Media Metrics: A Powerful Predictor
Engagement remains a much debated topic in marketing and media. While some media agencies and researchers have embraced the concept, others believe that the "holy grail" of engagement relates to how consumers experience brands. OMD has conducted several research projects to better understand the nature of media engagement and the impact it has on consumers' attitudes and purchases. We believe that media engagement is strongly related to consumers' response to advertising, and as such, is a powerful metric that can guide smarter media choices and higher advertising ROI.
We recently conducted several separate analyses to better understand how media engagement affects key brand metrics such as brand preference and sales.
In one project, we analyzed cross-sectional data, looking at attitudinal measures of brand engagement, ad engagement and media engagement, and whether these are related to people's stated preferences for particular brands. While we didn't look at sales figures per se, we know that people's opinions about brands often play a role in their purchases.
OMD routinely conducts and supervises tests throughout the year to measure the effectiveness of a client's ads on different media platforms. To explore the interplay between engagement and brand preference, we added standardized questions of brand engagement, ad engagement, and media vehicle engagement to the questionnaire in each cell, as well as a standardized brand preference questions.
We analyzed this data to determine whether the three engagement variables - brand, ad and media - are strong predictors of brand preference.
The strongest predictor of raw brand preference score (that is, what contributes to how much a consumer prefers a brand), is brand engagement, or how strongly consumers feel about particular companies. In other words, if consumers really like McDonald's, they'll report high brand engagement with that brand. Engagement with the brand itself is far more important in explaining raw brand preference than is engagement with the ad or the medium.
However, we also looked at our data a different way. To conduct the test, we showed programs with ads inserted for specific companies to a group of 200 people who watched the shows on a highly engaging new media platform, such as video-on-demand, and then asked them their feelings about the marketers. We showed the same ads and programs to another group of 200 respondents, but these people viewed the shows on a traditional television platform.
When we compared the responses of people who viewed ads on a traditional medium vs. a new platform, we found that, as a group, those who saw the ads on the new, more engaging, platform expressed a stronger preference for the brand than did those who saw the ads on TV.
We examined this increase in preference across the brands to see if the extent of increase in preference is associated with stronger brand, ad or media engagement. Again, we found that the three engagement variables explained the bulk of difference in how much engagement increased across the brands.
In a second project, we added media engagement metrics to marketing mix models for three brands in the financial services category. These models use standard metrics like gross ratings points (GRPs), promotions, mailings, and measures of other marketing tactics to explain sales or related metrics.
To calculate how engaging programs are, we rely on a variety of factors, including whether viewers watch the same shows week after week, how much of the shows they watch, and whether they watch in real time, or record it for later.
We calculated a media engagement index for the programs the brand advertised on and then weighted that figure based on the GRPs delivered by each program. Once we factored in engagement, we saw the same results for all three brands: Media engagement was a significant predictor of sales. Adding engagement improved the overall ROI of advertising by 15 to 20 percent; the relative contribution of other key marketing levers wasn't significantly affected by adding engagement.
Going forward, we believe that the best way to understand the contribution of advertising to sales is to put three advertising metrics (GRPs, media engagement and even ad copy quality) into the original marketing mix model of brand sales. We believe that this approach would produce the truest measurement of ROI, and that all three variables will significantly drive brand sales.
To further understand why engagement is so important, consider how this concept affects the day to day practice of media planning and buying. To use engagement metrics in media planning, one needs to combine them with the other metrics that are currently used, including ratings, CPMs, strategic concerns and other, miscellaneous issues like clutter.
To incorporate engagement, practitioners generally propose that we adjust the measure of the consumer's exposure to an ad for the quality of that exposure. Thus, GRPs or ratings could be multiplied by an engagement factor to produce "EGRPs" or "eRatings."
We looked at how ads performed in two TV shows -- call them Program A and Program B. Both shows enjoy about equal ratings and charge around the same rates for an ad, which isn't surprising, given that ratings are the currency for setting price in the market. But when we consider the "engagement" power of these 2 programs, they look very different; Program B is 35 percent more engaging than Program A.
This means that if an advertiser believes that engaging programs are better environments for their advertising, that advertiser will always prefer Program B to Program A, will always want to run on B, and will probably not want to run ads on A unless he gets a price concession.
It's easy to find other differences of this magnitude, because engagement metrics aren't well correlated to ratings data. And the concept holds true for other media as well. We have seen differences for multimillion dollar ad plans that can be as much as 15-25 percent higher in engagement power by choosing similarly priced programs to maximize engagement.
Engagement metrics have been adopted by several advertisers and agencies today. Believers in engagement use these metrics to guide program selection and drive perceived ad effectiveness. While it's rare in today's market to include engagement metrics in a deal, believers also can use these metrics under the table to guide their choices and to generate an advantage for their brands.
Now that their impact on sales is confirmed, we believe these metrics should be broadly embraced by advertisers and agencies alike.
Sandra Eubank is the U.S. director of research, analytics and insights at OMD (firstname.lastname@example.org); Huw Griffiths is the U.S. director of metrics and brand science at OMD (email@example.com).