This page discusses seven popular advertising metrics that measure what you did; that is, where and how you spent your budget.
Media planners use these seven metrics before a campaign. They also use them after a campaign, for analytical purposes. The metrics remain part of the permanent record of the campaign and help media planners make increasingly better decisions in future campaigns.
These seven advertising metrics are all navigational metrics. That is to say, they can help you steer your program toward higher profitability, by indicating which tactics worked better than others, which lists worked better than others, and so on.
This information in turn will cumulatively help you more effectively gain your prospect’s awareness, engagement, understanding, belief and favor, which – generally and theoretically, and depending on the soundness of your overall marketing strategy – will result in higher profitability. That is, it will deliver a higher Return on Investment (ROI), often called Return on Marketing Investment (ROMI).
Here are the seven navigational metrics I mentioned:
Reach is a measurement of the size of the audience
to whom you will communicate. Frequency is the average number of times your ads will
be shown to an individual or household. These are basic metrics
used almost universally by advertisers of all sizes.
Gross Rating Points (GRPs) equal Reach times Frequency. If you are new to advertising, you will probably notice that this is one of the more frequently used phrases in the office. Target Rating Points (TRPs) are Gross Rating Points times the ratio of the specifically targeted audience to the total audience.
Impressions equal the number of exposures of an ad or commercial to people or households in your audience. Cost per Thousand (CPM) is the cost to reach 1,000 people or households. Cost per Point (CPP) is the cost to reach one percent of the audience.
See the Marketing Metrics List for a complete enumeration of all the metrics (both advertising and PR) discussed on this site. The list indicates which metrics are navigational metrics and which ones are evaluative metrics.
For a description of the difference between institutional and direct-response advertising (a crucial difference but sometimes overlooked by advertisers and often by top management), go to Types of Advertising.
To measure your actual profitability, you need evaluative metrics. Evaluative metrics can measure profitability; they can identify increased revenue or decreased costs that resulted from your program. That is to say, they can put a dollar value on your program.