Ask the Board – September 26, 2016 | SCOTT MARDEN

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Is Return on Investment (ROI) or Return on Objective (ROO) ultimately more important and why?


In today’s marketplace, ROI is the most important metric for clients and agencies considering new digital out-of-home networks. Clients and agencies are scrutinizing every dollar spent to continually improve their media plans and deliver the best, most cost-efficient audience within their budgets (which are often smaller test budgets). To meet this end, networks must look at themselves in the mirror and decide if they should:

  1. A) Find ways to measure and position their ROI
  2. B) Convince their client or agency to consider a Return on Objective approach

To find new ways to measure yourself and present your ROI, there are three things you’ll need. One, you need to know your network audience intimately. A network needs to dive deep to understand demographics, psychographics, spending power and brand perceptions at a location-based level. Two, the network needs to add layered data on top of a representative number of individuals that speaks to the campaign response behavior. This response data could be purchase data, foot or web-traffic data, social or word-of-mouth or any other digitally collected data via desktop, tablet or phone. Third, the network needs a great communicator to deliver the data to agencies and clients to report on the ROI. Typical reports include test and control or pre- and post-measurement of lift in response, combined with analytics of the total investment by the brand.

To take the other route (convincing a client to look at other metrics around their objectives), a network can try a number of methods. First, look at your network strengths and tie those into your argument. For example, if you’re a high-reach, low-frequency network, compare your effective audience CPM against the other media the client typically uses. Two, if you have credible metrics on the objectives that you’ve proven to other clients, use those case studies to persuade a brand to consider a test against those norms. Many digital out-of-home networks conduct dozens of campaign efficacy studies against key metrics such as recall, top-of-mind awareness, brand perceptions and purchase intent. If your network excels at these and you discover they are important to a brand, use your past successes to sway the client toward a Return on Objectives approach. Third, a network needs someone skilled at making these arguments to sway the strategic and data-focused decision makers at agencies and clients. Networks should consider hiring smart marketers and researchers to continually push the envelope on data and audience research as well as training up the sales staff to make the ROI or ROO argument. 

 

About Author

Chief Marketing Officer
Captivate

MEMBER OF THE DSE ADVISORY BOARD
Out-of-Home Network Council

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