Westwood One

What if Brand Advertising Was Based On “Cost Per Result” Rather than “Cost Per Thousand”?

The marketing effort behind the recent July 15th Amazon Prime Day Sales event provides some interesting data on how media can efficiently build awareness in a target demo.

 

Amazon bought online, radio, and television ads to promote the event. According to an Ipsos study, the engine of Amazon Prime Day campaign were 18- to 34-year-olds. Nearly half of those who purchased on the July 15th sale event were 18 to 34. Ipsos indicates 45% of those with Amazon Prime accounts are 18 to 34.

 

Ipsos reported that radio advertising was the most effective at converting awareness into Prime Day purchases when compared to TV and online. Of those exposed to radio ads, 52% made a purchase versus TV (39%) and online (48%).

 

HOW DID MEDIA DO AT TARGETING 18-34s?

Much of Amazon’s 1,329 TV ads placed were in young-skewing TV programs and networks. According to iSpot TV — the lightning fast commercial ad occurrence service — a large number of ads ran on Nickelodeon (255), Cartoon Network (221), BET (84), MTV (56), VH1 (46), Comedy Central (20), and ABC Family (16). iSpot TV says Amazon also bought the three major broadcast networks, as well as A&E, AMC, USA, FX, and OWN.

 

So how well did TV target 18- to 34-year-olds? Not so great.

 

According to Ipsos, of those who recalled seeing the television campaign, only 27% were 18 to 34.

How did online media fare at hitting 18- to 34-year-olds? Somewhat better than TV. According to Ipsos, 35% of those who recalled the online campaign were 18 to 34.

Which media had the highest concentration of recall among 18- to 34-year-olds?

 

Radio. Radio?

 

Yes, Radio.

 

Forty percent of those who recalled the Amazon Prime Day radio campaign were 18 to 34.

Overall, Amazon purchased $1.4 million of radio in about 65 local markets, according to an analysis by the commercial monitoring firm Media Monitors.

 

Similar to the TV campaign, Amazon targeted its radio campaign to younger-skewing programming. About half of the spend was concentrated in Top 40, Country, Adult Contemporary, and Classic Rock, according to Media Monitors.

 

So, for every dollar Amazon spent against 18-34s, radio delivered 40 cents, online 35 cents, and TV just 27 cents.Those reached by the radio campaign had the greatest composition of Amazon Prime’s core 18 to 34 demographic.

 

WHICH MEDIUM DELIVERED THE BEST 18-34 ‘COST PER RESULT’ FOR AMAZON PRIME DAY?

iSpot TV says $6 million was spent on the Amazon Prime Day TV campaign, which ran on network cable and broadcast television July 6 through July 15. Media Monitors finds that Amazon spent $1.4 million on local radio. As of this writing, there are no estimates for the value of the online ad campaign.

 

For any major sale event, advertising must create awareness of the event. Erwin Ephron, the father of modern media planning famously said, “reach is media’s gift to advertising.”

 

COST PER RESULT = COST PER AWARENESS AMONG 18-34s

For its $6 million on network cable and broadcast television, Amazon Prime Day earned a 34% TV ad recall among 18-34s, according to the Ipsos survey. For its $1.4 million spent on the radio spot campaign, Amazon Prime Day earned a 14% radio ad recall among 18-34s.

 

For Amazon Prime Day, radio’s cost per 18-34 awareness point ($100,000) was far more efficient than television’s ($177,000).

Radio was most effective at converting awareness into purchases and targeted 18-34s the best.

Despite Amazon’s TV ads running on young-skewing TV networks, radio’s ad awareness was far more concentrated among 18 to 34s versus television’s (40% versus 27%).

 

Radio’s “cost per awareness” was nearly twice as efficient as television.

Given that radio was the most effective at converting awareness into purchases, imagine how much more impressive the campaign results would have been if Amazon had purchased a more aggressive national radio campaign?

 

Direct response advertising is assessed based on results and sales. What if brand advertising were evaluated on cost per awareness rather than CPM? If that were the case, marketers would fall in love with radio’s dominant reach, targeting, and efficiency. What a thought!

 

Pierre Bouvard is Chief Marketing Officer of Cumulus Media | Westwood One