To define it shortly and sweetly, Return on Investment (ROI) is the financial benefit received from an investment. It’s a measure of what you get back from what you put in. It’s important to strive for a high ROI, which can be calculated through using a ratio and dividing the gain earned from the investment by the investment amount. But, what does this mean for advertisers? And how can advertisers ensure they’re going to receive the best ROI on their campaign? Let this post walk you through how ROI works, what advertisers can do to have a strong ROI, and how this is measured in the real world.
Recent studies regarding out-of-home advertising’s effect on ad campaign ROI’s and online activity are a potent reminder that campaigns do better with outdoor advertising. Omnicom Group’s Benchmarketing revealed that for every dollar put into OOH ads it results in almost $6 in sales, while Nielsen showed that out-of-home ads drive online activity much more cost effectively than television, radio and print. Both reports indicate the powerful connection between OOH and search. OOH increases the effectiveness of digital search by over 40 percent and print by over 14 percent.
Unlike other advertising media, outdoor advertising is still lagging behind when it comes to presenting hard data used by most marketers or agencies in tracking or measuring their returns on ad spend. Nevertheless, that doesn’t undermine the effectiveness of the medium as there are other creative yet efficient ways to measure ROI in out-of-home advertising.
What is Return on Investment (ROI) and How Does it Work?
Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.
The simplest way to think about the ROI formula is taking some type of “benefit” and dividing it by the “cost”.
Now, this brings us to the question being, “how can you get a positive ROI for your out-of-home advertisement?”
Identify your target audience:
The best place to begin your campaign. Start by seeing who would best suit your advert, and what response you’re looking for in them. Tap into audience demographics, psychographics, and behavioral patterns.
Choose the right location:
Advertising in the wrong location and to the wrong set of audience members would defeat the purpose of any outdoor advertising campaign. Choosing the right location to advertise your products and services is a very important factor in measuring ROI.
Craft the right message:
Out-of-home media is characterized by its short time frame to catch the attention of consumers. Since consumers come in contact with OOH messages on-the-go, it is important to catch their attention with attractive, unique and catchy messages.
Develop a digital trail:
A good strategy for showing the effectiveness of an out-of-home ad, and in turn demonstrating a hard ROI, is to create a digital trail to track revenue and obtain leads.
A strategy should come in place that would track your ad digitally. Consider including a call-to-action at the center of your campaign utilizing one or more of the following ideas:
- Display a unique promotional code that offers an exclusive deal to customers, who have to enter the code before purchasing online
- Create a unique landing page with a short, memorable URL (displayed on the advert) to track the number of visitors/sales/bookings as a result of the OOH ad
- Utilize the ever popular hashtag to encourage activity on social media
How to Measure ROI on OOH Advertising
When looking at how successful your OOH campaign is, consider these few things:
- Brand Awareness – See how many heads are viewing your website online. With the help of Google Trends, data can be easy to find in order to transform your campaign into something more substantial along the way.
- Influence – A new ad should always increase your sales. By comparing the amount of traffic from your ad with the amount of sales, you can easily tell if the campaign was worth the overall investment.
- Visibility – Check to see the placement for your campaign and make sure it’s exposed to worthwhile clients.
- Mindshare – Even though there’s no guarantee people will talk about your brand or recommend it to their circles, you can see how many people are discussing it on social platforms. It’s important to look at reviews, feedback, or comments in order to see how well performing your campaign is doing.
After seeing what goes into ROI, how it’s calculated, and how advertisers can measure the success of their campaigns, it’s clear that ROI and outdoor advertising give brands another reason to keep on keeping on.