Thursday, April 24, 2008

Reach and Frequency

I often report numbers showing 22+ frequency and always wonder if it really true? Why are we showing the same Ad to the same person 22 times. Something is wrong with the data... but, if it is for every campaign it must be true. Probably, that is how it is...OK.


I was driving in downtown Chicago (taking my wife to the Yoga class), and guess what - I start seeing Zecoo trading's ads. First ad - I said "Hey, the brokerage account that I use for trading, cool!", the next minute I see 3 cabs with the same ad for Zecco trading, I thought great! they are really try to acquire new customers. Believe it or not, in my round trip of less than 2 miles, I saw 8 Zecco trading ads. At the end of the drive, I was like OKAY! I get it, Zecco trading is offering 10 free trades and I use them every month. Forgot to mention... I see their online banner ads during the day at work.


The above is a classic example of over saturating the market with ads. Advertisers need to realize that there are only "n" number of consumers out there in the market. By spending more money, we cannot increase our market size. The more money the advertisers spend, their expectations for returns also go up. Is that justified? No! By showing more ads, you are reaching the same consumer audience and you cannot force them to start using your service or buy your product.


In my experience in the online world, 4-6 Ads bi weekly per user should be the ideal frequency. If a consumer does not convert due to exposure 4-5 times, chances that he will convert with 22 views are also very slim :)

4 comments:

Nicole said...

I don't think Zecco spends a fraction of the cash on advertising that the big guys like Etrade, Schwab etc. do. Plus, I like the pink!

Online Marketing Analyst said...

Nicole - Appreciate your comment. The main point of my post is that the advertisers show watch the frequency of their Ads. It does not matter how big or small is your Advertising budget.

I also like the Pink! I use Zecco almost every day :)

sareama said...

Guys,

Zecco is great and I am a diehard fan of "free" stuff. But to the company how much does this free stuff cost?!

In terms of NPV per account, I am sure that this is negative for Zecco because they over saturate the market by

1. Over advertising
2. Over connecting (I just made this term up!)
By over connecting I mean they keep calling you over and over so that you fund your Zecco account once you open it. So in terms of NPV per account, I feel that this is not a good business model. I hope Zecco is smart enough to use all this data for creating an optimum market segment of investors that trade frequently enough that they care to have "free" account.

Just my 2 cents.

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