What is a Media Effect?

The media effect refers to the total impact that a media investment or marketing activity has on both brand equity and sales. This includes:

  • Short-term sales effects, such as immediate purchases following an ad.  
  • Long-term brand equity effects, such as improved awareness or loyalty that influence future sales.  


Understanding the media effect allows us to calculate a more comprehensive return on investment (ROI) by accounting for both direct and extended impacts of media efforts.


What is the Consolidated Effect?

The Consolidated Effect method calculates the total impact of media investment by rolling back all future outcomes (effects) to the original week of the investment.

  • This approach makes it easier to assess the true ROI and effectiveness of each investment period.  
  • It attributes all delayed or carried-over effects directly to the week in which the activity occurred. 


Use Case:

  • Best suited for evaluating ROI by linking outcomes directly to spend timing. 


What is the Observed Effect?

The Observed Effect shows the actual unfolding of the impact over time, as it naturally happens in the market.

  • Effects of a media investment spread across multiple weeks in the future, reflecting real-world delay and carryover. 
  • Week 1 results may be influenced by prior periods’ investments. 


Use Case:

  • Ideal for understanding temporal influence, such as brand-building campaigns or when planning media phasing.  


Example




In the above example, there are 4 back-to-back to back investment periods. In the Observed chart, the impact is getting spread up to week 10. In the Consolidated chart, the total impact (due to carryover) is shown in the same period of investment. 


In this use case, total Effect from Observed = total effect from Consolidated. However, this may not always be the case, because week 1 may have impact coming from previous investments, among other reasons.


Summary

Observed effect: Represents the impact (effect) of media investment (or activity) on driving any KPI, as it is observed in real life. Due to carryover impact of media, the effect extends for few weeks beyond the actual date of investment (or activity)

Consolidated effect: The total impact (effect) of a media investment (or activity) which unfolds over the following weeks, is rolled back to the initial date of investment. This makes it easy to find the true effectiveness and ROI of investment of each period.