How To Measure The ROI of TV Advertising?

Jimeet Gandhi
Aug 24, 2017 · 3 min read

The common understanding for an advertisement in TVs is that a commercial needs to be run a few times before it can be considered effective. So the question remains: how does one calculate the ROI of a TV commercial? There are a few generic ways that can be followed as part of the TV media buying plan, where one also includes the measurement of ROI.

TV commercials are played across various sizes which are either as ticker messages that run at the bottom of a screen, an ad film or messages that flash on screen. Deciding how your message will be relayed is a part of the media buying plan. While keeping the form of the advertisement and the medium in mind, it is possible to establish the ad spends, where they play an important role to the entire advertising process.

The media buying plan needs to be created with details necessary for all stages of advertising. From the concept of creating the ad to the creation, media plans and the spends. Every detail to the desired outcome needs to be mentioned in a media buying plan.

The best way to create TV ads is through online portals where tracking is made easy and extremely simple. The following pointers will help you ascertain the total ROI from any form of TV commercials.

Traditional approach to calculation of ROI: The basic methodology is to divide the gross sales margin by the ad spends. This will give you a rough idea of the ROI. Traditionally, this method has been preferred since there was only single screen viewing. While times have changed, so have the approaches to calculating ROI. This is also determined by taking into account small demographics into consideration and determining the viewership and the direct reflection with the sales of the products or services.

Online tracking: While opting to create TV advertisements through online portals like Amagi Mix, it becomes easier to track the ROI through the backend services. The dashboards online help figure out the entire process in a user-friendly way. This makes things less complicated than other traditional methods.

Direct response metrics: With the increase in people using multiple devices has lead to an easier method of calculation of ROI. While a viewer sees an advertisement, they can also go ahead and research about the product, service or company and invest in it. This is an easier approach to calculation of ROI since the data is available with lesser effort than studying the buying patterns of smaller focus groups.

Effective advertising: Selling a special product or service for a limited period often works to create effective and creative advertisements. This also helps track immediate sales and helps figure out the ROI better.

Affordable advertising: By decreasing the cost of the advertisements and increasing the sales through affordable and effective advertising increases ROI, helps beat the misconception that TV advertising is expensive and not worth the investment. However, it is possible to create media buying plans with affordable television advertising in mind, while also focusing on quality and the outcome.

Although the traditional approach is still followed, the newer method with multiple screens in mind is more popular. With the tech boom that is constantly growing, there are more users investing in products and services through online portals. This helps track ROI better than the traditional approach. However, the best method can only be determined once the media buying plan is set with the actual spends noted down. Tracking all spends at every stage of the campaign helps determine the ROI and ensure success in advertisement in TV.

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