in mind is critical for advertisers to understand whether Reach goals are met and which sites are contributing the most to this goal.

When it comes to creating a media plan, bigger does not necessarily mean better—especially when deciding which publishers will deliver Reach most efficiently. While the size of a publisher’s audience is an important factor, publishers need to be able to control their ability to reach a broad enough set of people during the life of the campaign using marketing tactics and frequency capping.

The 5 most popular figures among US teens are all YouTube stars.

That´s right. Not Seth Rogen or Katy Perry. 

YouTube stars are more popular than mainstream celebrities among 13-18 US teens. 

These have close to zero exposure in the mainstream media. 

"Drilling deeper into the survey, Sehdev found that YouTube stars scored significantly higher than traditional celebrities across a range of characteristics considered to have the highest correlation to influencing purchases among teens. YouTubers were judged to be more engaging, extraordinary and relatable than mainstream stars, who were rated as being smarter and more reliable. In terms of sex appeal, the two types of celebs finished just about even.

Looking at survey comments and feedback, teens enjoy an intimate and authentic experience with YouTube celebrities, who aren’t subject to image strategies carefully orchestrated by PR pros. Teens also say they appreciate YouTube stars’ more candid sense of humor, lack of filter and risk-taking spirit, behaviors often curbed by Hollywood handlers."

The full story

You have to follow the consumer

"You have to follow the consumer, who has all the power," said P&G Global Brand Building Officer Marc Pritchard. "We're trying to make sure our content is really tailored toward the brand promise and the people find it interesting as opposed to creating the entertainment content we did in the past," he said.

Read more 

True - but you also need to lead. And that´s where most brands fail

The emperor that is native advertising might not be naked, but he’s almost certainly only wearing a thong.

Please read this article by CEO Tony Haile of Chartbeat, where this title is stolen from. It talks about the myths of the effect of focusing on clicks on the web: People don´t read what they click on. His out to sell but anyway here´s my comments:

Advertising on sites with content people visit but no one is reading is a waste of time and money. 

It´s all about quality, not "click tactics". The key for effect is having content that people spend time on consuming. Why? Let´s look at some of the results from the research.

1. The quality of the content on the site you´re having a banner is what it´s all about. Someone who is looking at the page for 20 seconds are 20-30% more likely to recall that ad afterwards. Throw in the fact that a user who spends more than 3 minutes is twice as likely to return vs 1 minute spent on the site – quality is key for a media site. 

2. Native Advertising, which I honestly do not think is that much different from Content marketing, is what media companies are turning to, to increase both quality of user experience and effect of brand advertising. But the research done by Tony implies that the quality and/or relevance of the advertisers content is not good enough. Exactly as with TV ads. If you don´t connect with the quality of the story, the effect will plummet.  

3. Social sharing is not the key metric for how engaging a piece of content is or in other words how much time people spend on the content. But the title, topic or domain itself might be looked upon as of social value – a social currency – that tells something important about, in the eyes of, the person sharing it. But the value of advertising on this particular content page is not as effective as on a page that people spend more time on – but share less. Would be interesting to find some research about effect vs investment based on these two page scenarios. 

"We looked at 10,000 socially-shared articles and found that there is no relationship whatsoever between the amount a piece of content is shared and the amount of attention an average reader will give that content."

It´s all about the quality of the storytelling to gain brand growth, assuming that the product/service itself delivers on its promise. And quality of the content on the sites where these brand stories are paid for penetration purposes. Its´about time media companies and advertisers on the web fully embraces this fact because this is the fundamental understanding required for increasing the quality of user experiences on the web that will make the world better not only for media companies and advertisers in the form of growth – but all of us.  

Storytelling is key. 

What makes a brand grow.

Facebook vs Advertising

Tell your agency the following


"We need to redefine marketing." CMO, General Mills:

"What are some digital opportunities for packaged food brands?"

"The first one is to really redefine marketing. What I think digital allows you to do is to go back to the original definition of marketing, which really wasn't just advertising. It was really about finding markets, defining them, developing a brand that could deliver something differential and superior for them."

Read the full interview here. 

What makes a brand grow.

There´s a lot of discussions and concerns being raised in the era of big data in regards to worries about increased short term activation.

It´s crucial for growth to balance short term activation and long term branding activities. What we also see is that there´s a need to better align short vs long when it comes to increasing both conversion and penetration. This is not only a strategy choice when it comes to balancing these but also a need to balance the choice of channels for the marketing activities. 

Short term shows best effect towards local customer base  - and this means it ignores penetration. Which is crucial for growth. Penetration results in bigger payback. It´s more important to increase penetration than to improve the efficiency of the marketing activities. Short term becomes much more efficient if the brand has strong long term branding activities. Due to priming. Thats what really increases efficiency. Emotional priming is key for growth!

When it comes to communication goals - mental availability is key to measure. Fame = becoming part of culture. (Social amplifications, herd effects etc) The bigger growth in this KPI - the bigger the return of the investment in the marketing activities. 

Long term branding done well increases most constructive performance metrics in the long run 6 months - 3 years. While Short therm activation marketing activities is focused on behavioral conversions and performs better in the... short term than long term branding activities when measured. But they MUST co-exisit in the right balance when it comes to investment in marketing for the brand to grow - from day one. 

Read more about it from P. Field and L. Binets excellent researched:

Earned, Owned and Paid Media

"While health care marketers may have once relied upon placing a print ad in a magazine, playing a video about their practice on the television in their waiting room or having their savvy PR rep pitch a story about a new medical technology, landing them a sweet spot on page four of the local newspaper, those strategies by themselves were good until the digital revolution took full effect.

These days, earned media is a blog post from a New York Timesjournalist about a surprising medical breakthrough, and owned media is a Pinterest board using a series of photo essays to explain cosmetic medical procedures offered. Paid media is a sponsored tweet introducing a new treatment for arthritis.

Some organizations, including the Rochester Minn.-based Mayo Clinic, have truly embraced the new social versions of earned, owned and paid media. The Mayo Clinic even developed its own health care-focused social media center, the Mayo Clinic Center for Social Media (MCCSM). It also has the most popular medical provider channel on YouTube, more than 485,000 “likes” on Facebook, more than 677,000 followers on Twitter, a news blog, a podcast blog and Sharing Mayo Clinic, a blog that enables patients and employees to tell their Mayo Clinic stories. In addition to tools for its employees and patients, Mayo Clinic also offers a Social Media Residency training program for health care marketers wanting to get a better handle on social media strategy and its applications in health care. Topics range from Twitter chats to how to start and manage a blog.
“With 1.1 billion people on Facebook regularly, with hundreds of millions on Twitter, there are all sorts of conversations about health care, about health care organizations and just about health-related topics that are happening already and it is incumbent upon people who represent health care organizations and work in health care to be part of those online conversations,” says Lee Aase, director of the MCCSM.  “There is huge opportunity for good to come out of that.”
But with privacy concerns such a hot-button issue, why should health care marketers migrate over to these digital channels now? The quick answer is because consumers and potential new patients are already in that space."

Effective?: "Virgin Active has launched a multimillion ad campaign."

Virgin Active has launched a multimillion ad campaign to drive membership sign-ups as it drives its plans to become the "most loved" health club in the UK.

Brian Waring, chief marketing officer of Virgin Active UK said: "We have a bold ambition and that’s to become the most-loved health club in the UK."

I don´t think this multimillion ad campaign will be as effective as it could be. Why?

1. Wrong focus. 

It should be: "We will become the health brand in the UK who loves our customers most."

2. Execution. 

The commercial neither awakes arousal or aspire people to be more active - the latter part which should be their marketing 101 guide to everything they do. Not in general and not at Virgin Active Health Club. It does not place the brand in the hearts of people. And by not getting the brand in early, make it visual frequently shown in the video and spoken at least once it will not influence future propensity to buy the brand. 

But perhaps the social media part of the campaign will do the investment justice... 

The ultimate KPI for Marketing.

Before the answer is revealed let´s have a quick look at the insights from Gurdeep Puri - The Effectiveness Partnership,  and some thoughts based on other research and basis of the LIVE 365 Framework. 

According to Mr Puri "85% of CEOs say that 'getting closer to consumers' is their top priority but only 10% of board level discussions are about Marketing. There is in other words a lack of alignment between Corporate Strategy and Marketing:
  7% of companies always set KPIs clearly for each initiative. 
10% of businesses have core strategic metrics that remain consistent to enable longer term reporting. 
39% of companies believe they are fairly or very effective at measuring ROI. "

These are pretty disturbing naked truths, consider also the findings of Les Binets and Peter Fields in "The Long and the Short of It"  ref short term focus. Marketing needs to step it up and Mr Puri advises on how:

"Think commercial, speak commercial and demonstrate commercial. For marketing to succeed it needs to demonstrate Effectiveness to the CFO. Here´s how to align Corporate Strategy and Marketing:
Define how Marketing will help deliver on revenue and profit goals. 
Then create actions to achieve this.  
Measure effect on attitudes and behaviors, influence across customer journey and impact on financial goals.  
Value of investment in Marketing: Finally analyze, calculate Payback and ROMI. "

How to calculate the value of Marketing actions:
"Payback is the ultimate KPI for marketing. The ultimate measure of Effectiveness. 
Payback is the Net Profit generated due to a marketing action. 
To find Payback  you need to 
1. Estimate value sales through  Econometrics, Area testing or Extrapolation to find the Incremental Sales(IS) due to marketing action 
> IS= Actual sales – Base sales(sales if the marketing action had not happened)
2. Calculate the Incremental Profit(IPC) due  to marketing action 
> IPC= Incremental revenue – Incremental costs
> Incremental Revenue = Estimated value sales – intermediary cash margin (Retailer mark up)
> Incremental costs = Variable cost pr unit (aka cost of production * Incremental units
3. Payback (Net Profit) = Incremental Profit Contribution – Cost of Marketing action. (Do not incl agency fee, only production and media costs.)

1. We found that 3.000.000 extra units sold due to our marketing action (campaign, communication etc)
Average retail price is $2 > Incremental sales value is $6.000.000
2. Retailer margin is 10% (10% of $6.000.000 is $600.000) = Incremental sales revenue is $5.400.000
A variable cost of $0.65 pr unit produced. 3.000.000 * 0.65 = Incremental cost is $1.950.000
$5.400.000 - $1.950.000 = Incremental Profit contribution from sales is $3.450.000 
3. The cost of the marketing action is $1.200.000
$3.450.000 - $1.200.000 = Payback (Net profit) is $2.250.000  (ROMI 2.250.000/1.200.000= 1.88)

ROMI is the ratio of Net Profit generated divided by Cost of Marketing action. But it´s just a measure of efficiency of media allocation and not Marketing Effectiveness. ROMI is  NOT a indicator of marketing success."

Much of Gurdeep Puri´s conclusions are entirely consistent with the viewpoint put forward by @ LIVE 365 when setting up our developed 365 Marketing Dashboard for brands - which is a strategic and operational scorecard on business, communication and tactical level that enables brands to measure 365 days a year how well they perform and provides evidence-based recommendations on how to improve performance.  

We also could not agree more about the importance of Marketing to be seen upon as an commercial investment and not a cost on the balance sheet.  To achieve this we need to avoid marketing myths, causality studies/findings in our marketing efforts and start documenting the results properly. 

Ground-breaking research on Social Media

Recently a book, that I highly recommend to marketers, was published: Viral Marketing – The Science of Sharing by Dr Karen Nielson-Field who used research from more than 2 years of work, 5 different data sets, 1000 videos, 9 individual studies and a large team of researchers from Ehrenberg – Bass Institute for Marketing Science. 

Here are some findings/summary and a question to the author at the end. 

A study found a 14% increase in the number of people who enjoyed a video following a recommendation vs those who had discovered it by browsing. 
- The study also found that when a viewer enjoys a video, they are 97% more likely to purchase the product featured in it. 

Generating arousal is key to achieve sharing success. 
- Videos that evoke feelings of exhilaration tends to be more shared than any other high arousal positive emotion. 
- Most videos are falling short on this.
- Videos, on average, that elicit high-arousal emotions gain twice as much sharing  as those that elicit low-arousal emotions; yet more than 70% of all commercial videos evoke low-arousal emotions. 

Focus less on creative appeal and more on emotional appeal.
- Knowing what emotional responses to go for improves your potential return, but not your risk. The right sort of emotional response should be best considered a necessary, but not sufficient, condition for a video to be a viral superstar. 

 • No single creative device i.e babies, kittens, dogs, celebrity etc, is more or less likely to elicit a high-arousal emotional response than a low-arousal response, or vice versa, from its audience. 
- Creative devices like babies, kittens, dogs, celebrity etc do not appear to work any better than other creative devices at gaining higher rates of sharing. Babies do outperform many other creative devices, but only when the video evokes high-arousal emotions. (and many don´t…)
- But of all possible creative devices, videos that display personal triumph appear most likely to deliver sharing success. Followed by science/nature/weather. 
- So no need to focus on having a  baby, dog or celebrity in they video. Instead invest in pre-testing to ensure the material makes the viewer laugh, gasp or get goose pimples. 

Contrary to popular belief the brand is not the enemy. 
- No relationship is evident between how much sharing a video achieves and the level of branding executed. 
- High-arousal positive videos display more branding than the other groups, yet still share the most. 
- The level of branding present has no effect on the degree to which a video will arouse viewers. 
- You will throw money out the window if you do not:
1. Get the brand in early. 90% watch only the first 10 seconds. 
2. Make sure the brand is visually frequently shown in the video. 
3. Make sure the brand is verbally spoken at least once. 
Otherwise the video will not influence future propensity to buy the brand. 

More than 90% of viewers don´t share. 
- The large majority of videos have a reproduction rate that is lower than 1 (where 1 means that every person who views it shares it with another person; that is, 1:1). Viral growth is a function of both time and this rate of reproduction. The closer the reproduction rate is to 1, the slower the rate of decay. 
- When a video starts with a larger pool of seeds, the gains in absolute earned reach will outweigh the associated costs. 
- Even for a video that shares really well, there are far more earned views when the brand starts with a large seeded audience. 
- Views that result from personal recommendations, i.e a Facebook post by a friend, have a much higher share rate than views that do not i.e discovering a video while browsing. 
- The effect of popularity on engagement(incl sharing) peaks in the first three to seven days of a video´s life. 
- Less contagious videos can be winners, too (if they are well seeded or supported), is´s all in the interpretation of success…
- Videos that are shared more than we would expect given the size of their audience evoke high-arousal emotions and exhibit creative that involves personal triumph. 
- Video content needs to be widely viewed in order to simply gain an average amount of sharing. (A virtuoso playing a violin in her bathroom may be fabulous but cannot be widely appreciated.)

It is important to get seen, it´s equally important to be remembered.
- Advertising works by refreshing and building memory structures that are linked to the brand. 
- Memory cues make it easy, as most customers are light buyers, for the brand to be thought of and noticed at the critical time of purchase. 
- Advertising needs two critical elements to be remembered: being well branded and getting noticed. 
- Videos that evoke high-arousal emotions are most remembered. They are remembered around three times more than videos of low arousing content. 
- Arousal is about getting some additional reach, but it is also about being remembered. Views alone can´t do this. Regardless of how many views an advertisement achieves, if it is poorly remembered it is ineffective. Even if your creative can be recalled and it has a high level of views, the advertisement is still ineffective if the brand is misattributed to your competitor. The brand must be prominent and easy to identify. 
- BrainJuicer´s FaceTrace™, a facial detection measure spanning seven core emotions, study suggest that their "Emotion-Into-Action" score was a superior predictor of IPA Effectiveness Award winners compared with other common pre-testing metrics.
- Single-source data is the gold standard for measuring advertising effects. 

Reach is important, but it needs to be quality reach to achieve maintenance and growth. 
- Video sharing is not driven by brand love. 
- While the Pareto Law is widely applied "rule of thumb", it is misleading. It is actually the light buyers who are the most valuable for brand growth. 
-  NBD (Negative binomial distribution) tells us that as a brand grow it achieves higher market penetration and higher average purchase rates., but the shape of the distribution ALWAYS stays same. The bulk of change is seen among the brand´s very many light buyers and non-buyers. Light buyers contribute to the bulk of brand growth. 
- Gaining many more buyers is key to brand growth, even though most of them buy infrequently. To do this, advertising must reach large numbers of light buyers = quality reach. 
- Facebook fan pages consists of mostly heavy and moderate buyers and are inefficient at providing vast reach to customers that are most fundamental for brand growth. 
- Brands should be wary of over-investing in the relatively small numbers of already heavy buyers who typically congregate around online brand communities. 

Question: Would it not be effective to use fans/heavy buyers as door openers for content like social videos? Considering the Unruly study showing that views that result from personal recommendations, i.e a Facebook post by a friend, have a much higher share rate than views that do not i.e discovering a video while browsing/banner/editorial etc. A heavy buyer have light buyers as friends plus at the same time these friends would be more likely to share the video on to their networks again. 

PS. Let me be the first in line to express how grateful I am of the research done and published by Ehrenberg-Bass Institute in Australia. The work is important for marketers working with the aim of placing brands in the hearts and minds of people.