How should retailers measure impact of TV advertising on sales?

The drums have been beating for long that digital ad spending in the US will surpass Television spending. Digital already surpasses TV spending in some parts of Europe and Asia. Despite this TV remains a strong player. In fact this study on data collected from 2010-2014 found TV as outperforming digital, print and radio advertising on key performance indicators. A quote from the said study:

“TV is the giant megaphone…When you want to get a message out, that’s still really the most powerful means to do it.”

A recurring question from those in the camp of TV advertising is how to measure the impact of TV on sales. It’s straightforward. There are some caveats for the analysis approach below. I share these first. Then I will review the steps.

Doing TV attribution – Caveat Emptor

Some disclaimers

  • I will not cover the creative aspect for advertising or what shows are best for your organization. That’s specific to the individual business and I have no point of view.
  • The method below works best for online retailers whose primary marketing vehicles are TV and Digital but who are not using print media (like flyers and catalogs). The analysis results are fuzzy if you are using print media.
  • You do need some statistical skills beyond basic query and reporting. It will become clearer in the analysis.
  • I will promote Polytab which is my company’s offering for attribution. You can do the analysis using reports from Google analytics or Adobe analytics but that’s a pain to set up. If you have the budget you can also try an agency but if you want something that’s a breeze to set up and is priced rationally call us. That said, … you can do everything I describe below in-house.

Getting started – what you need

Make sure you have the following before starting up.

  1. Marketing funnel measurement: You need to have a way of measuring how many people you have at different stages of your shopping journey. The 5 stage  marketing funnel is standard in Polytab – see the screengrab below. Having this in place will tell you if you are acquiring brand new customers or are re-engaging past purchasers. This is ABSOLUTELY crucial in driving your marketing strategy.
  2. Marketing-funnel-in-polytab-attributionTV ad plan. Get the following data for your measurement window for each ad you are airing. The most important elements are the Ad and the air time. Rest is optional.
  • Ad
  • Length of ad
  • Show
  • Days of week (when Ad is aired)
  • Frequency (of airing)
  • Day part (the slot when the ad airs)
  • Air time (The specific time when the ad airs)
  • Reach (what’s the target geography, audience)

How it works – measuring sales impact of TV advertising

TV-ad-attribution-how-to-DIY

The graphic above describes how to do revenue attribution for TV ads. To see the impact of your TV ad you need to see if and how much the web site’s key performance indicators change after the ad airs. Some definitions

  1. Baseline : this is your web site traffic in the absence of any seasonal events (like Christmas day, Superbowl etc. ).
  2. Attribution window: This is the time it takes for your website traffic to return within 10% bump over your baseline. This is the duration of the impact of your Ad. Note that this measure depends on the Ad and the time when you air it. It is quite possible that the same Ad triggers different behavior at different times.
  3. Ad impact : This is the shaded area under the graph. Measure the number of site visitors and/or orders you got above the baseline within the attribution window.

*Your analyst should be able to figure out the baseline and the attribution window. One area to be careful is to ascertain if the impact of the ad was significant. Note that the method does not tell you WHO in the attribution window came exclusively because of the Ad. We are looking at the bump, and there are people in there who would have come despite the TV ad. So, in order to make conclusions on the customer base acquired through TV ads, you need to have a significant bump through the attribution window compared to the baseline. i.e. if you see a 10%-15% bump, that’s generally not significant enough.

Why Polytab attribution is the best way

Polytab answers questions like the Ad impact of your TV ad, but in addition you get answers to questions like

  1. How many new shoppers did the Ad bring in?
  2. How many purchasers did the ad deliver?
  3. How much time did it take to convert this audience to purchase?
  4. What was the dominant path to purchase?
  5. What were the additional costs in converting these shoppers?

Why is it so easy? Because it covers the complete shopping journey and share what the shopper touched on the path to purchase. See the screengrab below of the paths between stages across channels. You can get down to the shopper or order level and get the complete view of the shopper.

Screenshot-display-sample-Capture

Take Polytab for a test-run

Polytab is Infernotions’ attribution offering that guides retailers on how to grow sustainably without blowing the marketing budget. Most importantly it’s a turnkey solution that is priced on a sliding scale to adjust around retailer traffic. It also delivers results via a beautiful interactive display.

One of the advanced packages is attribution to TV advertising. If TV advertising, or attribution in general is important to you, check out the demo by clicking on the link below or give me a call at the number on our web site.

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Image of Mechanic Eye by Alexander Boden reused without changes, with permission under creative commons.

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