Ad Effectiveness: A Glossary of Important Terms

While it’s hard to wrap your head around all that’s changing in today’s digital landscape, one thing remains consistent: advertising serves as the voice of a brand, helping define its market positioning and its value proposition. As brands shift their media dollars to digital channels, they get greater visibility into conversion rates and other digital behaviors, as well as the ability to optimize campaigns mid-flight.

But are brands optimizing against the right outcomes? Advertising should do more for your brand than just drive clicks; it should also drive your longer-term brand health.

To truly understand advertising effectiveness, brands need to combine consumer feedback with behavioral outcomes to paint a more holistic picture of what to say and where to say it. That requires sophisticated tools to measure consumer engagement, emotional response and brand perceptions. And once a campaign launches, brands need visibility into what customers see, what they hear, how they feel, what they say and what they do. Measuring these dynamic components requires the ability to ask, to listen and to observe.

For those looking to better understand this space, we’ve compiled a list of must-know advertising effectiveness terminology. Click on the ad effectiveness term below to jump to its definition, and check out our ad testing and ad targeting glossaries for even more digital analytics knowledge.

(terms listed alphabetically and in groups of ad targeting categories)

Digital Advertising Methodology

Exposed/Unexposed

Exposed refers to an individual viewing an ad; unexposed means the individual didn’t view it. A core component of measuring ad effectiveness is the comparison of performance metrics associated with exposed individuals – including the number and time of exposures – versus those unexposed.

Randomized experiment

A research method that splits consumers into two groups at random, giving one group the experimental treatment – in this case, exposure to ads – and withholding it from the other in order to understand the impact of the treatment. It is also called a randomized control experiment.

With an adequate sample, randomized experiments are a robust way to accurately measure the impact of an ad, since other factors are controlled.

Representative sample

A subset of a population that reflects the characteristics of the larger group. A representative sample enables the study of ad effectiveness in the most efficient yet accurate manner. It ensures that analysis and insights of a small group will hold true to the real world, within a margin of error.

Weighting

A correction technique to adjust representation of characteristics in a sample. Frequently, samples don’t match characteristics of a larger population, with some groups being over- or underrepresented.

Data for persons underrepresented are given a weight larger than 1, and those over-represented get a weight smaller than 1. This is to make the sample more representative of the whole.

Ad Measurement and Metrics

Brand funnel

A framework that breaks down consumer journeys. The more a customer interacts with a brand, the further down the funnel they progress. The journey through the funnel is typically broken into several stages – from initial awareness to continued loyalty and advocacy. Advertising effectiveness can be measured by its ability to influence consumers’ movement through the funnel.

Typical metrics may include the effective advertising terms:

Brand awareness – Consumers’ consciousness of a specific brand, and their association of the brand with a product or offering

Familiarity – A deeper level of brand knowledge, with more clarity on its differentiating value

Favorability – Consumers’ positive or negative feelings about a brand, and the degree of those           feelings

Consideration – The percentage of consumers who would consider a specific brand when making a purchase

Preference – Consumers’ inclination to choose a brand over competitor brands

Loyalty – How dedicated consumers are to a brand or product

Advocacy – Customers’ likelihood to recommend a brand to someone

Brand Perceptions

Qualities or values that customers believe a brand represents. They are also called equities. Brand perceptions are distinct in that they come from customers.

A brand may distinguish itself through logos or high production values in its communications or by sharing its mission, vision and culture, but perceptions are about the impressions that stick with customers.

Conversion

When a person completes an action valuable to the business, such as signing up for emails or completing a purchase online.

Conversion is typically the most important metric when evaluating ad performance. While ad engagement may be desirable, conversion directly ties the ad to business outcomes.

Engagement

An overarching term that includes most trackable behaviors related to an ad, social platform or website.

Engagement boils down to how an audience is interacting with your ad content, and how much. It could mean clicks on an ecommerce website that demonstrate shopping actions, or it could mean likes and shares on a social platform.

Frequency

The number of times a person has seen an ad. Generally, people need to see an ad multiple times to absorb its message. Effective frequency – the number of times needed for the ad to be successful in its objective – depends on many factors, including how well known the brand is and what the objective is.

Lift

A statistical analysis that measures the ad impact of a key metric, such as sales or engagement. There are several methods to measure the impact of an ad, but they typically involve comparing performance between people who have seen the ad and those who haven’t seen the ad.

Brands are looking for lift to see if the ad drives an uptick in a performance metric.

Multi-Touch Attribution (MTA)

This ad effectiveness term is a method of measurement that tracks marketing touchpoints for a brand or campaign and assigns value to each touchpoint’s contribution to conversion. The value assigned to touchpoints may vary and depends on the goals of the campaign.

MTA accounts for the complexity of today’s consumer journeys and assigns credit across marketing channels for driving success. For example, someone may see an ad on Facebook, two display ads and a TV ad before buying the product in question.

Reach

The number of people who have an opportunity to see an ad. Reach is similar to impressions, in that it’s a measure of the breadth and quantity of ads being served; however, reach is de-duplicated to account for people seeing an ad multiple times.

Recall

A measure of effectiveness in which respondents exposed to an ad are asked if they remember the ad. Measures like ad recall help determine if ad creative is breaking through to people’s attention. It can be aided, meaning cues are given to prompt the person’s memory, or unaided.

Recency

A measure of how long it’s been since something happened. Ad recency measures how long it’s been since someone saw an ad. Measuring ad effectiveness is more accurate when consumers are surveyed soon after seeing an ad.

Digital Advertising Strategy

Brand vs. Product advertising

Brand marketing refers to efforts to build and maintain a company’s image and values, and key measurements include consumer perceptions. Product marketing is more focused on specific product features and promotions available, and its impact is more readily seen in short-term sales and revenue.

Neither type of advertising is inherently better, and ideally each is leveraged at different times to contribute to greater, holistic performance. A typical mix may look like: 60% product advertising, 40% brand advertising.

Cross-channel

Marketing across the different touchpoints that users may visit as they research and convert. This includes online channels like search and social, as well as offline channels that may produce data that can be combined with digital data.

Cross-channel tracking and measurement anticipates how people interact with brands across different touchpoints to drive a cohesive brand experience. It requires the strategic management of data to recognize and optimize customer journey traits, such as who is visiting a website from a customer loyalty program or who is interacting with the brand for the first time.

Performance marketing

Advertising programs where advertisers only pay when specific outcomes occur, such as pay-per-click ads in paid search advertising.

Performance marketing has a high level of accountability in driving its objectives, and ongoing measurement and optimization are table stakes. In contrast, brand marketing may have objectives less tied to action, such as building awareness, and payment may be based on impressions.

Walled gardens

A closed platform in which all operations are controlled by platform operation. For example, data is available for use within the platform but not accessible to outside systems through typically available means, such as API calls. This creates a secure information system – and a monopoly on certain types of ad data.

Google and Facebook are the most relevant examples of walled gardens. They offer vast collections of consumer data within their respective advertising platforms, but they strategically restrict access to this data to everyone except those who pay to advertise with them.

Want to make the most out of your digital advertising?