5 Ways to Get Better ROI


Why read this article: This article will unpack why ROI is not a fixed, or, constant number. In the increasingly real-time marketing world, we need to understand the “message-level” ROI and other dynamics that can dramatically alter your ROI.

Years ago, there was a person at Procter & Gamble who carried a little card in his front pocket listing the ROI of each media. I heard the story from a digital sales person who pitched him. He pulled out his card, looked at the ROI of digital, which was 15% lower on the list than TV, and said, “Nope, you don’t have the ROI to get my budget.”

What a silly way to look at ROI. It is like sleep walking – it is moving without intention. Looking at ROI in such a limited fashion shuts a marketer off from the world of possibilities to improve ROI.

The forces that influence Media ROI are, in order of influence, as follows:

1. Message

2. Targeting

3. Reach/Frequency dynamic

4. Media

So it is an outdated convention for us to talk about ROI in relationship to media, as in “the ROI of TV” or “ROI of Social” or “ROI of Radio.” When you hear “Media ROI” pinch yourself and remember they are combining lots of factors from the last campaign (or average of lots of old campaigns). There are lots of ways the ROI could be a different number – a much better number.

Let’s take a look at how you can hack ROI to get better results:

#1 Hack the Message:

The message you use has a huge influence on the impact, and hence the ROI. Message has such a big influence the IAB required a live measurement of the advertisement at the start of the cross-media attribution measurement we performed for them fifteen years ago. The way to hack media ROI with message is to run multiple messages, measure quickly, in the first week or so of a campaign and get rid of the poor performers, because they will bring down the overall ROI of the media. This is what Saatchi & Saatchi, Toyota and Time Inc. did to get 5x better results compared to a typical campaign.

#2 Hack the Targeting

The message is an important influence on ROI, but it isn’t the only factor. Certain messages work better with certain people. If you have the exact same message, but change the target, you will get a different ROI. In other words, the ROI for one segment might be $3.00 and $0.80 for another segment. If you can measure the message quickly, analyze the data with as many profile variable as you can, and link it to the insertion level composition data, you can pull off in-campaign optimization. This can increase ROI by over 20 percent. This hack is used by Warner Bros in their campaign honored with the Big Data Gold Medal from the ARF.

#3 Hack the Reach Frequency Delivery

Reach and Frequency also play a role in ROI. Each time the message is delivered to the same person, the incremental impact of the additional frequency generates a diminished impact. The first impression might have an ROI of $2, but the second exposure might only have an ROI of $1.70, and the third, even less. Therefore the overall ROI is a composite of the message, its targeting and the frequency. With a systematic analysis of frequency, you can adjust your media placements to increase ROI.

#4 Hack the Price

ROI is impact divided by cost. Therefore, if you can negotiate a different price, you will get a different ROI, all else being equal.

#5 Consider the Media

Marshal McLuhan said “the media is the message,” and, there is some truth to that. In the early days of digital, a brand would be perceived as more “high tech” as a result of the association with digital media. Some media are better at conveying certain types of information. However, with approximately 5,000 paid message opportunities to each consumer each week, the media itself is not the most influential factor in achieving ROI. It is unfortunate that the least important factor in determining the ROI (the media) is the way most people relate to ROI. Perhaps we can all change our reference to message ROI instead of media ROI.

Today, more than ever, we have the tools to directly improve ROI. That should be empowering. Today, that P&G guy could look at the ROI card and ask, “Can you help me increase ROI by 20 over what we did last time? What can we do to test & learn our way to higher ROI through message, targeting, frequency management, and cost negotiation?” That would make the conversation more productive for everyone.



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