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Valuation Glossary
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    · Audience Valuation
    · Efficiency Plot
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    · Audience Efficiency
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Audience Value Efficiency

Using valuation audience , we know that not all adults 18-49 are the same, nor do they have equal potential in responding to ads for an advertised products. Based on their demographic and psychographic characteristics, it is possible to assign a value that measures their potential for becoming a customer of an advertised product after being exposed to an ad.

An ad is relatively efficient if the audience for the ad is composed of a proportionally large number of highly valued people compared to the total size of the purchased audience. In other words, ads should be placed in locations where the audience has a large number of valuable adults 18-49 compared the total number of adults 18-49 that are being paid for.

In order to rank programs according to their audience efficiency, we compute the audience value efficiency by dividing valued impressions by the number of impressions for the demographic group. In other words, we divide the number of impressions of value by the number of impressions that cost. It answers the question

"How many impressions of value did we get for every conventional impression that we bought?"

It is a measure of how well a program audience matches the customer profile for an advertised product. A higher value indicates a better match.

Audience Value Efficiency
  Day Time Day Part Type A1849
Impress
A1849
Valued
Impress
Value
Efficiency
A18-49
1 Wed 6:54 PM EarNew News 86 89.5 1.04
2 Thu 6:39 PM EarNew News 83 86.9 1.05
3 Fri 6:53 PM EarNew News 67 78.9 1.18
4 Thu 9:24 PM PriTim Movie 65 29.7 0.46
5 Thu 11:03 PM LatNew Movie 47 18.3 0.39
6 Tue 8:34 PM PriTim News 31 22.3 0.72
7 Thu 10:51 AM MorDay Movie 29 17.8 0.61
8 Sat 3:13 PM SatAft Sports 27 16.4 0.61
9 Sun 7:58 PM PriTim Reality 27 11.6 0.43
10 Sat 8:44 PM PriTim Movie 25 19.2 0.77
11 Fri 7:05 PM PriAcc Drama 24 16.7 0.69
12 Sat 10:44 PM PriTim Drama 23 15.3 0.66
13 Sat 11:23 AM SatMor News 23 20.2 0.88
14 Fri 12:38 PM AftDay News 22 16.0 0.73
15 Fri 7:20 PM PriAcc Comedy 19 11.2 0.59
16 Wed 9:20 PM PriTim Drama 19 13.8 0.73
17 Sun 11:54 PM WeLFri News 19 10.4 0.55
18 Sun 7:10 PM PriTim Reality 18 10.0 0.56
19 Fri 8:58 PM PriTim News 18 10.5 0.58
20 Wed 11:04 PM LatNew Drama 17 14.8 0.87

The table above shows a portion of an advertising campaign ranked by the number of sample impressions for adults 18-49. It also shows the number of valued impressions, and the value efficiency for each of the ads based on the same assigned values described in Audience Valuation .

The most efficient ads are not necessarily those with the greatest number of impressions. The efficiency for the ad in row 6 at 0.72, for example, is almost twice the efficiency of the ad in the row above it, which had an efficiency of only 0.39.

The audience value efficiency is a convenient way to measure the effectiveness of the ads in an advertising campaign when unit costs are not readily available to compute CPMs of value .

As the table indicates, the audience value efficiency of an ad can be either less than or greater than one. For example, if we buy ads based on adults 18-49, but are targeting only upscale adults of the same age, then the value efficiency will always be less than one. The number of impressions for upscale people will never be greater than the total number of impressions for all people in the age group.

The value efficiency number could be greater than one if we buy ads based on a narrow demographic group, but are targeting people in either a broader group or entirely different group. Again, suppose we buy on adults 18-49 but are seeking an older audience for a particular product. If a program skews old then it might be possible to have more impressions in our older group than are in the 18-49 group, in which case the efficiency will be greater than one.



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