How to Measure the ROI of TV Advertising?

Advertising has, in the past, had a major impact on boosting the growth and profitability of different businesses. By showcasing a product or service through advertising companies hope to increase their sales and uplift the brand image further. It is the effectiveness of advertising that makes it the ultimate thing that brands choose when they decide on promoting their products. Not just for new companies, biggest of the companies, till date opt for advertising on different platforms to maintain their brand image.

TV advertising has been the most popular form of advertising. For as long as one can remember, there have been TV ads. Television ads are a popular choice because of the impressive ROI that it offers to the companies. Not only that, with the right advertising the growth potential is further expanded. Since the TVs have wide coverage and most of the households have televisions, the chances of reaching a maximum audience increase exponentially.

Advertising is considered as one of the core lead generation tactics that not only increases brand visibility but also helps in increasing the customer base. Be it offline advertising or the new age of online advertising, the goal behind any form of advertisement remains the same. With the growing technology where people are getting inclined towards digital platforms for advertising, television still remains a reliable source for advertising. This is essential because the viewership on televisions is huge. Digital platforms like OTT are comparatively newer. However, there is still a very large audience present on these digital platforms which can be approached through advertisement. But the charm of TV has made an equally large chunk of people still prefer to stick to television.

WHAT IS ROI?

If put in layman terms, Return of Interest or ROI is a tool used to measure the efficiency or profitability of an investment. The rate of interest shows the performance scale of an investment that is made. Managing and evaluating the ROI is essential to understand what can be done better or to figure out other advertising investment alternatives for the future.

ROI is a simple and versatile method to evaluate how well an investment has performed. For TV ads or any other platforms where the ads are displayed, marketers use it to track the effectiveness of an investment. The ROI is obtained in the form of a ratio that compares the gain or loss of an investment relative to its cost.

MEASURING ROI FOR TV ADVERTISEMENTS

The ultimate goals of any TV advertising can range from enhancing sales, launching a new product, increasing the traffic to the store, or building the brand’s name/reputation. These are some of the major reasons why companies opt for TV advertisements.

The ROI is like a report card of the performance impact that an ad has had on the brand’s image and the sales of their products or services. The basic formula of calculating the return of investment is dividing the gross sales margin by the ad campaign cost. A well- run TV ad campaign can be identified through the ROI it has managed to achieve. If the ad campaign has done extremely well then chances are that it would help achieve a multi- fold ROI.

Any TV advertising agency strategizes and works out a plan of action for the advertisement in such a manner so that the advertiser company can achieve the desired goal. A marker of the effectiveness of the TV campaign run by an advertising agency is the ROI that has been achieved.

TV ADVERTISEMENTS AND THEIR BENEFITS FOR ADVERTISERS

With the influx of multiple digital platforms popping up in recent years, a rumored belief keeps going around about the TV advertisements losing their efficiency. Contrary to the belief that TV advertisements are still equally important for advertisers to acquire new customers. The TV ads still hold value for the advertisers due to the multiple benefits it provides:



Helps in Reaching the Target Audience: TV ads have a wide reach. That is because of the massive viewership it holds. IT is not easy to reach a wide audience but is equally easier to connect with the target audience. Focusing on the factors like demographics can help reach the target audience with much better ease. For reaching a large number of people in a short amount of time, TV advertising is the best.

Achieving the Desired ROI: ROI provides a vital insight into whether improved marketing methods are required or if the same caliber of marketing is sufficient for use in the future as well. TV ads take huge investments and can help achieve extremely profitable results in terms of greater sales or creating loyalty with customers. The investments that go into putting out a TV ad and their effectiveness can be measured with the ROI.

Easier to Gather Attention: A TV ad is the best medium to put any particular brand and its products in the spotlight. TV ads have the ability to reach potential customers and make an impact with a lot of ease.

To summarize, TV ads may be a conventional method of advertising but they remain the most viable option as well. The television ads not only help in reaching out to the masses with the brand message or the products that a company has to offer but also helps in creating loyalty.