Provider: ARS Group
(Acquired by ComScore in 2010, then acquired by MSW●ARS Research in 2013; not audited since acquisitions)
Definition
APM Facts is a behavioral measure of TV advertising’s impact on consumer brand preference (choice) for specific ads that air.
Source Data
Using large (500-1500) randomly selected samples, brand preferences (choices) are collected before and after incidental, clutter exposure to TV material.
How Derived
APM Facts = % Brand Preference Post – % Brand Preference Pre
How Used/Activities
APM Facts is used to:
- Quantify likelihood and magnitude of TV advertising’s impact on future sales volume and market share for advertised brand and brand portfolio (halos), for next four weeks and next business quarter. [1]
- Quantify appropriate level of GRP spending for discrete executions to optimize media investments. [1]
- Allocate GRP spending for discrete executions within and across brands to optimize return for brand, division, company. [1]
- Evaluate the observed preference shift relative to the degree of difficulty, or average shift expected for the brand in its particular competitive environment. The expected shift is derived from measurement of three factors: 1) the brand’s size or % preference before exposure to the advertising; 2) the number of brands competing with it; and 3) the extent to which consumers in the product category normally switch brands from one choice occasion to the next. [2]
Strengths
APM Facts has withstood the test of time and been proven: Reliable, Relevant, Valid, Calibrated, Empowering, Hygiened. [1,3]
Limitations
Limited validation for “new to the world” categories
Relationship to Financial Metrics
APM Facts predict TV advertising’s impact on market results at ~.90 level when the TV activity is isolated from the other elements of the marketing mix (about as high a relationship as possible, given sampling probability). Within the context of other marketing activities, APM Facts predict TV advertising’s impact on change in market share at the ~.70 level. [4]
How Does It Meet the MMAP Characteristics of an Ideal Metric?
- Relevant . . . addresses and informs specific pending action
Is proposition strong enough to proceed with ad development? How much weight behind each ad to achieve desirable impact? [1] - Predictive . . . accurately predicts outcome of pending action
Predicts ad impact on quarterly sales volume and market share [1] - Objective . . . not subject to personal interpretation
What consumers choose post-ad exposure minus pre-exposure - Calibrated . . . means the same across conditions, categories & cultures
2 is a 2 and 7 a 7 in US, Latin America, Europe . . . for new, restaging, and established brands . . . no indexing or modeling in derivation [1] - Reliable . . . dependable and stable over time
Test-retest reliability @ >.90 over 3 decades [3] - Sensitive . . . identifies meaningful differences in outcomes
A 2-point difference is detectable, and a 2-point difference results in a 0.4 difference in quarterly market share [4] - Simple . . . uncomplicated meaning and implications clear
Level of impact on consumer brand choice - Causal . . . course of action leads to improvement
Improvement in return +83% to +130% on average [4] - Transparent . . . subject to independent audit
Furse and Stewart [5], Jones [6] - Quality Assured . . . formal/ongoing processes to assure 1-9 above
Systematic reliability and validity processes & management [1,3]
How Does It Fit Overall Guidelines for Measures of Marketing Productivity?
A. No measure or measurement system is complete without a specific link to financial performance.
APM Facts predict TV advertising’s impact on market results at ~.90 level when the TV activity is isolated from the other elements of the marketing mix (about as high a relationship as possible, given sampling probability). Within the context of other marketing activities, APM Facts predict TV advertising’s impact on change in market share at the ~.70 level. [4]
Measures of return on marketing investment should:
B. Reflect the standard financial concepts of return, risk, the time value of money and the cost of capital.
These relationships are consistent with standard business quarters for reporting. [4]
C. Provide information for guiding future decisions by predicting future economic outcomes as well as provide retrospective evidence of the impact of marketing actions.
APM Facts predict the return of TV advertising (impact on sales, share, market value) plus risk/opportunity of alternative investments / ad plans. [4]
D. Recognize both the immediate, short-term effects of marketing actions and longer-term outcomes, as well as the fact that short and long term effects need not be directionally consistent.
APM Facts predict TV advertising’s impact on market results at ~.90 level when the TV activity is isolated from the other elements of the marketing mix (about as high a relationship as possible, given sampling probability). Within the context of other marketing activities, APM Facts predict TV advertising’s impact on change in market share at the ~.70 level. Also related to market value over time. [4]
E. Recognize the difference between total return on investment and return on marginal return on investment.
A difference of just two APM Facts is associated with a +0.5 market share increase over a 4-8 week period and +0.4 market share increase over a business quarter. From long-term study, a difference of just +1.2 points (+3.3 to +4.5) takes a brand from a sales decline to a “modest” sales increase over a five-year period. A further improvement of +1.2 points (+4.5 to +5.7) leads to “substantial” growth over a five-year period. [4]
APM Facts is predictive of incremental impact and total impact on volume (as determined by MMM). [4]
F. Recognize different products & markets produce different rates of return.
N/A
G. Distinguish between measures of outcome and measures of effort.
APM Facts is a measure of outcome and TV advertising effectiveness.
H. Provide information that is meaningful and comparable across products, markets, and firms.
APM Facts is calibrated across brands, categories, and countries.
I. Clearly identify the purpose, form and scope of measurement.
N/A
J. Be documented in sufficient detail to allow a knowledgeable user to understand their utility & make comparisons among alternative measures.
Predictive of TV advertising’s impact on future brand preference, sales, market share and market value.
K. Be assessed relative to generally accepted standards of measurement development and validation.
30+ years of documented RRVCE (Relevance, Reliability, Validity, Calibration, Empowerment)
L. Be recognized as necessary investment for assuring sound decision-making, accountability, continuous improvement, and transparency for all stakeholders.
Been managed to generally accepted RRVCE standards, subject to independent academic audits, and meets characteristics of an ideal measure. [7] While recognized as necessary by the provider, still viewed as a marketing expense, expensive, and not necessarily necessary by the buyers.
Source Documents
1. Summary of ARS Group’s Global Validation and Business Implications — 2004, 2005 and 2008 ARS Group updates.
2. ARS Validated Drivers and Diagnostic Measures — 2005 & 2008 ARS Group updates.
3. Global Reliability of the ARS Persuasion Measure — 2005 & 2008 ARS Group updates.
4. M.H. Blair and A.R. Kuse, “Better Practices in Advertising Can Change a Cost of Doing Business to Wise Investments in the Business.” JAR — March 2004.
5. D. Stewart and D. Furse, “Effective Television Advertising.” Lexington Books, 1986.
6. J.P. Jones, “How Advertising Works: The Role of Research.” Sage Publications, 1998, pp. 160-169.
7. A.R. Kuse, “Characteristics of an ‘Ideal Metric’ and Practices.” MASB 2010 Winter Summit.
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