As a leading Melbourne advertising agency, we have partnered with dozens of clients and we have been privileged to witness the 'before' and 'after' results of simply changing advertisers' TV marketing strategies. It's common for us to hear, 'sales increased by 40%', 'we’ve had a record-breaking month' or 'donations have doubled', from clients who have optimised their TV schedule based on direct response.
For the most part, TV advertising hasn't changed in more than 40 years. Most advertising agencies and media buyers still buy in a traditional and very simplistic manner, which for a brand campaign typically involves a ‘cookie cutter’ approach. Media buyers will typically allocate 70% to peak time slots, invest up to 80% on the main channels (7, 9 or 10) and regularly participate in a network share deal, which will often consist of allocating at least half of their investment to Seven or Nine. Today's advertising agency doesn't like spending much time on TV advertising, as it's a low-margin medium in comparison to their digital marketing products and offerings. TV, just like any advertising medium, has evolved over time and it’s more important than ever before to optimise your TV media buying strategy based on outcomes, instead of relying on a traditional mass reach model that uses TARPS and CPMs (Cost to reach a thousand people).
Below you can find a quick summary of three key elements that must be continually optimised to dramatically increase your response rates, lead generation and advertising ROI.
1. Day of week
To this day, TV still delivers the greatest reach when compared to other types of advertising. Most traditional TV media buyers or marketing agencies will plan their advertising campaigns based on the objective of 'branding' or 'retail'. Branding clients will often have their entire investment fall between a Sunday to Wednesday. Retail campaigns will typically start on a Thursday and run through until Saturday. This is how TV has been planned for decades and for the most part it is a great starting point for performance TV advertising. Advertisers who are obsessed with lead generation from TV activity are now starting to realise that optimising the level of investment for each day of the week is vital. Having too much invested on Mondays can decrease your results for the week. Having too little invested on Sundays means you are missing out on a lucrative day of the week and lead generation volumes suffer as a result. The optimum day of week investment varies for each client, however the one thing that is common with top-performing advertisers is that they monitor and optimise their daily investment levels.
2. Time of Day
Generally, advertisers buy based on audience as they don’t have any other metrics with which they can compare networks proposals. As everything is based on audience, this also means that advertisers typically enrol in the cookie cutter approach of buying 70% in peak time slots (6pm-10.30pm), as this is where 70% of the audience is found. What most TV media buyers do not consider are response rates and levels of audience engagement with TV ads. Depending on the client, response rates in peak time can be amazing and require high levels of the investment. Other clients need to drastically reduce their level of investment as off-peak spots (airing before 6pm) deliver far greater ROI. Optimising your peak time percentage for the outcomes delivered is a must if you are looking to increase your TV advertising performance.
The networks that you choose to partner with can have a massive impact on the overall success of your advertising campaign. Most advertising agencies select the largest network (currently seven) and participate in a share deal. This means that advertising agencies typically invest at least 50% of their client’s budget with a particular network, in return for a slightly better rate position. This marketing strategy can also include additional incentives for the advertising agency, as a result. Although a network share deal can look very attractive on paper, what we regularly find is that networks that deliver a low response rate continue to appear on the schedule.
Advertising agencies also often allocate a large percentage of their budget to the main channels (also knows as primary channels), as that’s where they can reach the largest audience. As reaching more people doesn’t necessarily mean that you’re going to get a better response, it is important that your split between the main and digital channels is optimised. If you are looking to drive engagement, consumer response and ultimately lead generation from your TV activity, then it is vital to optimise your media schedule based on response, not on deals from a network. Small cost efficiencies on a particular network do not directly correlate with increased campaign performance. Reviewing CPMs or TARPs are one way to compare proposals from networks, however performance agencies monitor and negotiate vigorously based on the outcomes they deliver, not on suggested audience delivery from 3,500 electronic boxes that are responsible for creating our audience numbers across five capital cities.
If you would like to learn more about response rates and how you could measure and optimise your TV advertising based on outcomes delivered rather than audience, please feel free to enquire below and organise a free consultation with one of our growth experts: