Putting the “measured” in unmeasured media

February 2, 2009

Putting the “measured” in unmeasured media
By Tony Palazzo

I bet no one was surprised when Credit Suisse lowered its 2009 earnings estimates for media companies at the beginning of the year. After all, ad spend is predicted to drop 8% this year, down a further 4% from earlier forecasts. But before media companies and agencies alike run screaming, let’s remember what these projections are based on: measured media, e.g., TV, radio, print, billboards, etc. In reality, “measured media” makes up only 60% of ad spend; the other 40% includes direct marketing, events, promotions, coupons, catalogs, product placement and unmeasured forms of internet media (such as paid search).¹

So what if the drop in media spend is not just a drop–but it also linked to a shift from measured to unmeasured media? Back in 2005, when the economy was healthy, Merrill Lynch noted that a decline in ad spend could shift to media “not being captured in our overall estimates of marketing expenditures²." If budgets were shifting during the good times, I’m willing to project a shift to lower cost, unmeasured media during the present financial crisis. Consistent with this hypothesis, one third of marketers who responded to a survey about 2009 marketing expenditures by the Association of National Advertisers last fall said that this year their spending would remain flat, but that their allocation to varying media would shift.

While all of this talk of reallocating may sound good to experiential marketing and other nontraditional agencies, CMO’s probably aren’t sleeping any better. “Unmeasured” implies risky investment; how do you justify spend if you have nothing to measure it against? Or worse, CMO’s end up looking at program reports that force traditional ROI measures onto their non-traditional marketing spend–only to find less than spectacular results. For example, when they don’t see an immediate post-event sales spike, it reconfirms their sneaking suspicion that lesser understood forms of media also underperform. Few appreciate that the return on experiential marketing (in terms of sales) could come three months after the event, and that deeper impressions often generate word of mouth impact that far outreaches number of exposures. (To read more about this, check out online white paper: It’s about (quality) time: Experiential ROI.)

One of our missions is to put “measured” into the “unmeasured”. Jack Morton has a measurement platform, nGauge, that takes uncertainty out of the experiential marketing equation--ensuring a sound marketing investment. The inspiration behind nGauge is to set a program up to win before it begins, instead of waiting for some form of post-event data (which then is used to point fingers when results aren’t great). During the planning stages of a program, we provide a measurement plan that incorporates a system of Key Performance Indicators (KPIs). Our KPI system is built on quantifying Return On Objectives (ROO), emphasizing return in terms of how much you’ve performed above expectations–and not just determining if you sold more than you spent. Because we’ve been collecting pre- and post-event survey data for several years, we use our industry benchmarks to determine target audience response rates. The key word is benchmark.

It’s one thing to have experiential program objectives, such as driving awareness, but how often are those objectives put against benchmarks? Unfortunately, when it comes to setting program performance measures, planners are usually left on the bench waiting for the marks at the end. We say “Get off the bench and get on your marks!” Here is our 10 step KPI program to get you on your marks:

Part 1: Valuate Objectives

List objectives
List program elements
Weight how well elements align with objectives
Calculate an average score for each element across all objectives: what is the overall value of each element in terms of meeting objectives? What is the value of each objective in terms of the elements?

Part 2: Set Targets

Set target audience performance rates, based on proprietary Jack Morton database

Part 3: Measure

Track actual performance (survey responses, # of attendees, media impressions, etc.)
Compare the difference between target and actual response

Part 4: Score

Multiply the difference between target and acutal results by the value established in Part 1
Determine how much program grew the value of each element
Determine how much program grew the value of each objective

If you implement these steps, congratulations! You now have a baseline to compare future programs against–you are on your marks. Going forward, you can use the highest of these scores as a benchmark against any program with KPI’s, regardless of objectives or program elements. The point is to continue using KPI’s so that your programs get out of that amorphous “unmeasured” category–where the benchwarmers sit–and into a consistently meaured system. On your marks, set, go!

Tony Palazzo is VP, Director of Analytics and Accountability at Jack Morton. Email him to find out more about nGauge and our measurement capabilities.

¹ Crain’s New York. Analyst pessimistic on ad spending. January 18, 2009.

² Ad Age Data Center. 2008.