Aug 03, 2022
In Welcome to the Forum
Half of my advertising dollars are wasted, but I just don't know which half." This decades-old quote from retail mogul John Wanamaker illustrates the difficulty of measuring advertising effectiveness. Indeed, as an important link in economic operation, how to measure the effect of advertising has always been the focus, focus and difficulty of the industry. Before diving into this topic, let’s take a look at how ad performance measurement has changed. 1. The long history of advertising effectiveness measurement Modern advertising first emerged and prospered from the United States. In 1923, the famous American advertising man Claude Hopkins published a very important book in the field of advertising - "Scientific Advertising", which systematically expounded his views on effect advertising. The effect school in the advertising industry has invented a series of advanced advertising methods such as coupons, free trials, mailing catalogs, and test marketing. For example, in order to compare the effects of two advertisements, he will print the two copies on the same page of the same newspaper but leave different mailing addresses for free samples, and then count how many requests for free samples have been received by the two copies. This is pretty much the earliest and most accurate measure of performance in the advertising world. Hopkins sharply criticized another genre of advertising at the time, the art school, saying: "There are advertisers who give up their responsibilities, they forget they're a salesman and see themselves as an actor, and they start looking for applause, not sales." His ideas had an important influence on the follow-up famous advertising man David Ogilvy, who famously said in "Confessions of an Advertising Man" - "We advertise to sell products, otherwise we will It's not advertising." In his view, whether or not it can eventually generate sales is the standard for measuring the quality of an advertisement - "The difference between one advertisement and another is measured by the scale of sales power, and their difference can be 19:1. " In a sense, Ogilvy was doing "performance advertising" of that era. Therefore, unlike many people's perceptions, traditional advertising is not a field that relies entirely on creativity, genius, and inspiration. The leaders in this field have focused on the measurement of advertising effects very early on. Of course, the advertising effect at that time was still only an after-the-fact measurement, and was not directly related to the cost of advertising. The real direct correlation between advertising effect and advertising consumption will have to wait until the great Internet era. 2. Measurement of Advertising Effect in the Internet Age The birth of the Internet is undoubtedly a technological revolution for advertising. It has changed the billing rules of advertising, redefines the accuracy of advertising, and brought a qualitative leap to the measurement of advertising effects. First of all, the first change that the Internet has brought to advertising is pay-per-performance. Why can't traditional advertising do this? The reason is that although traditional advertising also focuses on advertising effects, the advertising effects at that time are relatively vague and difficult to actually quantify. The meaning of the Internet is to digitize the entire process of advertising. This data-based process allows each link of advertising to be quantified and measured. The direct result of this precise measurement is pay-for-effect. As a result, CPC, the earliest billing method of pay-per-effect, was born—users pay for clicks, and they don’t receive money if they don’t click. Note that with pay-per-performance, there is also a new advertising settlement model - bidding. In fact, pay-for-performance and bidding telemarketing list are twin brothers that appear together. The underlying reason behind this is that pay-for-performance is essentially in conflict with the maximization of the interests of advertising media. For example, an advertiser pays 1,000 yuan and asks for 1,000 clicks, which is equivalent to 1 yuan per click, but if he gives a bad material, the click-through rate is very poor. Then in order to achieve these 1000 clicks, the advertising platform needs to give unlimited traffic to achieve the goal. If the purchase is not made according to the bidding price, the advertiser has no motivation to optimize the advertising creativity. With the further development of the Internet, the connotation of "effect" in pay-for-effect has gradually become richer. Since clicking can be called an effect, can it be installed, activated, and paid? The answer is yes, as long as advertisers can obtain these data. Some of the above-mentioned deep-level effect data are owned by the platform itself, and some are returned by advertisers. In short, for effect measurement, Internet advertising can go all the way to the very end of the conversion chain.