Marketing bán hàng - Chapter 4: Non - Financial metrics

9/18/2015 1 Chapter 4: Non-financial metrics Contents •Product and portfolio management •Pricing strategy •Chanel and retail management •Marketing communication metrics Product & portfolio management 9/18/2015 2 Key metrics • Products ◦ Trial ◦ Repeat volume ◦ Penetration ◦ Volume projection • Customers ◦ Awareness, Attitude, and Usage (AAU) ◦ Customer satisfaction ◦ Recency, Retention rate ◦ Customer profit ◦ Customer Lifetime Value (CLV) ◦ Prospect Lifetime Value Trial, repeat, penetration and volume projection •Purpose: to understand volume projections •Trial rate (%): the percentage of a defined population that purchases or uses a product for the first time in a given period. •First-time triers in period t (#): the number of customers who purchases or use a product or brand for the first time in a given period Trial, repeat, penetration and volume projection • 𝑻𝒓𝒊𝒂𝒍 𝒓𝒂𝒕𝒆 % = 𝐹𝑖𝑟𝑠𝑡 𝑡𝑖𝑚𝑒 𝑡𝑟𝑖𝑒𝑟𝑠 𝑖𝑛 𝑝𝑒𝑟𝑖𝑜𝑑 𝑡(#) 𝑇𝑜𝑡𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 (#) • 𝑷𝒆𝒏𝒆𝒕𝒓𝒂𝒕𝒊𝒐𝒏 𝒕 # = 𝑃𝑒𝑛𝑒𝑡𝑟𝑎𝑡𝑖𝑜𝑛 𝑖𝑛 𝑡 − 1 # ∗ 9/18/2015 3 Volume projection •𝑻𝒐𝒕𝒂𝒍 𝒗𝒐𝒍𝒖𝒎𝒆 # = 𝑇𝑟𝑖𝑎𝑙 𝑣𝑜𝑙𝑢𝑚𝑒 # + 𝑅𝑒𝑝𝑒𝑎𝑡 𝑣𝑜𝑙𝑢𝑚𝑒 # Volume projection •Trial volume: ◦ 𝑻𝒓𝒊𝒂𝒍 𝒗𝒐𝒍𝒖𝒎𝒆 # = 𝑇𝑟𝑖𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 # ∗ 𝑈𝑛𝑖𝑡𝑠 𝑝𝑒𝑟 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒 # ◦ 𝑻𝒓𝒊𝒂𝒍 𝒑𝒐𝒑𝒖𝒍𝒂𝒕𝒊𝒐𝒏 # = 𝑇𝑎𝑟𝑔𝑒𝑡 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 # ∗ 𝐴𝑑𝑗𝑢𝑠𝑡𝑒𝑑 𝑡𝑟𝑖𝑎𝑙 𝑟𝑎𝑡𝑒(%) ◦ 𝑨𝒅𝒋𝒖𝒔𝒕𝒆𝒅 𝒕𝒓𝒊𝒂𝒍 𝒓𝒂𝒕𝒆 % = 𝑇𝑟𝑖𝑎𝑙 𝑟𝑎𝑡𝑒 % ∗ 𝐴𝑤𝑎𝑟𝑒𝑛𝑒𝑠𝑠 % ∗ 𝐴𝐶𝑉(%) Volume projection •Repeat volume: ◦ 𝑹𝒆𝒑𝒆𝒂𝒕 𝒗𝒐𝒍𝒖𝒎𝒆 # = 𝑅𝑒𝑝𝑒𝑎𝑡 𝑏𝑢𝑦𝑒𝑟𝑠 # ∗ 𝑅𝑒𝑝𝑒𝑎𝑡 𝑢𝑛𝑖𝑡 𝑣𝑜𝑙𝑢𝑚𝑒 𝑝𝑒𝑟 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 # ∗ 𝑅𝑒𝑝𝑒𝑎𝑡 𝑜𝑐𝑐𝑎𝑠𝑖𝑜𝑛𝑠(#) ◦ 𝑹𝒆𝒑𝒆𝒂𝒕 𝒃𝒖𝒚𝒆𝒓𝒔 # = 𝑇𝑟𝑖𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 # ∗ 𝑅𝑒𝑝𝑒𝑎𝑡 𝑟𝑎𝑡𝑒(%) 9/18/2015 4 Awareness, Attitudes, and Usage (AAU) •Awareness & Knowledge: ◦ Awareness: the percentage of potential customers or consumers who recognize a given brand. ◦ Knowledge: the percentage of surveyed customers who demonstrate specific knowledge or beliefs about a brand or products. Awareness, Attitudes, and Usage (AAU) •Attitude: A combination of what consumer believe and how strongly they feel about it. ◦ Attitude/Liking/Image ◦ Perceived value for money ◦ Perceived quality/esteem ◦ Intentions ◦ Purchase intentions Awareness, Attitudes, and Usage (AAU) •Usage: A measure of customers’ self-reported behaviors. ◦ Identifying customers’ usage behaviors. 9/18/2015 5 Awareness, Attitudes, and Usage (AAU) •Cautions: ◦ Periodic changes ◦ Customer and non-customer responses ◦ Triangulate customer survey data with sales revenue or other data related to business performance ◦ Separate leading from lagging indicators. Customer satisfaction •Purpose: provides a leading indicator for consumer purchase intentions and loyalty. •Customer satisfaction: The number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals. Customer satisfaction •Cautions: ◦ Response bias from disappointed or angry customer. ◦ Sample selection: satisfaction is calculated based on surveyed customers. ◦ Change in customers’ expectations ◦ Impact of marketing activities changes satisfaction. 9/18/2015 6 Customers, recency, retention •Purpose: to monitor firm performance in attracting and retaining customers. •Customer counts: the number of customers of a firm for a specified time period. •Recency: the length of time since a customer’s last purchase. •Retention rate: the ratio od the number of retained customers to the number at risk. Customers, recency, retention •Cautions: ◦ Defining the customer properly is critical. ◦ Not all customers are the same ◦ Where is the customer. ◦ Who is the customer Customer profit •Purpose: to identify the profitability of individual customers. •Customer profitability: the difference between the revenues earned from and the costs associated with the customer relationship during a specified period. •Customers: individual or group. 9/18/2015 7 Customer Lifetime Value •Purpose: to assess the value of each customer •Customer Lifetime Value (CLV): the present value of the future cash flows attributed to the customer relationship. Customer Lifetime Value •𝑪𝑳𝑽 $ = 𝑀𝑎𝑟𝑔𝑖𝑛 $ ∗ 𝑅𝑒𝑡𝑒𝑛𝑡𝑖𝑜𝑛 𝑟𝑎𝑡𝑒 (%) 1+𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑟𝑎𝑡𝑒 % −𝑅𝑒𝑡𝑒𝑛𝑡𝑖𝑜𝑛 𝑟𝑎𝑡𝑒(%) Prospect Lifetime Value •Purpose: to account for the lifetime value of a newly acquired customer (CLV) when making prospecting decisions 9/18/2015 8 Prospect Lifetime Value •𝑷𝒓𝒐𝒔𝒑𝒆𝒄𝒕 𝑳𝒊𝒇𝒆𝒕𝒊𝒎𝒆 𝑽𝒂𝒍𝒖𝒆 $ = 𝐴𝑐𝑞𝑢𝑖𝑠𝑖𝑡𝑖𝑜𝑛 𝑟𝑎𝑡𝑒 % ∗ 𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝑚𝑎𝑟𝑔𝑖𝑛 $ + Acquisition & retention cost •Purpose: to determine the firm’s cos of acquisition and retention. Acquisition & retention cost • 𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝒂𝒄𝒒𝒖𝒊𝒔𝒊𝒕𝒊𝒐𝒏 𝒄𝒐𝒔𝒕 $ = 𝐴𝑐𝑞𝑢𝑖𝑠𝑖𝑡𝑖𝑜𝑛 𝑠𝑝𝑒𝑛𝑑𝑖𝑛𝑔($) 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑎𝑐𝑞𝑢𝑖𝑟𝑒𝑑(#) • 𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝒓𝒆𝒕𝒆𝒏𝒕𝒊𝒐𝒏 𝒄𝒐𝒔𝒕 $ = 𝑅𝑒𝑡𝑒𝑛𝑡𝑖𝑜𝑛 𝑠𝑝𝑒𝑛𝑑𝑖𝑛𝑔($) 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑟𝑒𝑡𝑎𝑖𝑛𝑒𝑑(#) 9/18/2015 9 Pricing strategy Key metrics •Price premium •Reservation price •Percent good value •Price elasticity of demand •Optimal price •Residual elasticity Price Premium •Purpose: To evaluate product pricing in the context of market competition •Also known as “relative price” 9/18/2015 10 Price Premium • 𝑷𝒓𝒊𝒄𝒆 𝒑𝒓𝒆𝒎𝒊𝒖𝒎 % = 𝑏𝑟𝑎𝑛𝑑 𝐴 𝑝𝑟𝑖𝑐𝑒 $ −𝑏𝑒𝑛𝑐ℎ𝑚𝑎𝑟𝑘 𝑝𝑟𝑖𝑐𝑒 $ 𝑏𝑒𝑛𝑐ℎ𝑚𝑎𝑟𝑘 𝑝𝑟𝑖𝑐𝑒 ($) Price Premium •Benchmark price: ◦ Price of a specific competitor(s) ◦ Average price paid: the unit-sales weighted average price in the category ◦ Average price displayed: the display-weighted average price in the category ◦ Average price charged: the unweighted average price in the category Price premium •Cautions: ◦ Retail, distributor, manufacturer pricing ◦ Gross, net of discounts, rebates, coupons. 9/18/2015 11 Other pricing metrics •Reservation price and Percent good value: ◦ Reservation price: the maximum price which a customer will buy a product. ◦ Percent good value: the proportion of customers who perceive a product to represent a good value (to carry a selling price at or below their reservation price) Other pricing metrics •Price elasticity of demand ◦ “Own” price elasticity (E1): the change in units sold due to the reaction of a firm’s customers to its changes in price. ◦ “Competitor reaction” elasticity (E2): the reaction of competitors to a firm’s price changes. ◦ “Cross” price elasticity (E3): the reaction of a firm’s customers to price changes by its competitors. ◦ Residual price elasticity=E1 + (E2 * E3) Chanel and retail management 9/18/2015 12 Key metrics •Distribution ◦ Numeric distribution ◦ All Commodity Volume (ACV) ◦ Product Category Volume (PCV) •SKU Profitability ◦ Markdown ◦ Gross Margin Return on Inventory Investment (GMROII) ◦ Direct Product Profitability (DPP) Numeric, ACV, PCV distribution •Purpose: to measure a firm’s ability to convey a product to its customers. Numeric distribution •𝑵𝒖𝒎𝒆𝒓𝒊𝒄 𝒅𝒊𝒔𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 % = 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑢𝑡𝑙𝑒𝑡𝑠 𝑐𝑎𝑟𝑟𝑦𝑖𝑛𝑔 𝑝𝑟𝑜𝑑𝑢𝑐𝑡() 𝑇𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑢𝑡𝑙𝑒𝑡𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑚𝑎𝑟𝑘𝑒𝑡() 9/18/2015 13 All Commodity Volume (ACV) •Purpose: to provide a measure of customer traffic in the stores that stock a brand. •𝑨𝑪𝑽 𝒅𝒊𝒔𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 % = 𝑇𝑜𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠 𝑜𝑓 𝑠𝑡𝑜𝑟𝑒𝑠 𝑐𝑎𝑟𝑟𝑦𝑖𝑛𝑔 𝑏𝑟𝑎𝑛𝑑($) 𝑇𝑜𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠 𝑜𝑓 𝑎𝑙𝑙 𝑠𝑡𝑜𝑟𝑒𝑠($) •𝑨𝑪𝑽 𝒅𝒊𝒔𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 $ = 𝑇𝑜𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠 𝑜𝑓 𝑠𝑡𝑜𝑟𝑒𝑠 𝑐𝑎𝑟𝑟𝑦𝑖𝑛𝑔 𝑏𝑟𝑎𝑛𝑑($) Product Category Volume (PCV) • Purpose: to provide a strong indication of the market share within a category to which a given brand has access. •𝑷𝑪𝑽 𝒅𝒊𝒔𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 % = 𝑇𝑜𝑡𝑎𝑙 𝑐𝑎𝑡𝑒𝑔𝑜𝑟𝑦 𝑠𝑎𝑙𝑒𝑠 𝑜𝑓 𝑠𝑡𝑜𝑟𝑒𝑠 𝑐𝑎𝑟𝑟𝑦𝑖𝑛𝑔 𝑏𝑟𝑎𝑛𝑑($) 𝑇𝑜𝑡𝑎𝑙 𝑐𝑎𝑡𝑒𝑔𝑜𝑟𝑦 𝑠𝑎𝑙𝑒𝑠 𝑜𝑓 𝑎𝑙𝑙 𝑠𝑡𝑜𝑟𝑒𝑠($) •𝑷𝑪𝑽 𝒅𝒊𝒔𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 $ = 𝑇𝑜𝑡𝑎𝑙 𝑐𝑎𝑡𝑒𝑔𝑜𝑟𝑦 𝑠𝑎𝑙𝑒𝑠 𝑜𝑓 𝑠𝑡𝑜𝑟𝑒𝑠 𝑐𝑎𝑟𝑟𝑦𝑖𝑛𝑔 𝑏𝑟𝑎𝑛𝑑 $ Category performance ratio •Purpose: to provide insight into a brand’s distribution network is more or less effective in selling the category of which that brand is part. •𝑪𝒂𝒕𝒆𝒈𝒐𝒓𝒚 𝒑𝒆𝒓𝒇𝒐𝒓𝒎𝒂𝒏𝒄𝒆 𝒓𝒂𝒕𝒊𝒐 % = 𝑃𝐶𝑉(%) 𝐴𝐶𝑉(%) 9/18/2015 14 SKU profitability •Purpose: to assess the effectiveness and profitability of individual product and category sales. ◦ Markdown ◦ Gross margin Return on Inventory Investment (GMROII) ◦ Direct Product Profitability (DPP) Markdown •Purpose: indicate errors in product assortment, pricing, or promotion; difficult to interpret if used as standalone metric. •𝑴𝒂𝒓𝒌𝒅𝒐𝒘𝒏 $ = 𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝑝𝑟𝑖𝑐𝑒 𝑜𝑓 𝑆𝐾𝑈 $ − 𝐴𝑐𝑡𝑢𝑎𝑙 𝑠𝑎𝑙𝑒𝑠 𝑝𝑟𝑖𝑐𝑒 $ •𝑴𝒂𝒓𝒌𝒅𝒐𝒘𝒏 % = 𝑀𝑎𝑟𝑘𝑑𝑜𝑤𝑛($) 𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝑝𝑟𝑖𝑐𝑒 𝑜𝑓 𝑆𝐾𝑈($) Gross Margin Return on Inventory Investment (GMROII) •Purpose: quantifies the profitability of products in relation to the inventory investment required to make the available. •𝑮𝑴𝑹𝑶𝑰𝑰 % = 𝐺𝑟𝑜𝑠𝑠 𝑚𝑎𝑟𝑔𝑖𝑛 𝑜𝑛 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑠𝑎𝑙𝑒𝑠 𝑖𝑛 𝑝𝑒𝑟𝑖𝑜𝑑($) 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑣𝑎𝑙𝑢𝑒 𝑎𝑡 𝑐𝑜𝑠𝑡($) 9/18/2015 15 Direct Product Profitability (DPP) • Purpose: quantifies the profitability of products in relation to the inventory investment required to make the available. •𝑫𝑷𝑷 $ = 𝐺𝑟𝑜𝑠𝑠 𝑚𝑎𝑟𝑖𝑛𝑔 $ − 𝐷𝑖𝑟𝑒𝑐𝑡 𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑐𝑜𝑠𝑡 $ •𝑫𝒊𝒓𝒆𝒄𝒕 𝒑𝒓𝒐𝒅𝒖𝒄𝒕 𝒄𝒐𝒔𝒕 $ = 𝑊𝑎𝑟𝑒ℎ𝑜𝑢𝑠𝑒 𝑑𝑖𝑟𝑒𝑐𝑡 𝑐𝑜𝑠𝑡 $ + 𝑇𝑟𝑎𝑛𝑠𝑝𝑜𝑟𝑡𝑎𝑡𝑖𝑜𝑛 𝑑𝑖𝑟𝑒𝑠𝑡 𝑐𝑜𝑠𝑡 $ + 𝑆𝑡𝑜𝑟𝑒 𝑑𝑖𝑟𝑒𝑐𝑡 𝑐𝑜𝑠𝑡($) Marketing communication metrics Key metrics • Promotion ◦ Baseline sales ◦ Promotion lift •Advertising media metrics ◦ Opportunities to see (OTS) ◦ Gross Rating Points (GRPs) ◦ Share of Voice •Web metrics ◦ Impressions ◦ Clickthrough rate ◦ Cost per impression, click, order 9/18/2015 16 Promotion: Baseline sales, incremental sales, promotional lift •Purpose: To select a baseline of sales against which the incremental sales and profit generated by marketing activity can be assessed. Promotion: Baseline sales, incremental sales, promotional lift • 𝑻𝒐𝒕𝒂𝒍 𝒔𝒂𝒍𝒆𝒔 $,# = 𝐵𝑎𝑠𝑒𝑙𝑖𝑛𝑒 𝑠𝑎𝑙𝑒𝑠 $, # + 𝐼𝑛𝑐𝑟𝑒𝑚𝑒𝑛𝑡𝑎𝑙 𝑠𝑎𝑙𝑠𝑒 𝑓𝑟𝑜𝑚 𝑚𝑎𝑟𝑘𝑒𝑡𝑖𝑛𝑔 $, # • 𝑳𝒊𝒇𝒕 % = 𝐼𝑛𝑐𝑟𝑒𝑚𝑒𝑛𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠 $,# 𝐵𝑎𝑠𝑒𝑙𝑖𝑛𝑒 𝑠𝑎𝑙𝑒𝑠 ($,#) • 𝑪𝒐𝒔𝒕 𝒐𝒇 𝒊𝒏𝒄𝒓𝒆𝒎𝒆𝒏𝒕𝒂𝒍 𝒔𝒂𝒍𝒆𝒔 $ = 𝑀𝑎𝑟𝑘𝑒𝑡𝑖𝑛𝑔 𝑠𝑝𝑒𝑛𝑑𝑖𝑛𝑔 ($) 𝐼𝑛𝑐𝑟𝑒𝑚𝑒𝑛𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠 ($) Promotion: Baseline sales, incremental sales, promotional lift •Baseline sales: ◦ Expected sales results, excluding the marketing programs under evaluation. 9/18/2015 17 Promotion: Profitability of a promotion • 𝑷𝒓𝒐𝒇𝒊𝒕𝒂𝒃𝒊𝒍𝒊𝒕𝒚 𝒐𝒇 𝒂 𝒑𝒓𝒐𝒎𝒐𝒕𝒊𝒐𝒏 $ = 𝑃𝑟𝑜𝑓𝑖𝑡𝑠 𝑎𝑐ℎ𝑖𝑣𝑒𝑑 𝑤𝑖𝑡ℎ 𝑝𝑟𝑜𝑚𝑜𝑡𝑖𝑜𝑛 $ − 𝐸𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝑝𝑟𝑜𝑓𝑖𝑡𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑝𝑟𝑜𝑚𝑜𝑡𝑖𝑜𝑛 $ • Estimated profits without promotion: profits calculated on baseline sales Advertising Media Impressions, Gross rating Points (GRPs), Target Rating Points (TRPs) Impressions •Purpose: To measure the audience for an advertisement. • Impressions = Exposures = Opportunities To See (OTS) • Impressions: the number of times a specific advertisement is delivered to a potential customer. •An estimate of the audience for a media “insertion” or a campaign. 9/18/2015 18 Impressions • 𝑰𝒎𝒑𝒓𝒆𝒔𝒔𝒊𝒐𝒏𝒔 # = 𝑅𝑒𝑎𝑐ℎ # ∗ 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦 # •𝑹𝒆𝒂𝒄𝒉 # = 𝐼𝑚𝑝𝑒𝑟𝑠𝑠𝑖𝑜𝑛(#) 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦(#) Gross Rating Points (GRPs) •Reach [Rating points – (%)]: calculated as individuals reached by that vehicle, divided by the total number of individuals in a defined population. •Gross Rating Points (GRPs): the sum of all rating points delivered by the media vehicle carrying an advertisement or campaign. Gross Rating Points (GRPs) •𝑮𝑹𝑷𝒔 = 𝑅𝑒𝑎𝑐ℎ % ∗ 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦 # ∗ 100% •𝑮𝑹𝑷𝒔 = 𝐼𝑚𝑝𝑒𝑟𝑠𝑠𝑖𝑜𝑛(#) 𝐷𝑒𝑓𝑖𝑛𝑒𝑑 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛(#) ∗ 100% 9/18/2015 19 Target Rating Points (TRPs) •Target Rating Points (TRPs): the gross rating points delivered by a media vehicle to a specific target audience. •𝑻𝑹𝑷𝒔 = 𝑅𝑒𝑎𝑐ℎ % ∗ 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑓𝑟𝑒𝑞𝑢𝑒𝑛𝑐𝑦 # ∗ 100% •𝑻𝑹𝑷𝒔 = 𝐼𝑚𝑝𝑒𝑟𝑠𝑠𝑖𝑜𝑛(#) 𝑇𝑎𝑟𝑔𝑒𝑡(#) ∗ 100% Cost per Thousand Impressions (CPM) Rate •Purpose: to compare the costs of advertising campaigns within and across different media. •CPM: The cost of a media campaign, relative to its success in generating impressions or opportunities to see. Cost per Thousand Impressions (CPM) Rate •𝐶𝑃𝑀 $ = 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝑐𝑜𝑠𝑡($) 𝐼𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑(# 𝑖𝑛 𝑡ℎ𝑜𝑢𝑠𝑎𝑛𝑑) 9/18/2015 20 Share of voice •Purpose: to evaluate the comparative level of advertising committed to a specific product or brand. •Share of voice: the percentage of advertising in a given market that a specific product or brand enjoys. Share of voice •𝑺𝒉𝒂𝒓𝒆 𝒐𝒇 𝒗𝒐𝒊𝒄𝒆 % = 𝐵𝑟𝑎𝑛𝑑 𝑎𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 ($,#) 𝑇𝑜𝑡𝑎𝑙 𝑀𝑎𝑟𝑘𝑒𝑡 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔($,#) Web metrics • Impressions, Pageviews, Hits: ◦ Purpose: to assess website traffic and activity. ◦ Pageviews: the number of times a specific page has been displayed to users (equal to OTS) ◦ Hits: A count of the number of files served to visitors on the web. 9/18/2015 21 Web metrics: rich media •Rich media display time: ◦ Purpose: to determine how long an advertisement is viewed. ◦ 𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝒓𝒊𝒄𝒉 𝒎𝒆𝒅𝒊𝒂 𝒅𝒊𝒔𝒑𝒍𝒂𝒚 𝒕𝒊𝒎𝒆 # = 𝑇𝑜𝑡𝑎𝑙 𝑟𝑖𝑐ℎ 𝑚𝑒𝑑𝑖𝑎 𝑑𝑖𝑠𝑝𝑙𝑎𝑦 𝑡𝑖𝑚𝑒(#) 𝑇𝑜𝑡𝑎𝑙 𝑟𝑖𝑐ℎ 𝑚𝑒𝑑𝑖𝑎 𝑖𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠(#) Web metrics: rich media •Rich media Interaction rate: ◦ Purpose: to measure and monitor active involvement with an advertisement. ◦ 𝑹𝒊𝒄𝒉 𝒎𝒆𝒅𝒊𝒂 𝒊𝒏𝒕𝒆𝒓𝒂𝒄𝒕𝒊𝒐𝒏 𝒓𝒂𝒕𝒆 % = 𝑇𝑜𝑡𝑎𝑙 𝑟𝑖𝑐ℎ 𝑚𝑒𝑑𝑖𝑎 𝑖𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠 𝑤𝑖𝑡ℎ 𝑖𝑛𝑡𝑒𝑟𝑎𝑐𝑡𝑖𝑜𝑛𝑠(#) 𝑇𝑜𝑡𝑎𝑙 𝑟𝑖𝑐ℎ 𝑚𝑒𝑑𝑖𝑎 𝑖𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠(#) Web metrics: clickthrough rates •Clickthrough rate: ◦ Purpose: to capture customer’s initial response to websites. ◦ 𝑪𝒍𝒊𝒄𝒌𝒕𝒉𝒓𝒐𝒖𝒈𝒉 𝒓𝒂𝒕𝒆 % = 𝐶𝑙𝑖𝑐𝑘𝑡ℎ𝑟𝑜𝑢𝑔ℎ(#) 𝐼𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠(#) ◦ Clickthrough: The number of times a click is made on the advertisement. 9/18/2015 22 Web metrics: Costs •Purpose: to capture customer’s initial response to websites. ◦ Cost per impression ◦ Cost per click ◦ Cost per order Web metrics: Costs • 𝑪𝒐𝒔𝒕 𝒑𝒆𝒓 𝒊𝒎𝒑𝒓𝒆𝒔𝒔𝒊𝒐𝒏($) = 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝑐𝑜𝑠𝑡($) 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠(#) • 𝑪𝒐𝒔𝒕 𝒑𝒆𝒓 𝒄𝒍𝒊𝒄𝒌($) = 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝑐𝑜𝑠𝑡($) 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑙𝑖𝑐𝑘𝑠(#) • 𝑪𝒐𝒔𝒕 𝒑𝒆𝒓 𝒐𝒓𝒅𝒆𝒓($) = 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝑐𝑜𝑠𝑡($) 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑜𝑟𝑑𝑒𝑟𝑠(#)