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Ad Effectiveness: A Glossary of Important Terms

Posted On  February 17, 2020
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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, here are the most important terms to know about digital advertising effectiveness. Click on the 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)

Brand funnel | Brand perceptions | Brand vs. Product advertising | Conversion | Cross-channel | Engagement | Exposed/Unexposed | Frequency | Lift | Multi-Touch Attribution | Performance marketing | Randomized experiment | Reach | Recall | Recency | Representative sample | Walled gardens | Weighting

Digital advertising methodology

Exposed/Unexposed

Did a given individual view an ad or not? A core component of measuring ad effectiveness is comparing performance metrics associated with those exposed to an ad – including 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. Also called randomized control experiment.

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

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 over- or underrepresented.

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

Ad measurement and metrics

Brand funnel

A framework that breaks down the consumer journey towards the purchase of a product or service into stages of a relationship with a brand, from first awareness to continued loyalty and advocacy. Advertising effectiveness can be measured by its ability to influence consumers’ movement through the journey.

Typical metrics may include:

Brand awareness

Consumer consciousness of a specific brand and association with a product or offering

Familiarity

A deeper level of knowledge of a brand than awareness, with more clarity on the differentiating value

Favorability

Describes if consumers feel positively about a brand, and to what degree

Consideration

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

Preference

Measures the consumer inclination to choose a brand over competitor brands

Loyalty

Measures how dedicated customers are to a brand or product

Advocacy

Customers’ likelihood to recommend a brand to someone

Brand Perceptions

Qualities or values customers believe a brand represents. 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 customers come away with.

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.

Boils down to how and how much an audience is interacting with your ad content. 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, or 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

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, and understanding the difference.

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

Multi-Touch Attribution (MTA)

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 journey, 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

Describes marketing across the different touchpoints users may have as they research and convert, including online channels like search and social, but also 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 advertising may have objectives less tied to action, such as building awareness, and payment may be based on impressions.

Walled gardens

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

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

Insights Director, Digital Analytics
Michelle is fascinated by what our digital behavior reveals about us as humans. She has 8+ years’ experience in digital marketing, developing a focus on data-driven user experience design and A/B testing. A Texas native, she has a M.S. in Information Science from the University of Texas at Austin and completed her undergraduate work at Rice University. In addition to analytics, her passions are cycling and reading.

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