When it comes to measure media performance, what ae the best key performance indicators? (KPIs). A ANA survey in the USA found that most of the more popular KPIs measure the cost of media, but very few measure the media performance in delivering a return on investment or return on ad spend (ROAS). This is evident of a continuing obsession with the cost of advertising and not the outcome it delivers.
DARREN: Welcome to Media Minutes. I am Darren Woolley STEPHEN: And I am Stephen Wright DARREN: In the next few minutes we will share with you our view on setting media key performance indices. Stephen, what is your point of view on setting media kpis? STEPHEN: Well Darren, as they say, what you can measure you can manage. DARREN: Yes, Stephen, very true. But they also say that just because you measure something does not mean you should. STEPHEN: The report by the Association of National Advertisers certainly reinforces that position Darren. Did you read it? DARREN: I did Stephen. Another great piece of research from the ANA. And I was surprised because we see this time and again across all aspects of marketing performance. STEPHEN: What’s that Darren? DARREN: This focus on inputs such as cost rather than output and outcomes or performance? STEPHEN: Yes, one of the criticisms of the report was that many of the most popular kpis found in their survey of marketers were more measures of media cost such as cost per thousand and cost per click rather than ROI measures such as return on ad spend. DARREN: Good old ROAS. Return on ad spend should be the ultimate measure. STEPHEN: That is true Darren, but for many advertisers this can be incredibly difficult. There are so many variables that need to be taken into consideration and often the cost of measuring and calculating return on marketing investment can be complex and expensive. DARREN: Yes, but that doesn’t mean advertisers should not try? STEPHEN: Most are trying. But Darren, in lieu of being able to prove ROAS, most are focusing on performance from a cost and reach perspective with these measures. DARREN: But Stephen, isn’t there a danger in focusing on these cost related input measures alone? STEPHEN: It is true Darren. If the media agency is only focusing on cost then the danger is they could be delivering against these measures at the expense of performance. DARREN: In what way, Stephen. STEPHEN: Well Darren, there is an almost unlimited source of media inventory these days. If you are buying only on price, then you are buying the cheapest, which is not necessarily the media that will deliver the results. DARREN: Well Stephen, it is true, typically only get what you pay for. STEPHEN: As Ad Fraud Detective, Augustine Fou maintains, bot driven ad fraud is often the lowest cost but also had the highest click through rates to attract exactly these types of advertisers. DARREN: You mean focusing on kpis that focus on cost, either of reach or responses such as clicks, could be playing into the hands of fraudsters and criminals? STEPHEN: It is very likely Darren. But the fact is solving the multibillion dollar ad fraud issue will take more than aligning advertiser kpis to performance. DARREN: Of course, Stephen. But there are many more benefits for advertisers and their agencies in focus on media performance. STEPHEN: Exactly, Darren. Measuring return on ad spend means that advertisers and their agencies can focus on optimising their media to drive business growth by identifying the real media value in the market. DARREN: Thank you, Stephen. And for more media value, make sure you subscribe to Media Minutes. A weekly snack on all things media. Until then. I’m Darren Woolley, and he’s STEPHEN: Stephen Wright TOGETHER: And this is Media Minutes.