Performance Is the Future of TV

How to change your mindset, improve ROI, and give your marketing team a data-driven advantage

By Matt Collins

PARTNER CONTENT

Lee Stillwater for the ANA

 

In 1935, Austrian physicist Erwin Schrödinger developed a thought experiment involving a cat, a flask of poison, and a radioactive element in a closed box. Without getting too deep into the quantum physics, Schrödinger posits that as long as the box is closed, we can think of the cat as being simultaneously both alive and dead.

Now apply that thinking to TV advertising. If a campaign delivered 50 GRPs but didn't have a mechanism for measuring ROI, did it simultaneously overperform and underperform? For years, marketers didn't have the tools to provide an answer. Today they do, but despite the emergence of reliable, data-driven solutions that reveal a campaign's true impact on sales, app downloads, website conversions, or other performance metrics, many marketers still rely on the inferred results derived from applying GRPs to a media mix model. To put it another way, maybe they're afraid that if they open the box, all they'll find is a dead cat.

For forward-thinking marketers who have already opened that box, the adoption of a performance mindset has resulted in both meaningful short-term gains and positive long-term changes that are driving company growth. The good news for more traditional brand marketers is that the pivot doesn't carry as much executional risk as they might think.

Across the industry, change is already happening. The April 2017 Credit Suisse report "The Future of Advertising" predicts that 60 percent of brand marketers will be spending money on data-optimized, targeted TV advertising within two years. Given how well it works, the other 40 percent probably won't be far behind. While GRPs are a useful benchmark, the future of TV measurement is data-driven performance.

 

Creating Immediate Incremental Value for Your Business

To help boost their ROI, some brands fall back on cheaper inventory, but with an audience-based approach and a performance mindset, brands can close the loop by measuring the impact of TV advertising on business results, increasing relevant reach, and creating a unified, multichannel targeting strategy.

Here are three things marketers can do to adopt a performance mindset and squeeze better results from their TV advertising.

  1. Learn What's Really Working — and What Isn't.
    With data-optimized TV advertising, brands now can close the loop by matching ad exposure to action. Using measurement from their own CRM or third-party credit card transactions, brands can learn which audience segments drove the most conversions, the best time of day to reach them, and on which networks. One illustrative example is an e-commerce company that had a notion of who its best customers were, but wanted proof to be sure. The company tracked the conversion rates of 12 different CRM-based TV audience segments in a single campaign and were surprised to find that one shared trait among the most responsive segments was higher household incomes relative to the other segments. Following the data rather than instinct, this e-commerce company decided to optimize its approach and use household income as one of the key traits in future targeting efforts.
  2. Optimize for Relevance.
    One of the shortest paths to greater ROI is to reach more likely customers. In 2015, a big-box retailer decided to test an audience-based targeting approach to complement its contextual buy. The retailer used CRM data to identify customers who had previously made purchases from a specific department, and then created a lookalike audience with similar purchase propensities. New creative was released, and the target audience exhibited a 66 percent conversion rate lift compared to adults aged 25 to 54. This led the retailer to apply the same strategy across an additional five departments over the next two years. Each of these campaigns was optimized for relevant reach, and on average, the target audience demonstrated a conversion rate lift nearly 50 percent greater than the standard demo.
  3. Develop a More Cohesive Customer Journey.
    Another immediate benefit of data-optimized targeting on TV is that brands can target the same audience segments on both TV and digital media. From IRI ProScores Audiences to DLX segments from Oracle Data Cloud, brands have more options than ever to deliver messages to the same audience across multiple platforms. And when it comes to social, the Advertising Research Foundation has shown that marketers can increase ad effectiveness by as much as 57 percent by unifying their strategies with TV.

 

A Performance Mindset Leads to Growth

The single most important goal for any company is growth. Sustained growth requires a brand to know exactly how its marketing is performing. To get there, a brand must use first- and third-party data to better understand its customers.

Connecting purchase data with viewing data provides an essential window into the daily lives of a brand's best customers and yields a wide range of insights on the exact performance of a campaign. Over the course of multiple campaigns, brands can learn how their customers respond to different types of messaging, which, in turn, results in improved creative and more precise targeting.

All of this information is essential for long-term growth. The more a brand knows about its customers' behavior, the better it can develop unified strategies across multiple channels. This cohesion in a customer journey creates a better experience, more brand loyalty, and, ultimately, repeat business for years to come.

TV has been bought and sold the same way for years, so it's up to the next generation of marketers to bring a new mindset to their companies. Start the conversation about why ROI is more important than CPMs. Put a stake in the ground on why it's essential to follow the data. Inertia can be hard to overcome, but taking the first steps can yield immediate benefits — and the implications for growth are enormous. When resistance arises, remember Schrödinger's cat. Is it alive, or is it dead? One has to open the box to find out.

 


Matt Collins is the SVP of marketing at Simulmedia. You can email him at mcollins@simulmedia.com.


 


 

CASE STUDY

Performance Mindset in Action: Zicam's Growth in a Crowded Market

The story of Zicam illustrates how marketers can reap immediate benefits on their way to a data-enabled future.

Zicam is a cold-shortening product that was fighting for awareness and market share among 250 other cold remedies in the drug store aisle. Forty percent of its annual sales occur during the 12 weeks of cold season — a period that varies from year to year. Since people only buy cold medicine when they need it most, buying media at the upfronts hindered Zicam's ability to ensure it was reaching people in their moment of need.

Zicam is smaller than many of its rivals. It needed to find a competitive advantage that wouldn't require outspending the competition. Initial attempts at both programmatic and addressable digital campaigns failed, with the addressable campaign resulting in a loss of $0.89 for every $1 spent. Zicam's solution: adopting data-driven advertising on linear TV. Its first campaign was designed to drive coupon downloads for a specific audience, and its media dollars spent per consumption unit went down dramatically. Zicam used the results of the campaign as the basis for a segmentation study aimed at helping the brand home in even further on the consumers most likely to buy its product.

With new insights in hand, Zicam used an optimized TV audience target for a campaign the following cold season. It saw a 267 percent increase in conversion rate for those exposed to the ad and a $4.53 incremental retail return on ad spend. That year, while category sales were down 2 percent overall, Zicam was up 15 percent. By its third year, Zicam had become a full-fledged performance-TV advertiser. After adjusting its spend for certain dayparts and different channels, the company improved cost efficiency and boosted sales yet again 13 percent year-over-year.
—M.C.

 


 

Q&A

Q&A with Lori Norian, VP of Marketing at Matrixx Initiatives, Makers of Zicam

 

Q. What kind of process did you go through in choosing an advanced TV solution?

Along with our agency, Media Head, we met with several different advanced TV partners to evaluate their offerings, their people, their partnering, and, frankly, their B.S. We immediately dismissed companies who proposed strategies for us that we felt were based on flawed assumptions. For the next round of evaluation, we focused on performance expectations, cost, staffing, and growth mindset. When we weren't able to find transparency and/or results with several different digital partners we had worked with in the past, we were quick to walk away from them.

 

Q. What was that debate like internally?

There really wasn't one. As a challenger brand, we understand that we have to make our own magic. We are a smaller organization, so while decision making happens quickly, the impact is inherently greater because we only have one brand and one short season in which to get things right. We don't have the resources to chase down all the good ideas that come along, so we need to place our bets with the solutions we feel are best and then just move forward. Over the years, we've found that we partner best with like-minded companies — ones that are small but have good people with a relentless desire to drive growth based on sound platforms.

 

Q. Other than growth, what feature you were looking for most?

We didn't quite know at the time, but we initially chose Simulmedia because they had a compelling national cable plan that could be hyper-targeted and efficient. But as we worked more closely with the team, the flexibility of placing our media buys with just a few weeks' notice became increasingly important to us.

 

Q. Why flexibility?

The start to cold season is variable. For a highly seasonal, personally relevant brand like ours, it's critical to be in front of the right consumer at the right time. We've tried to lead the season and advertise in advance of consumers having colds, but it's terribly inefficient. Even if we had a media plan on paper, we needed to be able to adjust on the fly depending on when the country crossed a predefined threshold for cold incidence. Simulmedia let us do this. As a result, we're able to more precisely deliver Zicam advertising messages to consumers who are actually suffering from a cold, and thus more willing to go out and buy our cold-shortening product.

 

Q. Were there any unexpected learnings from your first campaign with Simulmedia?

Yes. We learned about the flexibility of their platform, as I mentioned, and also saw positive results from their audience-targeting model, which we ultimately used to inform the traditional portion of our buy. But what really stood out was that we needed to update our consumer insights to better leverage the potential of Simulmedia's targeting capabilities. In order to do this, we conducted a segmentation study before the next campaign.

 

Q. How did the results of that study impact the second campaign?

We started with a much tighter target of people who have a strong propensity to purchase Zicam. The campaign was able to reach those people incredibly effectively, and resulted in very strong ROI. Of course, at that time it was just a single strong data point, and while our leadership was intrigued, they weren't ready to place a stake in the ground behind this new approach. Now, with two years of very strong ROI, we have shown that the results are repeatable and an asset for the brand. This sets a new bar for other providers that propose marketing solutions to us.

 

Q. Speaking of data points, you have a background in cellular biology. How does your comfort with data help inform your approach to marketing?

When it comes to evaluating marketing programs, I tend to lean on the science more than the art; I believe in testing and learning. From a media data perspective, I enjoy digging into the numbers and running scenarios — just ask our media planner, Jim Geoghegan, from Media Head. He and I are both data geeks at heart. When we started with Simulmedia, we took a measured approach and delivered about 30 percent of our impressions through its methodology. The following year, we doubled it and have held steady in the 60 to 70 percent of total TV impressions delivered through Simulmedia's platform. The results have been tremendous.

 

Q. Now that you've seen what data-optimized TV can do, what do you think it will take for more people to make the leap to a performance mindset?

As more and more marketers see the ROI increases that data-optimized TV can deliver, they will leap to a performance mindset. It's very difficult to continue to grow a brand year over year with flat budgets if you don't continuously get more efficient and effective with your media. For a brand that needs a steep reach build against a consumer that heavily consumes TV, data-optimized TV is the way to go.

 

Q. Why do you think more companies haven't made the switch?

In multilevel, multidepartment organizations, you find more friction, more competing agendas, and departmental silos that can make it difficult to drive change and seek unique solutions. That's how large companies get into agency proliferation and, ultimately, waste. The benefit of working at an incredibly small, single-brand company is that there are no layers (or departments), so test and learn can be executed quickly — with meaningful downstream actions.

 

Q. What advice do you have for other marketers who are undecided about whether to seek an advanced TV solution?

Brands that are currently in TV have no excuse for not setting aside a portion of their buy for an advanced TV solution. I recommend they look for companies with a proven track record of servicing either other brands in their space, or ones that have similar challenges. Buying and reporting capabilities, along with cost and personnel, are key differentiators, but don't worry if you don't get it right in year one. Take a test-and-learn approach, and with whichever company you choose, decide if you can work with them to achieve your brand-growth goals.
— M.C.

 


 

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