Advertising Efficiency

Posted in Marketing and Strategy Terms, Total Reads: 1067
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Definition: Advertising Efficiency

Advertising efficiency is the ratio of advertising cost to the number of targeted audience reached through the advertising.


For example if the cost of advertising is $ 1 million and the number of target audience reached is 100,000 then the advertising efficiency is 1,000,000/100,000 = 10 $/person.


This term is gaining more and more importance with the advent of digital advertising. For example - the ads on Facebook. A company calculates the advertising efficiency by determining the cost of the advertisement and the number of audience that it can reach. Then based on the results of the advertising efficiency it decides whether to cut back on the advertising or not.

 

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