TV advertising is a great investment for many businesses and it still plays an essential role within many company’s marketing strategy.
Considering that TV generates ‘two to four times greater brand ROI’ than high-growth media channels like social media and short form video, and ‘increases the effectiveness of other media by 25%’, it’s not surprising that TV advertising remains as popular as it does.
The formula for calculating ROI is to ‘take the revenue that resulted from your ads and listings, subtract your overall costs, then divide by your overall costs’.
When it comes to measuring TV advertising ROI, there are a variety of different methods you can use.
Ways to measure TV advertising ROI include:
- Website traffic
- Customer surveys
- Promotion codes and deals
1. Website Traffic
It might sound simple, but you can measure your TV advertising ROI with website traffic.
This largely comes down to the fact that research has shown that there’s a ‘direct correlation between TV advertising and website traffic’, and between increasing ad spend to increase website traffic.
The amount of website traffic that your website receives is easy to monitor with tools such as Google Analytics. Provided that you make a note of when your TV ad goes live, and where it is being played, you can use this data to make comparisons with the data collected by Google during the same period of time.
If you notice an increase in website traffic during this time frame, then, this is a clear indication that your TV ad is the source.
While it can be challenging to attribute sales to TV advertising, that doesn’t mean that there aren’t ways of measuring your TV advertising ROI with sales.
For instance, if your business launches a TV ad while making no other changes to your marketing strategy, and you notice a sudden increase in sales, then this is likely down to your TV ad.
The Sales Performance Report is a tool on Google Analytics that allows you to evaluate your overall sales and revenue within a specific period of time. It does this through displaying three metrics: The conversion rate, total revenue, as well as average order value.
Through using this tool, you can see the correlation between your TV ad and sales, and will be able to establish which sales were likely generated by your TV ad.
3. Customer Surveys
Customer surveys are useful for numerous reasons, such as improving customer satisfaction and retention, but can also be another effective way to measure TV advertising ROI.
Your target audience holds a lot of valuable data, with customer surveys allowing ‘businesses across all industries to efficiently collect honest feedback, opinions and responses from customers’.
Customer surveys allow you to gain a better understanding of how effective your TV ad has been. By asking your customers specific questions, such as where they heard of your business, you can gain a better understanding of your customer and where they’ve come from.
Generally speaking, a ‘good survey response rate ranges between 5 and 30%‘, and if a significant number of customers that respond note that they heard of your business through a TV advertisement, then you can attribute these sales to your business’ television ad.
4. Promotion Codes & Deals
Last, but not least, you can use promotion codes and deals to measure your TV advertising ROI.
Considering that ‘93% of shoppers use a coupon or discount code throughout the year’, it’s not difficult to see why many businesses offer them to encourage customers to buy and drive conversions.
Assigning a unique promotion code that is specific to your TV ad provides you with a way of establishing how effective your TV ad has been in that it helps you to track a surge in sales.
Once the TV ad and promotion code goes live, if there is a sudden surge in sales with people using that specific code, this will clearly indicate how many conversions are down to your TV ad.
In addition to this, offering deals for specific products or services for a limited time period can help you to see how effective your TV ad is at encouraging people to take the desired action.
This comes down to the fact that limited sales help to create urgency, as consumers are always looking for the best deal.
As such, the the use of promotion codes and deals within your TV advertisements can be effective at measuring TV advertising ROI.
We are Velocity Juice: we help digital-first companies scale faster by offering flexible eCommerce startup and scale up funding with no equity dilution. As well as digital marketing activity, we are also able to fund TV advertising. For more information about what we do, check out our insights blog or get in touch to speak to a friendly member of our team.