The document discusses evaluating the effectiveness of advertising investments. It covers: 1. ROI evaluation considers investments (costs), returns (results), and time (timeframe to achieve results). These factors are often underestimated. 2. Effectiveness is also measured by evaluating the efficiency of individual communication tools/channels. 3. Key recommendations are to fully account for all investments, simultaneously measure sales and brand metrics returns, leverage time as an ally, and differentiate key performance indicators for management versus technicians.

1. An Old Refrain
THE DESIRE to measure the effectiveness of advertising has existed for a long time. In 1990, texts on KPI
were already been published. At the same time, the massive use of econometric models for marketing and
media planning was on the rise. In conjunction with the growth of the digital realm, also attribution
models came into play, and are nowbeing utilized for several years. All these are paramount elements for
evaluating the performance of communication expenses, and for anticipating successful solutions. ‘KPI,
econometric and attribution models’ are still on the increase as Google search hits. There is boundless
literature, in which the customer journey is always pivotal. Where do we stand? And most importantly,
which way should we be heading?
The two approaches
The analysis of communication effectiveness has two different objectives:
1. to assess whether the investment has actually generated a return greater than the costs;
2. to verify the efficiency of each tool.
In the sea of technicalities in which advertising control often drifts, there are some key points that can
change the perspective, and consequently, the result.
These variables are obvious, and therefore often underestimated. Let us begin from the most extensive
and important standpoint: the return on investment.
1. Return on investment evaluation
In a business perspective, the return on investment must be higher than the costs.
Whether print, digital, or OOH, the goal remains the same. If I spend 100, I wish to get an overall return of
at least around 104-106, hoping to reach the final 115-120, net of inevitable mishaps.

2. Getting a high return on investment may appear easy, or conversely, an impossible challenge. It all
depends on many factors, as per many specialized texts (eg. https://www.amazon.com/Long-Short-
Balancing-Long-Term Strategies/dp/085294134X)
From my side, I would like to focus on three simple, intuitive and neglected variables, often influencing
ROI results. They are:
a. Investments (ie: the costs we decide to enter)
b. Return (the result we expect to achieve)
c. Time (the timeframe in which the result is achieved).
a. Investments
All communication expenses are grouped under the entry ‘investments’.
The number of relevant entries has considerably increased over the years: from the creativity + media +
production trio, to an articulated list including different areas of specialisation.
“Today, as we know, communication requires more speed, tools, knowledge, and longer
working hours than ever before”.
Has the ROI evaluation in the digital era changed?
In some ways, yes. With regard to advertising expenses, nowadays a more important role is played by
those relating to technology and control. As it always happens in times of fast and continuous evolution (as
it also was in the 80's), operating costs increase too.
Consequently, there is an increase of investments needed to ‘catch up’ with the fast developing market.
In order to reach the same number of people, more working hours, technology, control, and of course,
more speed than in the past are needed. But we can reach the communication recipients better than
before. We said that we 'can’ do it, not that we 'manage’ to do it.
In fact, the ROI helps to understand whether the possibility has actually turned itself into concrete facts: if
the investment has been profitable, with actual results higher than costs.
b. Return
Giving a rundown to the point of an excessive simplification, effective commercial communication provides
the following results:
q purchase in the short term
q brand strengthening (which in turns also contributes to the purchase, and whose financial return is
merely deferred)
q all of the above.
Of these three results, it is actually the the third - the mixed one - that comprises the largest number of
investments: on one hand, it generates an immediate increase of purchases, and on the other hand it
spreads their financial return over time (contributing to what we usually refer to as brand equity).

3. The overall evaluation of the success of a commercial communication takes into consideration the
monitoring of both systems: sales increase and brand-related values. Therefore, a comparable KPI system
is necessary, including both purchase metrics, and the other defining brand equity indicators.
Before venturing into the complex world of brand equity, let’s just combine the sales indicators to the
branding ones, expressed through the two fundamental KPI:
• brand awareness
• brand profile/reputation
c. Time
At this point a question arises: what is the timeframe needed to measure results?
Time is the necessary variable in order to frame the period in which to obtain and evaluate results.
As we know, communication can act differently depending on its defining variables. Measuring success
does not only mean setting objectives, but also setting deadlines (and therefore, identifying tools to be
used).
Not making clear about when we want to get results means not being able to evaluate the effectiveness of
commercial communication. If measured at the wrong time, a sure success can appear as a failure. And
viceversa.
In fact, time has at least 4 connotations, which directly influence communication performance:
First: experiential
Rosati states "time is the fabric that shapes experience" (1). Digital reality has increased the possibility of
playing around with space and time. Setting a time limit means to focus on suitable options, and better
exploit their potential.
Second: commercial
The ability to buy at competitive prices is strongly related to time. Available time to identify the most
cost-effective solutions, time for negotiations, and time constraints (calendar)
Third: media planning
The paradigm shift is important. Shifting the attention from start to finish. From output to result. From
the moment we want the commercial communication to start, to the one when performance will be
measured.
Besides, the time variable seems to have revolutionized all fields of knowledge but traditional media
planning, which moreover is still underperforming in standardizing the temporal metrics of research.
Fourth: company policy
Launches, seasonal purchasing, restocking, stock prices, and also headquarter deadlines make it necessary
to gather the first evidences before specific dates.
Therefore, the return on investment cannot disregard the time variable, which is actually the most
important element of all. An example of the importance of the time? Try to imagine how differently setting
a deadline or not setting it, whether it is about work, love or sports, can impact our lives.

4. 2. The efficiency of communication leverages
Measuring the efficiency of communication leverages is standard practice also in Italy. Although what is
missing is often the ability to organize information and put it in order of importance according to
objectives.
In companies and agencies (but also on the desktop of an independent professional like myself), there is
often a binge of numbers that loses sight of the ultimate goal of the measurement: understanding whether
we have reached our goal. This is accompanied by an opposite reaction: the absence of verification due to
lack of time.
Therefore, if it is true that companies and agencies should have in place an automatic calculation system
for all communication indicators (performance indicators are much more stable than one would think), it is
only the choice of the objective that determines the main KPI. An indicator which is important to get in a
brief time period, and which requires daily updates in order to monitor real time efficiency of the utilized
lever.
In conclusion: 4 recommendations
The desire to measure the effectiveness of commercial communication is as old as advertising. The market
has capitalized important contributions, but only when a large number of businesses will be willing to feed
and use big data, clear answers will become available.
Meanwhile, we can make good - very good - use of metrics and tools at our disposal.
As far as I am concerned, here are 4 recommendations that I would insert in business Best Practices:
q Investments? all items included
q Returns? simultaneously monitoring both sales and branding
q Time? let's make it the best ally of our communication
q Key Performance Indicators? let’s differentiate them.
A few for the management, in order to assess the achievement of global objectives. Many more
for technicians, to evaluate the efficiency of each leverage.
Thank you for your attention and best wishes to all
Paola Furlanetto Dec 2016
(1) on time: post by Luca Rosati, ‘Playing with time. Time and user experience design’; Joseph Pine and Kim
Korn, ‘Infinite Possibility’.
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