Over 100 Years of Advertising Measurement

Over 100 Years of
Advertising Measurement
(What worked and what didn’t)
[1906-2013]

© 2013 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.

“Sometimes, in order to
know where you’re
going, you need to
understand where you
came from”.

“You can’t manage what you don’t measure”.
© 2013 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. W. Edwards Deming

1906 – Print

Kellogg’s print the world’s first full
page press advert. It soon
becomes a case study for
advertising success. As a direct
result of this one advert in Ladies
Home Journal, orders of Corn
Flakes increase from 500 cases
per day to over 2,900.

Metric: Journal Subscribers v Sales.

Methodology: Kellogg’s weren’t doing
any other advertising so attribution
was easy, although (like today) this
struggles to take into account word-of-
mouth recommendations.
© 2013 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 3

According to advertising commentators, when the Ford Model T*
launched in 1908 as “the world’s first affordable car”, the increased
traffic became responsible for the explosion in roadside advertising.
* Any colour as long as it is black.

1912 – Outdoor
The world’s largest billboard is built in
Times Square, New York measuring
32m x 15m. Ad men claim that
billboards are the ultimate ad format
for increasing brand awareness.

Metric: Traffic (”Eyeballs”).

Methodology: A very rough manual
footfall estimate of the number of people /
traffic that passes through Times Square.
Not much has changed in billboard
measurement over the last 100 years.


1922 – Radio

Alvin. T Fuller is the first
person to purchase time on
a radio station in exchange
for mentions.

Metric: Number of Listeners.

Methodology: Arthur Nielsen
acquires Audimeter in 1936
and creates Nielsen Radio
Ratings in 1942 to measure
audience demographics from
devices in 1,000 homes.

1939 – Direct Mail
Advertising agencies start to appear
everywhere. The founder of one of the
most successful ones, David Ogilvy
starts out in business by spending
$500 on postcards to advertise a hotel
for his first client. He mails them to
everyone in his phone directory.

Direct response advertising is born.


“The Best Advertising Isn’t Advertising”.
Ajaz Ahmed

Copywriters should spend 60% of
their time writing the headline”.
David Ogilvy


10

In 1941 the world’s first TV ad was run by watchmaker
Bulova on New York station WNBT. They paid $9 for a
10 second spot during a primetime Brooklyn Dodgers
v Philadelphia Phillies baseball game.

1960 - TV
For the world’s first televised
presidential debate,
advertising students at
Harvard University predict
that the average attention
span of the American public
is 42 seconds.

JFK wins the debates with
responses broken down into
42 second sound-bites.

Similar research was done in
2008 for Barack Obama’s
campaign. The average
attention span had dropped
to less than 5 seconds

Obama’s simple “Change”
and “Yes We Can” campaign
was born partly as a result of
this research.

1971 – TVC

Coca-Cola release their
iconic “I’d like to teach the
world to sing” TV
commercial (TVC).

Sales explode and over the
next 9 years Coca-Cola
expands it’s operation into
163 countries.

Metric:
Neilsen Ratings Points / Share

Methodology: Viewing habits
of households are measured
using TV set meters. Accuracy
is difficult since only 0.2% of
households are measured.Adobe Confidential.
© 2013 Adobe Systems Incorporated. All Rights Reserved. 13

1994 – Display
Three years after the internet is
“invented” by Sir Tim Berners-Lee, US
Telecoms company AT&T run the world’s
first digital display advert (above).

Metric: CPM (Cost per mille)

Methodology: Adverts are sold on a CPM
basis by calculating the cost of an ad divided
by the audience size. Analysts measure the
amount of impressions served, even though a
14
© 2013 Adobe may Incorporated. All Rights Reserved. or clicked on it.
user Systems not have seen Adobe Confidential.

By 2000 consumers are seeing to up to 10,000
advertising messages everyday.

2000 – AdWords
Google launches AdWords in 2000 with 350 customers.
By 2012 it is their main source of revenue generating USD$42.5bn.

Metric: CPM or CPC (Cost per click)

Methodology: CPC advertisers bid on keyword phrases relevant to their target market and only pay
when an ad is clicked on. Many advertisers struggle to understand what happens next once Google
has delivered that customer to your site.


All the data ever collected in the world up until
2003 is now reproduced every 48 hours.

#BigData

2003 – Acquisition
The need to track acquisition metrics
became more important once CEO’s
started demanding conversions instead
of just brand awareness or impressions.

“How many customers actually bought
anything as a result of this campaign?”

As a result, advertising success metrics
become more credible in the boardroom
because as they are calculated upon
conversations, rather than leads*.

Metric: CPA (Cost per Acquisition)

Methodology: Ad Campaign Cost /
[Impressions x CTR x Paying Customers]

* CPL (Cost per Lead) is a variation of CPA.

2006 “Social” Media

The term “Cost per engagement” is
trademarked in order to attempt to bring
more credibility and accountability to ad
units. Social advertising takes off in
2008 when Facebook launches
engagement ads. Facebook user growth
explodes from 150m - 450m during the
next 12 months.

Metric: CPE (Cost per Engagement)

Methodology: Unlike CPM or CPC, CPE
impressions are free. Advertisers only pay for
CPE ads when a user clicks on an ad.

Note: In some instances, “Engagement” is classed as
someone simply hovering over an ad to open up the full
creative.

19

Starbucks produce the first promoted tweet in April 2010. Some
reports claim that Starbucks is “the most connected brand in the
world” slightly ahead of Coca-Cola, Disney and Red Bull.

2010 – Social ROI

As brands start investing significant
amounts of money in social media
campaigns, marketers and executives
debate social ROI. Many (wrongly)
believe that it is impossible “to put a
value on a relationship”.

Some agencies even suggest that the
average value of a “like” is $136.38!

Metric: ROI – Return on Investment

Methodology:
(Revenue - Investment) / Investment *100

2010 – Pinterest

Pinterest launched as a closed beta in
2010. By 2012 it was driving more traffic
to websites than LinkedIn, Twitter,
Google+ and YouTube combined.

Pinterest is now valued at $2.5bn having
grown from 5,000 users to 48.7m in just
under 3 years. High click-through-rates
attract brand advertisers, but threaten to
dilute what made Pinterest so special to
users in the first place.

Metric: CTR – Click-through-Rate

Methodology:
(Clicks on website / Impressions) x 100

“It’s not survival of the fittest anymore, it’s survival of the fastest”.
#DigitalDarwinism @BrianSolis
This evolution is (obviously) not endorsed by Adobe… #JustSayin

2012 – Social NPS
As the boundaries between marketing and
customer service become increasingly blurred
within social media channels, measuring
customer satisfaction (instead of ROI) becomes
increasingly important. This is especially true for
brands wanting to measure the impact of social
media, but who are not able to directly link
social activity to sales.

Metric: NPS (Net Promoter Score)

Methodology: Measuring customer satisfaction in
order to calculate brand loyalty, is usually done in
social media via a survey. Consumers are usually
rated on a scale of 1-10 and ranked as promoters or Heineken believe that the
detractors.
majority of their 12.4m
Users are incentivsed to take a Facebook or Twitter Facebook fans are 64% more
survey (often anonymously), asking customers, fans likely to recommend them to
and non-customers of certain brands, how likely they
would be to recommend those brands to their friends. their friends in the pub.

FourSquare was launched in 2009 by Denis
Crowley and Naveen Selvadurai at SXSW.

It now represents 1.3m businesses and
boasts 33m users who have “checked-in” to
those businesses 3.5 billion times.


2012 – Check-In’s

While the future of check-in services
like 4SQ and the likelihood of users
checking-into venues is still a top of
hot debate, driving a customer into a
physical location as a result of a
social media interaction is still the
ultimate goal and dream success
metric for many social brands.

Metric: Check-In’s / Coupon Redemption

Methodology: Analytics from your
preferred location-based marketing
service will help you measure the success
of your social activity. The most savvy
brands are able to match up online
data, with existing customer data, and
match it up against to social interactions.

2013+ The Future?

Now that Facebook own face-recognition and location
based technology via their acquisitions of Face.com and
Gowalla it will be interesting to see how they encourage
global brands to engage with consumers on a local
scale…

Some reports claim that uber-social brands like Starbucks
are trialing technology that automatically check-in opt-in
users via face recognition when they enter a store, sends
their favourite drink order to the barista, and contactless
payment helps them be in and out of the store in seconds.

Metric: ”Door Swingers”

Methodology: Facebook will be a major player in this space, but
expect to see major partnerships with Square – helping local
businesses track the spending habits and online behaviour of their
© 2013 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. most loyal customers, by accessing their social profiles.

Need More Inspiration?

VC / Angel Investors Chris Sacca & Kevin Rose
(Co-Founder of Digg) discussing digital advertising


Want to see what the future
holds for social businesses?
Check out
http://www.adobe.com/uk/prod
ucts/social.html

@JeremyWaite
Head of Social Strategy, Adobe EMEA

Over 100 Years of Advertising Measurement

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Over 100 Years of Advertising Measurement

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