Foundations: Using Cost-Per-Thousand (CPM) as a Common Metric

Before we delve any further, let’s establish a common ground for evaluating media channels. For this, we will use the “Cost-Per-Thousand” (CPM) metric, a universally accepted metric which allows you to compare the cost of reaching 1,000 people across all media types, whether online or offline.

By utilising CPM, we can gain a clearer picture of the comparative costs of media across all your channels. With this metric, we can measure and analyse the price of a TV ad spot, an OOH billboard, and a social media campaign (as examples) and get an accurate cost comparison against each of them.

Media by Purpose: Segmentation

To fully capitalise on your budget, you’ll need to understand the differing goals of each media channel. We can do this by segmenting our analyses into two main categories:

1. Awareness/Reach Channels:
   These generally consist of the more traditional platforms including TV, radio, and large-scale digital display ads.
2. Direct Response/Conversion Channels:
   These focus on driving specific actions and are generally associated with more social-oriented channels. Think of actions such as click, sign-up, or purchase buttons that you see on social media adverts. Additionally, search ads and email marketing also fall under this category.

It is important to remember that when comparing CPM, make sure that you compare it within either of these groups, as comparing awareness campaigns with direct response campaigns is like comparing two completely different entities entirely.

The Key to Effectiveness: Frequency Optimisation

Although reach is vital to any successful campaign, it is frequency that ensures your message sticks. For the majority of campaigns, you’re looking at a minimum of three impressions per week as the general goal that’s recommended. However, you also need to balance this with not blanketing your audience indiscriminately. 

Balancing Frequency Across All Channels

• Evaluate the distribution of content across channels, aiming for adequate reach while preventing audience fatigue.
• Streamline your content distribution to prevent duplicate exposure. If a customer is heavily reached on social media, reconsider repeating the same message on YouTube.

Contextual Targeting: Population and Budget

• Not only does your effectiveness rely on CPM and frequency, you also need to take into account the scale of your target audience. By considering the size of the population in your target areas, you can allocate your budget accordingly and more effectively.

For Example…

• Imagine you're aiming for a 500,000-person city. First, figure out how many times people need to see your ad to ensure sufficient impact. Next, adjust your spending, but keep in mind that ads in densely populated cities cost more than more sparsely-populated small towns.
  

From Theory to Practice: Building Your Model

In reality, no media attribution model is perfect. The general consensus is that most rely on assumptions, however, while they can offer some useful insights, they often fail to provide you with the full picture.

Instead, it is best to adopt a more practical, marketer-led approach:

1. Establish baseline performance metrics by analysing past campaign data, focusing on key indicators like CPM, reach, frequency, and conversion rates.
2. Implement A/B testing in future campaigns. Alter specific factors like frequency, awareness levels, or CPM benchmarks, and carefully observe the outcomes.
3. Document your findings and use them to continuously refine your model, adapting it to your specific audience and campaign objectives.

In Summary

Effective media mix optimisation doesn't require complex systems or costly software. Simply leverage CPM as your core metric, categorise channels by function, maintain ideal ad frequency, and align your budget with audience size for a practical, results-driven approach. 

Ultimately, optimisation is a continuous journey. By proactively managing your media strategy, establishing performance standards, and iterating based on data, you'll develop a tailored model that drives your brand's success!