Fact or Fiction: Advertising That Guarantees Sales Lift

So far, we’ve talked about the future of TV ratings in a blog entry back in April, and new systems being put into place by Nielsen to measure online ratings, about a month ago.

One medium we haven’t really discussed in terms of measurement: print media, specifically magazines.  Well, Nielsen is at it again, this time teaming with magazine publisher powerhouse Meredith to develop a new measurement system that will help Meredith guarantee that their magazine buys will yield an increase in sales of products or services.

This is an unprecedented step for the magazine industry, and one intended to help magazines compete with digital media in terms of ROI and tracking how a particular medium affects sales.  This is of course the so-called holy grail of advertising – we all know that advertising works, but more and more, advertisers want to understand exactly how each piece of their media plan drives sales.  As we move further into the 21st Century, these types of ROI measuring systems will become more and more commonplace for all media types.  Media owners who embrace ROI measurements will be able to take a larger share of advertising dollars by doing as Meredith is doing – proving that their medium directly impacts the bottom line.

So, how does this new measurement from Meredith, called the Meredith Dividend Engagement, work?  It’s based on using data from Nielsen’s Homescan, a national panel of over 100,000 consumers who have agreed to let Nielsen track their product purchases.  As noted in MediaPost, the measurements are built on a similar platform first used to measure digital advertising by Yahoo! with Consumer Direct.

In the past, magazines have been measured on their target reach, and also on factors such as “engagement,” and “purchase intent.”  The Meredith Dividend Engagement goes beyond these measures to actually guarantee that advertising in their titles will result in a certain amount of sales lift, with a promise to make up any sales shortfalls with additional free advertising.

There are, of course, some caveats, but all of them make a lot of sense at these initial stages: the guarantee is based on a minimum frequency commitment over a 12-month period across several Meredith titles on a national level only.  The frequency commitment differs based on the category of the advertiser.

The new guarantee by Meredith is new, so time will tell how well it works.  Initial research conducted by Meredith and Nielsen was very encouraging – advertisers in the categories of beauty, food, household goods, and OTC drugs increased sales by an average of 10% by advertising in Meredith magazine titles.

We fully support Meredith leading the charge toward helping the magazine industry prove its value as a powerful advertising medium.  One of our previous clients was very fond looking at our recommendations to utilize specific media types and then asking us in meetings, “Well, what does it get me?”

We’re looking forward to the day when we can use ROI measurements like the Meredith Dividend Engagement and say with confidence, “An increase in your sales of 10%.”

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