January 25, 2023
Commentary
On-Target Versus Reach: The Digital World Needs Both To Succeed
- by Andrew Feigenson , Op-Ed Contributor, November 21, 2016
The Enduring Relevance of Reach
A number of important brands have begun to rethink their digital strategy, with a mix of reach and on-target in mind. Even digital-originated brands are increasingly investing ad dollars on traditional media in order to attain greater reach and create scale.
Over the past two years, the 10 largest digital-originated brands advertising on TV and radio have increased their spend on these platforms by an average of 318%. These brands range from established ecommerce giants to mobile gaming upstarts that have seen meteoric growth. But regardless of sector, they have all invested in reach as a way to reach consumers and increase brand awareness.
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Acknowledging Value Beyond On-Target
Ratings for digital audiences have allowed the industry to engage in a healthy discussion about on-target rates and whether buyers should pay for inventory delivered outside of a target age and gender. Some have even questioned whether Gross Rating Points (GRPs) should still apply in a world where you “actually know” who people are.
But at its core, the GRP is remains the measure that tells advertisers what they want to know most: how many people see the ad and how often. In other words, reach and frequency.
For years, the ROI from GRPs on television used to be highly predictable. Today, there are many more questions around ROI. TV remains relatively straightforward, because of its limited ad formats - all video and typically 15- and 30-second spots. The digital world, on the other hand, is much more complex and offers dizzying variations of tactics. For example, a full screen video may have more impact than a banner ad and a precisely segmented impression may have better immediate outcome than an unsegmented one.
Still, even as capabilities to define who sees a message and where it finds them have become more advanced, we’ve seen an enduring truth: There is often value in advertising to people who fall outside of a target. Let’s not forget - they buy stuff and influence others. So, even if those segments are less effective recipients of a campaign than the primary target, they still yield important value.
Redirecting the Conversation
The prospect of widespread dynamic advertising is incredibly exciting for the industry, especially when evaluated across the widening array of potential ways to connect with consumers. But regardless of the tactic every advertisement has a potential audience, an actual audience, an effectiveness and a cost.
The right combination of the broad reach at the top of the funnel and sales amplifiers that effectively targeting the lower funnel will vary for brands depending on their objectives and sectors. But there’s no question that balancing this mix will be one of the most important challenges for all advertisers going forward.
While there has long been a perception in digital that advertisers need to react to a million individual desires, brands are built by creating a million similar desires. There is still a need for common cultural narratives and a long view that drives sales today in addition to building customer loyalty for the future.
Whether you are looking to build or maintain a brand, reach is essential.
It’s time for us to redirect the conversation, moving away from considering on-target as a key performance indicator and instead gain a clearer understanding of how reach and frequency of campaigns impact the effectiveness of ads presented to a broader audience.
5 comments about "On-Target Versus Reach: The Digital World Needs Both To Succeed".
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Andrew, I agree with your basic point about reach being important, not just selective targeting. I'm aftraid that some of our digital friends may misconstrue your message, however. While digital media can, often---though not always---find ways to target a certain number of users---or likely users--- of many products and services, they can not offer complete reach, or anything close to it of said targets thanks to fragmented audiences, fraud and ad blockers. So, it's not a matter of expanding your sights, to include less likely prospects with TV and other media, it's a matter of reaching many more of your prime prospects than digital media alone can deliver.
A small point regarding reach and frequency for legacy media. Such projections do not tell advertisers how many people they are reachong and how often. At best, they tell advertisers how many people might have had a chance to see/hear their ad and how often this might have happened. For example a TV buy may generate a monthly reach of 65% and an average frequency of 3.5, but, in reality, this probably translates into a 50% ad reach with an average frequency of 2.5, when you account for inflated viewing data, viewers leaving the room and not paying any attention, etc.
Andrew? Do I have permission to pinch your fishing to feed a village analogy - I love it.
Ed, you are riggt regarding ad-reach. We have a loose rule of thumb here in Australia, to plan the TV component of the campaign based on programme ratings and use the GRPs = 1+ Reach * Average Frequency. We then discount the Programme GRPs by a factor to take in ad-break ratings, demos, programme types etc (generally based on the history of ad-break reach of receny buys). We then rework the GRP equation.
As an example (data made up). 250 programme GRPs may have delivered 68% reach at an average frequency of 3.67. Post-analysis may show we lose 20% of the programme GRPs in the ad-breaks. So therefore if the average frequency held at 3.67 and we only has 200 ad-break GRPs then the 1+ reach would be 54%. It would be unlikely that the frequency would be unchanged so we might use 3.5 frequency which gives 57% 1+ reach. It sorta works well!
John, I use a somewhat different method to estimate ad reach in my consulting activities. To begin with, I discount Nielsen's average commercial minute ratings by about 40-45%, thus reducing the GRPs. This takes into account the difference between average commercial and commercial minute ratings as Nielsen calculates them. More important, I factor in the likliehood that about 8-10% of the "viewers" aren't even in the room while others are totally distracted. As for reach, I use a frequency distribution, based on the original, unadjusted GRPs and their supposed reach. Typically, 15 points out of a 60 reach will have been "exposed" on;ly once. Since only half of these people were actually reached by the ad, I deduct 7.7 reach points as not reached. The same thing is done with those "exposed" twice and three times, using random duplication assumptions , etc. netting me a very realistic "real world" estimate when i sumup all of my deductions and delete them. My new reach estimate is then combined with my adjusted GRPs to stimate average frequency---which, as you can see, is always lower than the traditional calculation.
Ed and John,
Thanks for your comments. You are clearly very well versed in this area!
I'd add that there is a key element underlying your comments - consistency.
You have both devised mechanisms for arriving at a reach/frequency number with which you are comfortable. Other people might arrive at it in a different way or even accept the core numbers straight-up. But, regardless of the methodology you or these other people prefer, you've had an ability to test and refine your numbers over time and, based on this experience, to become predictive.
When it comes to reach/frequency on targeted audience, the industry still lacks some degree of consistency or predictability. It isn't for lack of desire or talent (we are blessed by a talented set of people in digital media). The problem is the speed with which consumer habits and technologies change, making it tough to predict tomorrow, based ontoday --- and making it hard to create models like you have done for broadcast media.
Just wanted to share this one thought, to keep the dialogue going.
Ed, I agree with your method.
I don't adjust for "out of room", because when I look at the elemental data I see a drop of around 8% during ad-breaks already (i.e. people push their button probably more than we think they do).
While agree that people not paying attention to ads is important, that is not really the fault of the broadcaster but primarily of the creative. Poor media placement can also be an issue - but as the adage goes, no amount of media spend can fix a bad ad, but a bad media buy can destroy a good ad. So if a client agrees to spend good media money on cheap/bad creative ... who signed off on it?
But purely from a pragmatic viewpoint, here in Australia we post-analyse for the client based on the ad-minute (even though on an 'attention-base' it is inflated), so I like to adjust the programme rating down to an estimated ad-break rating as the core of the buy. The issue is that the broadcasters still trade on the programme rating (it's not their fault bad ads don't rate and in fact drag down the programme rating which is based on start/end averages) so there are virtually two currencies in play at the same time based on the same data set.