It is important to understand the best way to measure your campaign results in order to gauge the effectiveness and ROI of your ad campaigns. However, it's essential to know which metrics to look at when measuring ad performance.
Two key metrics to look at in analytics are ratings (primarily used for measuring television and radio) and impressions (used across all media). Knowing which metrics to look at can help you determine whether your campaigns are getting the results you want. In the process, you'll be able to make more informed decisions to optimize your campaigns.
What are Impressions?
If your goal is to measure how many people your TV commercial is reaching, you can look at impressions. Impressions are the estimated number of viewers watching a specific program or a block of time.
You may want to measure an ad's impressions when purchasing ads as part of a brand awareness campaign. It's often easier for direct advertisers to buy based on impressions because they indicate how many people are estimated to see their commercial.
When determining your ads' cost, you can use impressions to value your average cost-per-thousand (CPM) for your purchase. This can help determine the efficiency of your buy. The formula to calculate CPM is to divide the cost by the total number of impressions divided by 1,000. The equation would look like this: 1,000 x cost / impressions = CPM.
What are Ratings?
You can also look at TV ratings that are calculated based on the percentage of viewers who may view a commercial.
Often, Nielsen ratings are used to measure TV ratings, ranging from 0 to 100 based on percentages. So, a Nielsen rating of 5 with Adults 18+ would mean that five percent of all viewers age 18+ in the DMA you are purchasing watch the program (or time period).
If you are using ratings as your campaign measurement, you are using the ratings to value the average cost-per-(rating)point (CPP). The formula to calculate CPP is to divide an ad campaign's total cost by Gross Rating Points (GRPs). You can define the GRPs by counting the number of people in a target market who may view the ad.
Impressions are Used in All Media Platforms
Impressions are becoming more useful when gauging the performance of TV commercials as TV continues to place more emphasis on impression-based advertising. Impressions help you determine how many times people may view your ads.
Impressions are best to use when looking at a campaign across different media platforms because all platforms use impressions. The methodology behind how impressions are measured may be slightly different across media platforms, but impressions give you the “eyeball” count for your campaigns.
Determine Which Metric is Best to Use for Commercials and Other Ads
Both impressions and TV ratings are potentially useful to look at based on the types of ad campaigns and platforms you want to use. You can use impressions to help measure generated revenue from TV and show how many times an ad has appeared. Meanwhile, TV ratings can show how many people your commercials are likely to reach—knowing which metric to look at and calculate can give you a better idea of your purchases' actual value.
Consider working with a media partner to help you break down TV ratings and impressions for optimal results.