How Are Large Companies Measuring the ROI of Their TV Campaigns?

November 19, 2015

ForbesInsightsSimulmedia-Measuring-Biz-Outcomes-TV-Ad-Campaigns-Nov2015Advertisers are primarily measuring the outcome of their TV ad campaigns on the bases of increased brand awareness (49%) and increased sales (44%), finds a recent report [download page] from Forbes Insights and Simulmedia, and these are also the outcomes that have increased in importance for the largest share of advertisers over the past 3-5 years. So how are advertisers tying TV advertising to increased sales and other business outcomes?

Most commonly, companies are looking at total purchase data after ads run (64%) and total website visits after ads run (60%). That’s likely a reflection of the common metrics used, which include direct website traffic, which is now as popular as Gross Rating Points (GRPs).

The report does note that there seems to be some variation in how various industries measure outcomes. For example, while slightly fewer than half (46%) of companies overall measure total in-store visits after the ads run, the use of in-store visits as a tie-in ranges from 75% for the media and entertainment industry to just 16% for financial services.

Other, lesser-used methods for measuring TV advertising outcomes include:

  • Direct response to unique phone numbers, URL or email in ad (39%);
  • Internal attribution statistical model (28%); and
  • Third party/media mix company model (20%).

The study shows that digital measurements are making some inroads into TV ROI calculations. Indeed, 7 in 10 respondents – all of whom came from companies with at least $250 million in annual revenues and $1 million in advertising spend – expect to change how they measure the outcomes of their TV campaigns over the next few years, with the biggest upticks projected being for tracking social media mentions, sales and direct website visits.

Interestingly, despite respondents generally seeing TV advertising as a key component of their marketing and/or branding strategies, only about 1 in 3 companies surveyed believe that TV gives them the best ROI in comparison to other advertising types. By comparison, a similar 28% feel that TV gives them a lower ROI than other channels.

Nevertheless, consumers feel that TV ads have a strong influence on their purchases. Indeed, primary research conducted by MarketingCharts finds that TV ads influence the purchases of more US adults than any other paid media. Moreover, more adults report noticing specific advertisers on TV than on any other advertising channel.

Returning to the Simulmedia study, there seems to be a clear emerging focus on audience targeting. For example, when asked how an increased focus on ROI impacts – or will impact – traditional media advertising (including TV), respondents were most apt to point to the improved ability to target ads at those who are more responsive. And currently, more respondents are placing TV ads based on an audience basis (placing ads that target a specific audience regardless of content, network or channel) than on a content or reach basis.

Going forward, marketers are expecting to change how they segment audiences, primarily by paying more attention to purchase likelihood, behavior or intent (54%) and to demographic data (49%).

About the Data: The results are based on a survey of 202 respondents, 43% of whom are the sole decision-maker in decisions about media advertising spend, with the remaining either joint decision-makers (33%) or influencers (25%). All respondents came from companies with at least $250 million in annual revenues and at least $1 million in annual advertising budgets.

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