The recession has either changed the way advertisers do business or has forced us to reevaluate the ways in which we do business. The focus has shifted to the effectiveness and efficiency of an ad campaign rather than stressing the campaign or ad variables such as reach and effective frequency.
If you work in a media department, then measuring effectiveness and efficiency is something you've likely done for years with little to no fanfare from the client side. Well, the climate's changed, and clients are concerned more than ever -- with good reason -- that their ads and campaigns meet efficient, effective, and measurable goals. Their priority is to connect with the target audience in a manner that's more in-tune with a reduced budget. Clients are are requiring or searching for agencies capable of providing campaigns that work harder and smarter.
In addition, advertisers (namely P&G and Coca Cola), have instituted Value Based Compensation (VBC) arrangements made up of a pay-for-performance (P4P) layout that can be attained in addition to a base fee.
The Nielsen Company has just announced that a new software product, Rapid Campaign Evaluation (RCE), a fast and inexpensive means to review ad performance in just over a week. Due to the costs incurred when an ad or campaign is launched, RCE will give agencies information quickly so as to allow them to respond in an appropriate manner.
Richard Reeves, associate director of Consumer Research Services at the Nielsen Company, notes an agency not only will have the ability to evaluate their own endeavors but the ability to evaluate their competitor's as well.
"Whenever a new commercial is executed," Reeves says, "there is always that element of anticipation about how it will perform in the ‘real world.' If it’s a competitor’s ad -- you are usually left worrying about the damage it will do to your brand."
RCE was designed and tested in Australia to measure the strength (or weakness) of TV spots. How many people saw or heard the ads or whether the audience was able to determine the advertiser and the take-away message will provide advertisers with almost "real-time" data they can then use to readjust their tactics such as:
An ad that performed strongly may provide justification to increase spend.
An ad with mediocre results could be re-edited to clarify the brand message and increase brand cues, or it could be taken back into qualitative research for fine tuning.
An ad can be created or ad spend can be increased if RCE showed strong effectiveness measures for a competitor’s ad.
In just over a week, agencies will be able to view data in order to evaluate effectiveness or lack thereof, ensuring clients get the biggest bang for their buck.
While advertising "gurus" have bandied back and forth as to the fairness or plausibility of the VBC model, companies, such as Coca Cola, have already put it into action. In truth, it's the most equitable payment arrangement; agencies require media vendors to prove their performance. Why shouldn't clients require the same from their agencies?
Nielsen's new software is just another step in the ongoing evolution of the industry.