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TV Advertising - Stop buying audience, start buying performance!

Jonathan Rolley
Jonathan Rolley Posted on Apr 18, 2017, 9:31:00 AM

We recently worked with the marketing manager of a company who was fixated on traditional TV metrics, such as TARPs and CPMs. When we shared a new way of media buying, based on outcomes like 'cost per click' and 'cost per lead', using TV advertising, his marketing strategy changed in a heartbeat. Traditional audience measurement systems were introduced into Australia during the 70s to help advertisers understand how TV ads were priced and this was the only way to measure and buy traditional media.... until now!

 

a man standing on a target in a crowd to depict target audience

1. Outdated traditional metrics

TV advertising metrics haven't changed in over 40 years, and neither have the marketing strategies of planning and buying TV ads for most advertisers and advertising agencies. When the electronic measurement of TV audiences was first introduced in the early 70s, this changed the way that media was purchased, as advertisers now had a metric with which they could compare networks, spots and deals.

In today’s digital media environment, these traditional metrics are now proving to be insufficient and somewhat outdated for many performance advertisers. In Australia, we have just 3,500 electronic devices located in households across five metropolitan cities (http://www.oztam.com.au/theoztampanel.aspx). These devices monitor the TV viewing habits of each household, to give advertisers an idea of the audience delivery of their media schedule. Although the number of electronic boxes is looking to increase slightly from 3,500 electronic devices, this relatively small sample is used to estimate TV audience delivery for nearly 14 million Australians in metro areas and to distribute tens of billions of dollars in advertising investment. 

If we turn our attention to radio surveys, it can be even more frightening, as they are conducted eight times a year and require participants to fill in a manual paper diary. Similar to the electronic audience measurement that was implemented in the 70s for TV advertising, the manual paper diary gave radio advertisers an understanding of the audience reach and a comparison between the networks.

Many advertisers are unaware that there is now a more accurate way to measure, optimise and buy traditional media, by utilising the latest data analytics technology. Direct response marketers who are obsessed with the cost to acquire a lead or customer, can now measure the impact of their traditional media platforms, such as TV advertising and radio advertising, using digital metrics like 'cost per click' and 'cost per lead'. By simply changing the way that they are buying and negotiating with traditional mediums, advertisers can see a dramatic increase in lead generation as a result.

 

2. Advanced TV measurement

Measuring TV advertising and radio advertising by using audience as a metric is a great starting point, as it gives us an understanding of our reach and frequency. The challenge with these metrics is that it's incredibly difficult to optimise media schedules for greater ROI as our only measurement for success is an estimated audience delivery, rather than an actual business outcome, such as cost per lead.  

Leading advertisers are now moving their traditional media metrics like TARPs and CPMs to digital metrics, like cost per response or pay per click. This allows marketers to analyse their traditional media schedules on both audience delivery and the outcomes that are delivered. By changing the way that they measure and monitor traditional media, advertisers are increasing their advertising ROI and drastically reducing their wastage. Marketers with limited resources are identifying programs and environments that are delivering little to no return and removing them from the media mix, whilst also doubling down on networks where their results are most favourable. 

 

3. TV enters the world of performance marketing 

If your advertising needs to deliver web traffic, lead generation and ROI then it would be well worth considering working with a Performance Marketing Agency. Traditional advertising agencies are great at working with traditional metrics like audience and TARP delivery. These advertising agencies typically participate in share deals with networks for a slight increase in reach, however they often ensure poor performing networks are included on the buy as result.

Performance marketers, on the other hand, are more concerned with the outcome of their media investment. They are focused on increasing lead generation and less concerned about traditional metrics like TARPs. If you are a marketer whose prime concern is increasing lead generation then it would be well worth considering a performance marketing agency to help you transition your traditional media metrics to a performance model. Direct Response Media is APAC's leading performance marketing agency and we have helped dozens of clients to completely transform their traditional media activity, drastically increasing their ROI and lead generation as a result.

If you would like to learn more, please feel free to reach out to our team and discover if updating your media metrics could increase your lead generation: 

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Jonathan Rolley
This post was Written by Jonathan Rolley

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