Put ROAS to Work!

By Caitlin Haire, VP Marketing & Communications

TV advertising is still the best way to reach large audiences. By deploying a rapid return on advertising spend (ROAS) model, brands can make smart advertising decisions with their budgets.

 

Recent costs for a 30-second ad slot in the US average $1300, according to DRMetrix. Having the potential to reach thousands to millions of people at once at these rates is an accessible investment for many companies. However, brands want to know that their ads are working so that their advertising dollars don’t go to waste. More importantly, they need to get that information rapidly to shift advertising inventory to optimize performance and/or negotiate and reduce rates with media partners to maximize returns. That’s where consistent measurement of ROAS comes in.

 

With frequent and consistent analysis of core ad performance metrics, brands can have the insights needed to make necessary adjustments quickly. This includes aligning advertising dollars with high-performing airings, networks, dayparts, etc., which could exponentially increase their ROAS.

 

Deploying a Rapid ROAS Model

A rapid ROAS model is crucial as it paves the way for quick adjustments to maximize revenue through TV advertising. To implement a rapid ROAS model, brands need to set up campaigns effectively and measure results consistently. Then, brands must use those results to drive ad placement decisions.

 

Today, rapidly measuring and adjusting ad placements based on metrics is very familiar to brands with digital advertising programs. Brands know they can switch out digital ads at a moment’s notice based on performance. They can apply the same principles to their TV advertising portfolios.

Core Metrics to Track

To get a complete picture of ad performance, brands must track critical metrics, such as:

 

Return on Advertising Spend (ROAS) – Calculate ROAS by dividing revenue by ad spend. This metric shows the gross income from every dollar spent on an ad campaign.

 

Customer Acquisition Cost (CAC) – Calculate CAC by dividing ad spend by the number of new customers. CAC helps identify how much brands have to invest to get new customers to buy their products and/or services during a campaign.

 

Cost Per Order/Lead (CPO/CPL) – Calculate CPO or CPL by dividing ad spend by the total number of orders or leads. This metric measures how much a brand had to spend to get customers to buy their products/services or share their contact information during a campaign.

 

Ad Campaigns with Attribution

TV advertising campaigns need to have an attribution element to sustain a rapid ROAS model. That means brands should be able to immediately connect the dots between TV advertising airings and their impact.

 

Adding a powerful call-to-action (CTA) in a TV ad helps brands achieve attribution by measuring how many people took the requested action. The CTA message can vary depending on what actions brands want people to take – whether to visit their website, download an app or collateral, scan a QR code, call, or send a message to a certain number. Because of this, it’s essential to make sure the ask is clear, direct, and specific.

 

This impact could be indirectly measured by looking at increases over baseline performance, such as spikes in website traffic or app downloads. It can also be directly measured via a 1:1 response method such as a QR code, SMS text, or unique 800-number phone call.

Evaluate Results Daily

A rapid ROAS model allows brands to examine each ad buy individually to refine and optimize performance. Because the CTA urges viewers to act now, their response is usually pretty quick. This means that brands can get immediate feedback to understand how well the TV ads are working by answering the simple question: did enough people do what was asked of them?

 

Working with an expert partner in the TV advertising space gives brands the ability to leverage a rapid ROAS model. Agencies specializing in this model have the teams, infrastructure, and systems built to monitor, analyze, and optimize the ad buys and, most importantly, the knowledge base to understand what it all means.

Adjusting TV Media Buy

A rapid ROAS model will help brands determine when and how to adjust their ad buy to make the most of TV advertising spend. Brands can scale the campaigns and ad sets that deliver high ROAS and drive more profits based on the performance. By having such a granular level of detail into what ads are driving the strongest results, brands can direct more of their media budget into those areas and expand based on the learnings of which networks, dayparts, days of the week, etc. perform and leaning into look-alike modeling. Conversely, if a specific TV airing isn’t delivering the desired result, brands may shift their spending to where they know response and results are stronger.

 

 

There’s a lot of information generated daily, and the marketplace can – and does! – change quickly, so it’s vital that brands can pivot, expand, pull back, and adjust as necessary. A strong TV agency partner is paramount for brands to maximize this insight and turn it into action.

Rapid ROAS for TV Advertising is a MUST for Every Brand

Rapid ROAS measurement is vital for brands that want to get the most out of their TV advertising dollars. With the rise of digital advertising, marketers have grown accustomed to measuring and monitoring campaign results and adjusting daily. The same opportunity is available with TV advertising, especially when supported by deep TV performance management expertise. As a result, brands can achieve rapid ROAS for TV by relying on the right tools and team to meet their goals.