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June 9, 2020

How Can Brands Measure ROI From TV Advertising?

Even in the digital age, television commercials are one of the most powerful and effective methods of advertising. More than $70 billion is spent on television ads each year, and for good reason. On average, American adults watch five hours of television each day, meaning TV ads have a huge reach. As a marketer, you definitely want a piece of this pie, but you also know it's important to be able to accurately measure the return on your advertising investment. Learn more about television advertising and how you can measure its ROI.

Use The Right Metrics

It's easy to track the return on your investment if you know what statistics to look at. Here are a few of the key metrics that you can use to determine the success of your television advertising campaign.

  • Gross Sales - it can be a bit tricky to measure directly how a television commercial is affecting your sales, since an increase in sales can be attributed to so many factors. However, if you launched a TV ad, changed nothing else in your marketing strategy, and see a surge in sales, you can attribute these sales to your ad. Track how many sales you get during the period that your ad is running to get your gross sales.
  • Effectiveness - you can use your ad to promote a special deal or unique product, so that when the customer asks for it or searches for it, you can confirm that the traffic is coming from your TV ad. This can help you see how effective your ad is at getting people to take action
  • Website Traffic - it's easy to track when and where your website traffic is coming from via analytics software like Google Analytics. If you know when and where your television commercial is being played, and compare that info to your web analytics during the same period, you can attribute site visits to your commercial.
  • Customer Survey - the easiest way to understand how your customers found your business is by asking! Ask online customers where they heard about your business. If they state that they found you because of your television commercial, you can attribute this sale to your ad.
  • Promo Codes or Phone Numbers - your television ad can use a unique promo code or phone number that is specific to that ad, so you can easily track the number of customers who use that code or call that unique phone number.
  • Nielsen Ratings - the Nielsen Corporation is a marketing research firm that has created algorithms and software that can help you track television commercials and see how effective they were in comparison to all other commercials that are currently on air. You can use this as a benchmark to determine your commercial's success.

Determining Your True ROI

When you use the metrics listed above to attribute sales to your television ads, you can then determine your final ROI. To do this, take the average lifetime value of a new customer, and multiply it by the total number of new customers acquired. This final number will be the ROI of your television ad. Think about if this number outweighs the production cost of the commercial and the price of the ad spot. If so, congratulations! You've created a winning ad.

If your first TV ad wasn't much of a success, that doesn't mean you should totally discount advertising on television. It can be tricky to get it right on the first try. You can try changing the creative aspects of your advertisement, or try advertising to a different demographic. Eventually, you'll come up with a formula that is successful, and you can continue to use it again and again.

If you're ready to take your advertising strategy to the next level with a killer tv ad, contact us or get in touch with our commercial video production team.. Sparkhouse is happy to help make your business's dreams and goals a reality with our expertise in marketing, advertising, and video production.