How to set a benchmark for your advertising campaigns?
Launching advertising is great and all, but measuring their performances is even better. You can analyze your raw results, but how can you tell whether you’re doing better (or not as good) as the other stakeholders on your market? That’s where the benchmark comes in. We’ll explain the details and where to start.
What is a benchmark?
Well, we should probably start by defining what a benchmark actually is. That way, we can get off on the right tracks for the rest of the article.
For a bit of history, it’s said that it was Robert Camp, an engineer at Xerox, who developed the concept of the benchmark in the late 1970s.
The baseline idea is pretty simple. Reducing production costs in their own factories by comparing them with those from other industries in the sector. The aim was to identify then test the best practices at the best costs, to improve overall performances.
The benchmark concept has evolved over time, and it’s now widely used in every business sector, with some varieties having been developed.
To give a more global and modern definition of the benchmark, you could say that:
We should also add that the benchmark is not necessarily a competition analysis. Of course, you certainly can – and we recommend that you do – include companies that share the challenges and issues that you do, or at least that are similar to yours.
Look at it more like a continuous improvement method, using comparison with renowned leaders as a basis.
Lastly, if you read or hear about “benchmarking”, it’s exactly the same thing. A little like fireflies and lightning bugs, even though we’re pretty sure you’ll be staunchly for one of the terms in particular ;).
Why create a benchmark for your advertising campaigns?
Of course, the benchmark is also a tool used as part of post-testing for the performances of your advertising campaigns.
It’s a particularly interesting way of:
👉 Measuring your campaigns' performances in relation to the market
Monitoring the key performance indicators for your advertising campaigns? Excellent idea! Yet, that’s not enough if you want to understand whether they’re really performing as they should.
For example, let’s imagine that your latest campaign got a degree of memorization of 78%. On paper, it looks like a pretty good score. It’s still too early to crack out the champagne, though.
Because, in this very case, you’re only analyzing the raw data. You’re lacking visibility over the performance of this campaign in relation to the same type of campaigns in your business sector. That’s where the benchmark comes in.
Still using the same example, let’s imagine that the benchmark tells you that for that sector and that specific format, the average degree of memorization for an advertisement is 83%. It all seems different now, doesn’t it? Perhaps put away the bottle of champagne (for now).
It’s light at school, you could easily get 8/10 on a math test but still be bottom of the class if everyone else did better. You’ll still get a somewhat fake congratulations from your teacher, who knew the average score.
The benchmark is therefore not a tool to be neglected in post-testing to measure the real performance of your communication campaigns and position your brand in relation to your competitors.
👉 Identifying your strong points and areas for improvement
Just like we saw in the previous example. Analyzing raw data doesn’t give you a global vision of your performances.
In this case, how can you know whether you’re doing better than your competitors? More importantly again, how can you identify the areas where you could improve?
Here again, it’s the benchmark that will help you avoid simply visually going over your post-testing.
If you know that the interest rate sparked by your past 5 campaigns is well below the sector average, you have an opportunity to improve performances.
Conducting a more in-depth analysis to understand the reasons behind this score and getting everything on your side for getting the best results for what comes next.
In the same way, if your results are clearly above average, it’s always worth understanding why. That way, you can replicate all the elements that led to the previous success, getting ahead of your competitors.
👉 Validate the potential of a new idea
In the world of communication, you can’t let yourself just repeatedly use the same formula over and over again. Your audience changes, as do their expectations and behaviors, and you’ll need to adapt by getting innovative.
So, how can you make sure that your new strategy, new formats or new messaging does what they’re supposed to?
By using the benchmark, of course!
Of course, it’s possible to compare your performances based on particular criteria. For example, if you launch your very first campaign on YouTube, you could compare the results obtained with the averages for that specific format.
That way, you can accelerate the validation and boost the reliability of strategic pivots or new things tried in communication. You’ll also get an additional level of insight into what appears to please your audience or not.
Working in this way is a great way of preserving your return on investment (ROI). It’ll be quicker for you to identify the actions creating the best results and the adapt your budgets accordingly.
👉 Set optimal performance objectives internally
The three previous points have shown you that simply analyzing the raw performance data means you’re missing out on some essential information.
Worse again, the data may let you believe that you’ve reached your full potential, whereas there may still be opportunities to seize.
So, why set your teams or service providers goals based on reaching scores that may not even be relevant?
Opt for goals that concern benchmark results. Knowing how to position yourself in relation to sector performances is an excellent tool for your management teams.
You can more easily motivate your teams by showing them the potential progression margin, or on the contrary, congratulate yourselves on being top of the class. This way, you’ll limit the frustration that comes with goals that may be seen as unattainable.
How to properly measure campaign performance using a benchmark?
To optimally measure and compare your campaign performances, you’ll need to follow these three key steps:
⚙️ Step 1 - Make sure that your benchmark is reliable
Your benchmark should be a reference. To know whether the results of your campaign are better, equal to or worse than other campaigns, you’ll need to get reliable data.
That’s why it’s strongly recommended that you put together a benchmark based on around a dozen studies.
By doing this, you can be sure of its solidity and the stability of post-testing analysis. This way, you can be confident in the indications it gives you.
You’ll certainly want a benchmark that corresponds as closely as possible to your campaign in terms of business sector, audience type, format, distribution, etc.
It’s totally understandable, but the more precise your benchmark, the harder it will be to find a sufficient number of studies to base it on.
In the opposite sense, the broader it is, the less refined it will be. The comparison of your performances will therefore be less reliable.
Here’s where we uncover the challenge in putting together an effective benchmark. It needs to find the right balance between all of these variables.
⚙️ Step 2 - Selecting the right type of benchmark
There isn’t a standard benchmark that corresponds to all business sectors and all scenarios.
Always choose a benchmark that aligns with your goals. What are you really looking to measure?
For example, if you’re looking to evaluate the performance of a particular creative format, it’s wise to select a benchmark composed of studies on this format, even if they’ve not been conducted in your specific market.
What really must be remembered is that the closer a benchmark is to you (in terms of sector, format, distribution, etc.), the more you’ll be able to take it into consideration when measuring your own performances in post-testing.
In any case, you always need to qualify it. Effectively, each brand, context and goal is different. You’ll need to keep a critical eye on the benchmark depending on the data from which it was produced.
⚙️ Step 3 - Interpret your benchmark properly
Globally, there are two approaches to take when it comes to interpreting the information from your benchmark.
You’re either going to base it on memos only (people having effectively memorized your campaign), or on the combination of memos and non-memos (people who have not memorized your campaign).
How to read a benchmark in absolute value?
This benchmark is based only on memos. At this analysis level, it’s the only variable we’re interested in.
First and foremost, you’re going to look to see whether the results obtained by you campaign fall within the standards of similar campaigns.
A performance indicator which lands above the benchmark as an absolute value means that this KPI is performing better than on similar campaigns.
In this example, we can see that the rate for people who remembered the campaign is 3.8 points lower than the benchmark rate. The campaign therefore performs worse on this KPI than the average of the benchmark campaigns.
How to reach an uplift benchmark?
This benchmark is based on both memos and non-memos. The variable that interests us here is the discrepancy between the results from these two populations.
The advantage of the uplift benchmark is that it allows us to really understand the general impact of an advertisement.
A discrepancy above the discrepancy benchmark means that you campaign was extremely high-performing.
For this example, we can see on the benchmark that a discrepancy of 23 points is usually observed on this KPI between the memo population and the non-memo population. On the campaign, the uplift was 22 points. The results therefore sit in the middle of the benchmark.
Discover how to easily obtain benchmarks for your advertising campaigns with Happydemics’ brand lift tool!