Lecture 13 - Evaluation of Advertising Effectiveness - B Com PDF Download

 Page 1


 
 
Evaluating Advertising Effectiveness 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subject: Commerce 
Lesson: Evaluation of Advertising Effectiveness 
Lesson Developer: Sarojini Singhal 
College/Department: Janki Devi Memorial College, 
Commerce 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Page 2


 
 
Evaluating Advertising Effectiveness 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subject: Commerce 
Lesson: Evaluation of Advertising Effectiveness 
Lesson Developer: Sarojini Singhal 
College/Department: Janki Devi Memorial College, 
Commerce 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 Evaluating Advertising Effectiveness 
 
 
 
 
2 
 
Institute of Lifelong Learning, University of Delhi.  
 
 
 
 
 
Table of Contents: 
 
Lesson: Evaluating Advertising Effectiveness 
1: Learning Outcomes 
2: Introduction 
3: Concept of Evaluation of advertising effectiveness 
4: Reasons for measuring advertising effectiveness 
5: Reasons why company do not measure advertising effectiveness 
6: Approaches of evaluating advertising effectiveness 
6.1: Communication effect 
6.2: Sales effect 
7: Stages of measuring advertising effectiveness 
7.1: Communication effect test (Pre-test and Post-test) 
7.2: Sales effect test (Pre-test and Post-test) 
8: Comparison of Pre-tests and Post Tests 
Summary  
Exercises 
Glossary 
References 
 
 
1. Learning Outcomes: 
 
After reading this lesson, you should be able to: 
? understand the concept of advertising effectiveness, 
? appreciate the importance of evaluating advertising effectiveness, 
? comprehend the reasons that deter the companies to measure advertising 
effectiveness, 
? differentiate between pre-tests and post-tests for measuring advertising 
effectiveness, 
? understand the objectives of conducting a pre-test and a post-test, 
? differentiate between communication and sales effect approaches to measure 
advertising effectiveness, 
? appreciate the communication effect and sales effect of an advertising effort, 
? identify different pre and post test methods of measuring advertising 
effectiveness in terms of communication effect and sales effect, 
? choose an appropriate method for evaluating the effectiveness of an 
advertisement before and after its release, 
? justify the feasibility of measurement of communication effect and sales effect 
for an advertisement. 
 
 
 
2. Introduction    
 
Page 3


 
 
Evaluating Advertising Effectiveness 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subject: Commerce 
Lesson: Evaluation of Advertising Effectiveness 
Lesson Developer: Sarojini Singhal 
College/Department: Janki Devi Memorial College, 
Commerce 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 Evaluating Advertising Effectiveness 
 
 
 
 
2 
 
Institute of Lifelong Learning, University of Delhi.  
 
 
 
 
 
Table of Contents: 
 
Lesson: Evaluating Advertising Effectiveness 
1: Learning Outcomes 
2: Introduction 
3: Concept of Evaluation of advertising effectiveness 
4: Reasons for measuring advertising effectiveness 
5: Reasons why company do not measure advertising effectiveness 
6: Approaches of evaluating advertising effectiveness 
6.1: Communication effect 
6.2: Sales effect 
7: Stages of measuring advertising effectiveness 
7.1: Communication effect test (Pre-test and Post-test) 
7.2: Sales effect test (Pre-test and Post-test) 
8: Comparison of Pre-tests and Post Tests 
Summary  
Exercises 
Glossary 
References 
 
 
1. Learning Outcomes: 
 
After reading this lesson, you should be able to: 
? understand the concept of advertising effectiveness, 
? appreciate the importance of evaluating advertising effectiveness, 
? comprehend the reasons that deter the companies to measure advertising 
effectiveness, 
? differentiate between pre-tests and post-tests for measuring advertising 
effectiveness, 
? understand the objectives of conducting a pre-test and a post-test, 
? differentiate between communication and sales effect approaches to measure 
advertising effectiveness, 
? appreciate the communication effect and sales effect of an advertising effort, 
? identify different pre and post test methods of measuring advertising 
effectiveness in terms of communication effect and sales effect, 
? choose an appropriate method for evaluating the effectiveness of an 
advertisement before and after its release, 
? justify the feasibility of measurement of communication effect and sales effect 
for an advertisement. 
 
 
 
2. Introduction    
 
 Evaluating Advertising Effectiveness 
 
 
 
 
3 
 
Institute of Lifelong Learning, University of Delhi.  
 
 
 
Advertising is an idea around which an advertising campaign is designed for a product. 
It is a form of marketing communication that is used to convince or persuade the 
prospective customers to exhibit a desired behavior.  It is a paid form of 
communication in an oral or visual form through one or more media. Advertising aims 
to attain the marketing objectives. It stimulates the sales and compels the firm to 
improve its productivity. All this requires a lot of funds. With the increase in 
competition and consumer awareness, the spending on advertising and other forms of 
promotion has increased further. Since large amounts of money are spent on 
advertising, it becomes necessary to measure and evaluate the effectiveness of the 
firm’s advertising expenditure. For example, the figure below clearly shows that a lot of 
amount is spent by advertisers from different areas like automotive, retail, media, 
medicine, confectionary, financial services, and so on. 
 
Figure 1: Click on the link below to view Advertising expenditure made by top 100 
advertisers. 
 
Source: http://lsvp.files.wordpress.com/2007/05/ad-spending-by-category.jpg 
 
 
Measuring advertising effectiveness means the evaluation of the performance of an 
advertising campaign. Just as good planning and control is required for every aspect of 
management task, a sound planning and control of advertising is a prerequisite of 
success of advertising effort. Such an evaluation is done to evaluate whether an 
advertising effort is accomplishing its pre-determined objectives and calls for a 
research. The different methods of such research are termed as tests. 
 
The objectives of advertising could be communication objectives or sales objectives. An 
evaluation to measure the communication effect is called communication effect 
research. Similarly, an evaluation to measure the sales effect is called sales effect 
research. 
 
3. Concept of Evaluation of Advertising Effectiveness 
 
The advertiser and the advertising agency share the responsibility for making 
advertising effective. The effectiveness of advertising should be measured and 
evaluated on multiple parameters like the originality, creativity and innovation in the 
ad, attention value of the ad, understandability of ad, the acceptability and credibility 
of the ad, technical aspect of running the campaign, its overall impact on consumers 
attitude and buying behaviour, etc. 
 
The evaluation of advertising effectiveness for both communication effect and sales 
effect is conducted at three stages: before implementing the advertising campaign 
(pre-test), during the advertising campaign is promoted (concurrent test), and after 
the implementation of the advertising campaign (post-test). Each of these 
measurement and evaluation is done with a specific purpose and involves distinct 
methodology. It is through market research that the advertiser gathers the relevant 
data and knowledge about the performance of an advertising effort. The market 
research brings forth the data about the consumers, their needs and wants, their 
buying behavior, the product qualities aspired by them, the place and timing of 
Page 4


 
 
Evaluating Advertising Effectiveness 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subject: Commerce 
Lesson: Evaluation of Advertising Effectiveness 
Lesson Developer: Sarojini Singhal 
College/Department: Janki Devi Memorial College, 
Commerce 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 Evaluating Advertising Effectiveness 
 
 
 
 
2 
 
Institute of Lifelong Learning, University of Delhi.  
 
 
 
 
 
Table of Contents: 
 
Lesson: Evaluating Advertising Effectiveness 
1: Learning Outcomes 
2: Introduction 
3: Concept of Evaluation of advertising effectiveness 
4: Reasons for measuring advertising effectiveness 
5: Reasons why company do not measure advertising effectiveness 
6: Approaches of evaluating advertising effectiveness 
6.1: Communication effect 
6.2: Sales effect 
7: Stages of measuring advertising effectiveness 
7.1: Communication effect test (Pre-test and Post-test) 
7.2: Sales effect test (Pre-test and Post-test) 
8: Comparison of Pre-tests and Post Tests 
Summary  
Exercises 
Glossary 
References 
 
 
1. Learning Outcomes: 
 
After reading this lesson, you should be able to: 
? understand the concept of advertising effectiveness, 
? appreciate the importance of evaluating advertising effectiveness, 
? comprehend the reasons that deter the companies to measure advertising 
effectiveness, 
? differentiate between pre-tests and post-tests for measuring advertising 
effectiveness, 
? understand the objectives of conducting a pre-test and a post-test, 
? differentiate between communication and sales effect approaches to measure 
advertising effectiveness, 
? appreciate the communication effect and sales effect of an advertising effort, 
? identify different pre and post test methods of measuring advertising 
effectiveness in terms of communication effect and sales effect, 
? choose an appropriate method for evaluating the effectiveness of an 
advertisement before and after its release, 
? justify the feasibility of measurement of communication effect and sales effect 
for an advertisement. 
 
 
 
2. Introduction    
 
 Evaluating Advertising Effectiveness 
 
 
 
 
3 
 
Institute of Lifelong Learning, University of Delhi.  
 
 
 
Advertising is an idea around which an advertising campaign is designed for a product. 
It is a form of marketing communication that is used to convince or persuade the 
prospective customers to exhibit a desired behavior.  It is a paid form of 
communication in an oral or visual form through one or more media. Advertising aims 
to attain the marketing objectives. It stimulates the sales and compels the firm to 
improve its productivity. All this requires a lot of funds. With the increase in 
competition and consumer awareness, the spending on advertising and other forms of 
promotion has increased further. Since large amounts of money are spent on 
advertising, it becomes necessary to measure and evaluate the effectiveness of the 
firm’s advertising expenditure. For example, the figure below clearly shows that a lot of 
amount is spent by advertisers from different areas like automotive, retail, media, 
medicine, confectionary, financial services, and so on. 
 
Figure 1: Click on the link below to view Advertising expenditure made by top 100 
advertisers. 
 
Source: http://lsvp.files.wordpress.com/2007/05/ad-spending-by-category.jpg 
 
 
Measuring advertising effectiveness means the evaluation of the performance of an 
advertising campaign. Just as good planning and control is required for every aspect of 
management task, a sound planning and control of advertising is a prerequisite of 
success of advertising effort. Such an evaluation is done to evaluate whether an 
advertising effort is accomplishing its pre-determined objectives and calls for a 
research. The different methods of such research are termed as tests. 
 
The objectives of advertising could be communication objectives or sales objectives. An 
evaluation to measure the communication effect is called communication effect 
research. Similarly, an evaluation to measure the sales effect is called sales effect 
research. 
 
3. Concept of Evaluation of Advertising Effectiveness 
 
The advertiser and the advertising agency share the responsibility for making 
advertising effective. The effectiveness of advertising should be measured and 
evaluated on multiple parameters like the originality, creativity and innovation in the 
ad, attention value of the ad, understandability of ad, the acceptability and credibility 
of the ad, technical aspect of running the campaign, its overall impact on consumers 
attitude and buying behaviour, etc. 
 
The evaluation of advertising effectiveness for both communication effect and sales 
effect is conducted at three stages: before implementing the advertising campaign 
(pre-test), during the advertising campaign is promoted (concurrent test), and after 
the implementation of the advertising campaign (post-test). Each of these 
measurement and evaluation is done with a specific purpose and involves distinct 
methodology. It is through market research that the advertiser gathers the relevant 
data and knowledge about the performance of an advertising effort. The market 
research brings forth the data about the consumers, their needs and wants, their 
buying behavior, the product qualities aspired by them, the place and timing of 
 Evaluating Advertising Effectiveness 
 
 
 
 
4 
 
Institute of Lifelong Learning, University of Delhi.  
 
 
 
purchase, the advertising strategy of the competitors, and such other information that 
enables the top management in quantifying and assessing the importance of 
advertising. 
 
So it is clear, that it is very important to measure the effectiveness of advertising with 
respect to its media, advertising copy, the relevance of the advertising message and so 
on. For example, the following figure reveals the advertising effectiveness of different 
advertising media, namely, print, web, newspaper, radio, elevator, billboard, TV and 
cable Such a research done by a firm enables a firm to analyze that the print media has 
been more effective for its product. This further helps the firm to plan its future 
advertising effort. 
 
Figure 2: Click on the link below to view an image showing ‘Relative Effectiveness of 
different Advertising Media’ 
 
Source: http://www.greenfieldbelser.com/media/pnc/7/media.1127.jpg   
 
Such data is useful in planning advertising programs, in designing the advertising 
message, in the colour and layout of advertising copy, and in selecting the type of 
media that can be employed. Preparation of advertisements requires extensive time 
and money to receive returns. Clearly advertising is an expensive tool for market 
promotion and can consume a major part of the promotional budget. Thus, it is 
imperative to check how far advertising can help companies achieve their marketing 
goals. Essentially the ultimate purpose of advertising is to increase sales and to make 
more profit with increased consumer satisfaction.  
 
The term Advertising Effectiveness is defined as the degree to which the objectives of 
an advertisement or advertising campaign have been achieved. Such effectiveness is 
commonly gauged by measuring the effect on sales, brand awareness, brand 
preference, and so on. 
 
Value Addition 1: Example 
Evaluation of Advertising for Launch of Tata Sky+ 
Tata Sky, a leading Satellite Television provider, launched Tata Sky+ to the viewers’ 
with the power to plan and control his TV viewing experience with the features that 
allow him to Pause, Record and Rewind Live TV. 
It aimed at premium target audience belonging to affluent families in 25+ age group. 
The communication goal was to create awareness about various features of Tat Sky+. 
The ad was launched in August 2008 with Aamir Khan and Gul Panag as brand 
ambassadors. The creative agency Ogilvy and Mather (O&M) India came up with a very 
effective tagline: ‘Isko laga dala to life aur bhi jhinga lala’. 
The digital strategy focused on online users and mobile users who had smart phones. 
The evaluation of communication effect of this ad pointed out to the following results: 
1. Online- 157 Million impressions delivered, average CTR (Click through rate) of 
0.4% making the campaign one of the most successful digital campaigns for 
Tata Sky. The Video ad units generated 4-8 times the CTR of standard units. 
The campaign delivered twice as many clicks as were estimated.  
2. Mobile- Thousands of unique consumers availed of click to call facility 
Page 5


 
 
Evaluating Advertising Effectiveness 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subject: Commerce 
Lesson: Evaluation of Advertising Effectiveness 
Lesson Developer: Sarojini Singhal 
College/Department: Janki Devi Memorial College, 
Commerce 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 Evaluating Advertising Effectiveness 
 
 
 
 
2 
 
Institute of Lifelong Learning, University of Delhi.  
 
 
 
 
 
Table of Contents: 
 
Lesson: Evaluating Advertising Effectiveness 
1: Learning Outcomes 
2: Introduction 
3: Concept of Evaluation of advertising effectiveness 
4: Reasons for measuring advertising effectiveness 
5: Reasons why company do not measure advertising effectiveness 
6: Approaches of evaluating advertising effectiveness 
6.1: Communication effect 
6.2: Sales effect 
7: Stages of measuring advertising effectiveness 
7.1: Communication effect test (Pre-test and Post-test) 
7.2: Sales effect test (Pre-test and Post-test) 
8: Comparison of Pre-tests and Post Tests 
Summary  
Exercises 
Glossary 
References 
 
 
1. Learning Outcomes: 
 
After reading this lesson, you should be able to: 
? understand the concept of advertising effectiveness, 
? appreciate the importance of evaluating advertising effectiveness, 
? comprehend the reasons that deter the companies to measure advertising 
effectiveness, 
? differentiate between pre-tests and post-tests for measuring advertising 
effectiveness, 
? understand the objectives of conducting a pre-test and a post-test, 
? differentiate between communication and sales effect approaches to measure 
advertising effectiveness, 
? appreciate the communication effect and sales effect of an advertising effort, 
? identify different pre and post test methods of measuring advertising 
effectiveness in terms of communication effect and sales effect, 
? choose an appropriate method for evaluating the effectiveness of an 
advertisement before and after its release, 
? justify the feasibility of measurement of communication effect and sales effect 
for an advertisement. 
 
 
 
2. Introduction    
 
 Evaluating Advertising Effectiveness 
 
 
 
 
3 
 
Institute of Lifelong Learning, University of Delhi.  
 
 
 
Advertising is an idea around which an advertising campaign is designed for a product. 
It is a form of marketing communication that is used to convince or persuade the 
prospective customers to exhibit a desired behavior.  It is a paid form of 
communication in an oral or visual form through one or more media. Advertising aims 
to attain the marketing objectives. It stimulates the sales and compels the firm to 
improve its productivity. All this requires a lot of funds. With the increase in 
competition and consumer awareness, the spending on advertising and other forms of 
promotion has increased further. Since large amounts of money are spent on 
advertising, it becomes necessary to measure and evaluate the effectiveness of the 
firm’s advertising expenditure. For example, the figure below clearly shows that a lot of 
amount is spent by advertisers from different areas like automotive, retail, media, 
medicine, confectionary, financial services, and so on. 
 
Figure 1: Click on the link below to view Advertising expenditure made by top 100 
advertisers. 
 
Source: http://lsvp.files.wordpress.com/2007/05/ad-spending-by-category.jpg 
 
 
Measuring advertising effectiveness means the evaluation of the performance of an 
advertising campaign. Just as good planning and control is required for every aspect of 
management task, a sound planning and control of advertising is a prerequisite of 
success of advertising effort. Such an evaluation is done to evaluate whether an 
advertising effort is accomplishing its pre-determined objectives and calls for a 
research. The different methods of such research are termed as tests. 
 
The objectives of advertising could be communication objectives or sales objectives. An 
evaluation to measure the communication effect is called communication effect 
research. Similarly, an evaluation to measure the sales effect is called sales effect 
research. 
 
3. Concept of Evaluation of Advertising Effectiveness 
 
The advertiser and the advertising agency share the responsibility for making 
advertising effective. The effectiveness of advertising should be measured and 
evaluated on multiple parameters like the originality, creativity and innovation in the 
ad, attention value of the ad, understandability of ad, the acceptability and credibility 
of the ad, technical aspect of running the campaign, its overall impact on consumers 
attitude and buying behaviour, etc. 
 
The evaluation of advertising effectiveness for both communication effect and sales 
effect is conducted at three stages: before implementing the advertising campaign 
(pre-test), during the advertising campaign is promoted (concurrent test), and after 
the implementation of the advertising campaign (post-test). Each of these 
measurement and evaluation is done with a specific purpose and involves distinct 
methodology. It is through market research that the advertiser gathers the relevant 
data and knowledge about the performance of an advertising effort. The market 
research brings forth the data about the consumers, their needs and wants, their 
buying behavior, the product qualities aspired by them, the place and timing of 
 Evaluating Advertising Effectiveness 
 
 
 
 
4 
 
Institute of Lifelong Learning, University of Delhi.  
 
 
 
purchase, the advertising strategy of the competitors, and such other information that 
enables the top management in quantifying and assessing the importance of 
advertising. 
 
So it is clear, that it is very important to measure the effectiveness of advertising with 
respect to its media, advertising copy, the relevance of the advertising message and so 
on. For example, the following figure reveals the advertising effectiveness of different 
advertising media, namely, print, web, newspaper, radio, elevator, billboard, TV and 
cable Such a research done by a firm enables a firm to analyze that the print media has 
been more effective for its product. This further helps the firm to plan its future 
advertising effort. 
 
Figure 2: Click on the link below to view an image showing ‘Relative Effectiveness of 
different Advertising Media’ 
 
Source: http://www.greenfieldbelser.com/media/pnc/7/media.1127.jpg   
 
Such data is useful in planning advertising programs, in designing the advertising 
message, in the colour and layout of advertising copy, and in selecting the type of 
media that can be employed. Preparation of advertisements requires extensive time 
and money to receive returns. Clearly advertising is an expensive tool for market 
promotion and can consume a major part of the promotional budget. Thus, it is 
imperative to check how far advertising can help companies achieve their marketing 
goals. Essentially the ultimate purpose of advertising is to increase sales and to make 
more profit with increased consumer satisfaction.  
 
The term Advertising Effectiveness is defined as the degree to which the objectives of 
an advertisement or advertising campaign have been achieved. Such effectiveness is 
commonly gauged by measuring the effect on sales, brand awareness, brand 
preference, and so on. 
 
Value Addition 1: Example 
Evaluation of Advertising for Launch of Tata Sky+ 
Tata Sky, a leading Satellite Television provider, launched Tata Sky+ to the viewers’ 
with the power to plan and control his TV viewing experience with the features that 
allow him to Pause, Record and Rewind Live TV. 
It aimed at premium target audience belonging to affluent families in 25+ age group. 
The communication goal was to create awareness about various features of Tat Sky+. 
The ad was launched in August 2008 with Aamir Khan and Gul Panag as brand 
ambassadors. The creative agency Ogilvy and Mather (O&M) India came up with a very 
effective tagline: ‘Isko laga dala to life aur bhi jhinga lala’. 
The digital strategy focused on online users and mobile users who had smart phones. 
The evaluation of communication effect of this ad pointed out to the following results: 
1. Online- 157 Million impressions delivered, average CTR (Click through rate) of 
0.4% making the campaign one of the most successful digital campaigns for 
Tata Sky. The Video ad units generated 4-8 times the CTR of standard units. 
The campaign delivered twice as many clicks as were estimated.  
2. Mobile- Thousands of unique consumers availed of click to call facility 
 Evaluating Advertising Effectiveness 
 
 
 
 
5 
 
Institute of Lifelong Learning, University of Delhi.  
 
 
 
(communication effect). There was a tremendous response in terms of units sold 
(Sales effect).   
The above result shows that it is actually difficult to measure the communication effect 
or sales effect of any advertisement separately. 
Source: http://www.cbsnews.com/8301-505123_162-42740145/analysis-apple-ads-
more-effective-than-
microsofts/http://www.media2win.com/case_studies_tata_sky_plus.html 
 
 
4. Reasons for Measuring Advertising Effectiveness  
 
To avoid costly mistakes: Companies are spending huge money year after year on 
advertising, but not all that money is spent wisely. By evaluating the effectiveness of 
the chosen program, the companies can ensure that money is not being wasted on 
ineffective advertising programs. 
 
Value Addition 2: Example 
Apple’s Advertising Vs. Microsoft Advertising 
Click on the link below to see an image showing the comparison drawn by Todd Bishop 
for the advertising expenditure as a percentage of revenue and its success in 
generating sales for two giant firms – Apple and Microsoft. He expressed that Apple 
was more successful than Microsoft in its advertising efforts. This can be seen in the 
figure below that shows that the advertising expenditure as a percentage of revenue 
for Apple was less than that of Microsoft. The lesser the expenditure with a level of 
sales, the better it is. 
Source: http://www.cbsnews.com/8301-505123_162-42740145/analysis-apple-ads-
more-effective-than-microsofts/ 
 
As the saying goes, “a rupee saved is a rupee earned. ”Therefore cost for efficiency 
testing may become an investment that will prevent costly mistakes in future. 
Feedback is always useful, even if it means extra expenditure for the advertiser. 
Through feedback companies can research answer to how and why advertising 
succeeds or fails. A research approach to advertising is necessary if it is to become 
increasingly effective.  
 
Evaluating Alternative Strategies: A good evaluation program will be able to 
analyze the effectiveness of the alternative strategies used by the company. For 
example companies may be able to find out which media, message or copy is more 
effective than another.   
 
Value Addition 3: Example 
Evaluating Alternative Advertising Media- Television Vs. Web 
In a study, it was found that the Web, because of its popularity, has become extremely 
relevant to the advertisers and marketers. The traditional media of advertising and the 
web were compared on a number of aspects such as: 
? The ability to inform,