{"id":12853,"date":"2023-12-18T11:01:48","date_gmt":"2023-12-18T18:01:48","guid":{"rendered":"https:\/\/tegnacorpstage.wpengine.com\/advertise\/?p=12853"},"modified":"2024-02-15T09:43:14","modified_gmt":"2024-02-15T16:43:14","slug":"how-to-calculate-video-marketing-roi","status":"publish","type":"post","link":"https:\/\/www.tegna.com\/advertise\/calculate-tv-roi","title":{"rendered":"How to Calculate Video Marketing ROI\u00a0"},"content":{"rendered":"

The saying goes, \u201cYou\u2019ve got to spend money to make money.\u201d But are you making more than you\u2019re spending? How can you tell?<\/span><\/p>\n

It\u2019s an age-old problem, and unfortunately, marketing and advertising professionals will always face the challenge of generating and measuring significant return on investment (ROI) due to a campaign. It\u2019s especially tricky when employing a <\/span>cross-channel strategy<\/span><\/a> using platforms and metrics that provide more intangibles than tangibles, such as with video.\u00a0<\/span><\/p>\n

Despite its challenges, measuring a video campaign\u2019s ROI is imperative.\u00a0\u00a0<\/span><\/p>\n

\u201cThe desire for video content from consumers is strong,\u201d says Jay Donovan, Director of Digital Sales and Training at TEGNA. \u201cWhen combined with the strong value businesses place on video campaigns, it makes it extremely important that the investment being made is measurable and proven effective.\u201d\u00a0<\/span><\/p>\n

How do you calculate video ROI, and how do you get started? It\u2019s not a one-size-fits-all answer. It\u2019s unique to every industry, business, and goals.<\/span><\/p>\n

Let\u2019s dig into how brands can calculate the ROI of cross-channel <\/span>video marketing and advertising<\/span><\/a> campaigns, including TV, streaming, and digital.<\/span><\/p>\n

What is Video ROI?<\/b><\/h2>\n

In simple terms, ROI is a metric and formula brands use to measure and evaluate the effectiveness of advertising campaigns. Specific to video ad campaigns, video ROI compares the cost of creating and running the ad campaign to the profits it generated.<\/span><\/p>\n

The investment often includes production (talent fees, location permits, makeup, wardrobe, and other materials such as cameras and lighting), post-production costs (editing, animations, and graphics), buying airtime and media placements, and any additional fees such as consulting or agency costs.<\/span><\/p>\n

But according to Matt Ginn, TEGNA\u2019s Director of Enterprise Sales, ROI is much more than a dollar amount.<\/span><\/p>\n

\u201cWhile delivering ROI is at the core of what we do and why we do it, we believe in serving the greater good of our communities,\u201d says Ginn. \u201cIf local businesses thrive, the local economy thrives, creating growth and jobs.<\/span><\/p>\n

To Ginn\u2019s point, when calculating ROI, data can include Key Performance Indicators (KPIs) outside of dollar amounts, such as brand lift or an increase in affinity, website traffic, phone calls, jobs created, people reached, or happy faces and a better-connected community.<\/span><\/p>\n

With clearly defined goals and KPIs in place, do not underestimate the importance of your creative,\u201d adds Donovan. \u201cIt must align with and drive your KPIs (call to action, brand lift, etc.) and speak to your target customer in a meaningful way.\u201d<\/span><\/p>\n

Ultimately, how you calculate ROI will be unique to your brand.<\/span><\/p>\n

\u201cThe KPIs you establish will always depend on the brand\u2019s growth goals and objectives. It could be anything and everything from new customer acquisition and foot traffic to attracting a higher-quality audience and increasing total sales,\u201d says Ginn. \u201cWe pride ourselves on customizing campaigns and solutions and tailor the creative and solutions to meet a brand\u2019s exact goals, often exceeding expectations.\u201d<\/span><\/p>\n

Are Video Ads Profitable?<\/b><\/h2>\n

ROI generated from a TV ad campaign can vary depending on several factors. However, TV remains the leading traditional advertising medium in the country, with $68 billion invested in 2021. That significant investment should signal that TV ads continue to be effective and profitable, even with the rise of digital advertising platforms.<\/span><\/p>\n

\u201cTV can be scary for people who don\u2019t understand how the cost works. It looks expensive, but it\u2019s not,\u201d a TEGNA partner in San Antonio advises. \u201cIt\u2019s probably the smartest marketing strategy I\u2019ve ever chosen because it\u2019s by far the least expensive with the biggest turnaround.\u201d<\/span><\/p>\n

What is the Average ROI on Video Advertising?<\/b><\/h2>\n

As viewing habits change and evolve, Ginn recommends caution when setting expectations for a campaign\u2019s ROI.<\/span><\/p>\n

\u201cIt\u2019s tough to pin down a campaign’s ROI because it\u2019s all dependent on many factors like creative strategy and ad placement,\u201d Ginn explains. \u201cHaving a conversation with your media partner in the discovery process is very important and can help set expectations and timelines out of the gate. Once you run a campaign, you can establish a baseline or benchmark and go from there.\u201d<\/span><\/p>\n

However, an internet search can provide some numbers. For example,<\/span> LinkedIn<\/span><\/a> and<\/span> Chief Marketer<\/span><\/a> feel good ROI on TV ads is around 300-500%, while<\/span> Nielsen<\/span><\/a> says, \u201cBrands that hit the right media investment levels can improve ROI by a median of 50%.\u201d<\/span><\/p>\n

Because different studies and reports have provided other estimates of average ROI, Ginn\u2019s recommendation of having a detailed conversation with your media partner on what a successful campaign looks like is paramount.<\/span><\/p>\n

Challenges with Determining ROI of Video Campaigns<\/b><\/h2>\n

Because it is so nuanced and unique to each business and its goals, determining ROI is one of the biggest challenges in any marketing and advertising campaign. Here are a few challenges to remember when establishing campaign KPIs, goals, and determining how to measure the results.<\/span><\/p>\n

Multi-Channel Attribution Complexity<\/b><\/h3>\n

One of the fundamental challenges in calculating ROI for campaigns lies in untangling the web of multi-channel attribution. Modern consumers engage with brands through various touchpoints, including social media, websites, and search engines. This complexity makes it difficult to attribute a specific conversion or sale solely to a video ad. The challenge intensifies when TV campaigns combine with digital efforts, leaving marketers to decipher which channel influenced the conversion.<\/span><\/p>\n

Delayed Impact<\/b><\/h3>\n

In some cases, branding and awareness are the main goals of campaigns. That\u2019s because<\/span> video ads create a long-lasting impact that resonates with consumers over an extended period, further complicating the ROI assessment timeline. This time between airing an ad and observing its effects can make it challenging to pinpoint the exact moment an ad influenced a purchase decision.<\/span>
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