The effectiveness of your advertising budget and allocation (mix) is measured by the awareness of your product in the minds of customers. You can track your Product’s Awareness rating and compare with competitors through the Market Summary report.
To influence your rating, you should increase your total Advertising expenditure, improve your Advertising mix and invest in Sales Promotion activities.
Each market segment responds differently to adverting expenditure. Customers in the Music and Fitness markets are sensitive to advertising, meaning investing in an effective campaign should result in increased demand.
To get the most out of your advertising budget you will need to know the media viewing habits for each market (being how much do customers watch/use the different media channels). Then, combine this Advertising Reach (what percentage can be reached for a given spend). This enables you to determine an optimal advertising mix across the channels, as well as how much to spend on each channel.
The table below provides the proportion of each market that can be reached using the different media channels:
The Advertising Reach chart shows the proportion of the viewing audience that can be reached in each media channel at different levels of expenditure.
For example, an advertising investment of $4 million in TV will reach approximately 40% of the audience. Then by looking at the Media Viewing Habits table above, we can see that this would then reach 40% x 97% = 38.8% of the Fitness market, and 40% x 85% = 34% of the Gaming market.
You will note that each media channel has a different shaped curve. Some are steep initially and then flatten out, such as Print. This indicates a high audience reach on small investments, but as you spend more the increase in reach decreases significantly. Alternatively, others feature a flatter curve, such as Digital Media. This means more investment is required to reach your audience, but the level of reach is relatively constant regardless of total spend.
Purchase the Audience Coverage and the Competitor Media Expenditure reports each year to assess how effective your advertising budget and mix were last year.