What marketing story is complete without advertising? By the end of this lesson, you'll be able to discuss metrics used for measuring marketing efforts and the role that digital advertising is taking on in the marketing landscape. Traditional advertising metrics emerge from, but are not restricted to TV, radio, print, billboards, and other sources. Types of advertising that have been around for a long time. Some traditional advertising metrics that can help you include net reach, which is the number of people exposed to an ad. Average frequency, which is the average number of times an individual is exposed to an ad. Impressions, which is the number of times an advertisement is viewed. And GRPs, which stands for gross rating points, which is the impressions divided by the number of people in the audience for an advertisement. Or in other words, the total number of people in the defined population. GRPs are a great measure of how many or what percentage of people actually saw your ads. Impressions is the product of reach, which is the number of people exposed to an advertisement and the average frequency. That is the number of times an individual is exposed to the ad. GRPs can be written in two different ways. It could be the impressions divided by the population of your marketplace, so it's nothing but the percentage of people who saw your ad. Or it can also be written as the reach of your advertisement multiplied by the average frequency with which your advertisement was shown to an individual divided by the total population in the marketplace. Okay, so now that we have introduced traditional advertising, let's talk about digital advertising. And there are many types of digital advertising nowadays. For example, in the realm of digital advertising, you could have display advertising. Display advertising can be of many types including banner ads, ads with images, interactive Adobe Flash, video, audio or other forms of rich media. Here, I just wanted to show you how important display advertising is and how vast the landscape is. If you look at the image shown here, you see there are several hundred companies that exist in this space. And they each have their own method of creating and deploying display advertising. Now, apart from that, you can also see that digital advertising has grown dramatically since the mid 2000, and continues to be more important. Between 2008 and 2013, for example, you see an almost doubling of digital advertising in the time period. In addition, you also see that mobile advertising, another form of digital advertising, is growing rapidly. And it may not surprise you that it is expected to become a much larger share of the overall digital advertising landscape over the next few years. And finally, here is a graph that demonstrates how important digital advertising is going to be in the very near future. If you look at the amount of time individuals spend on these different media types, print, radio, TV, Internet, mobile, you'd see that even though TV and print have such a large percentage of advertising spent, consumers actually spend less time on these media than they do on the internet or mobile media devices. So in terms of an opportunity for firms in the digital marketing space, there exists about a $30 billion opportunity in the United States alone, if ad spend ends up matching the time spent, which is obviously a strong possibility in the future. To wrap up, I wanted to introduce the advertising space to you. Advertising constitutes one of the most important elements of your marketing research plan. Traditional advertising channels like television, radio, print, billboards have now being augmented with digital advertising media. Digital advertising is only growing in importance and will soon surpass spending in other forms of advertising. Additionally, digital advertising is becoming more targeted, social, local and mobile. In the next few videos, we will further explore the digital advertising space.
