Ratings vs. ROI: How Would I Use TRA? - Bill Harvey - MediaBizBloggers

I hear this question a lot nowadays.

If you're the advertiser, your CMO, brand managers, and in-house media group will be most interested in seeing how the overall TV ROI you're getting from marketing mix modeling breaks down into components that are separately buyable – like networks, program types, days of the week, dayparts, different forms of brand integration, target segments, frequency levels, recency, etc. These people, together with the media agency, will change plans/buys to get more ROI. Ratings obviously don't enable you to get these insights since ratings are about opportunities to see, not sales effects.

Your CEO and CFO will also be interested in seeing some of that. TV ROI becoming more controllable probably makes TV allocations stabilize and perhaps grow again.

The advertising people will be analyzing the different creative executions in the pool, and together with the creative agency, shifting the on-air run rates to the higher ROI executions.

The research people will be using the household-level rich data to enhance marketing mix modeling, analyzing targeting segmentation schemes with the beginning of an optimization approach, and doing creative things that cannot be foreseen. They will be analyzing which messaging works to understand why.

Meanwhile, over at the media agency, buys will be made using the purchaser targets as index weights on the classical sex/age CPM metric, resulting in higher ROI.

Corporate upfront stables will be allocated to brands by agency optimizers based on the same sex/age plus purchaser metrics.

The creative agency will be studying the ROIs by creative execution not only for their own ads but for all the ads. They'll be looking for patterns as to what distinguishes the creative executions that have the highest ROIs, in order to drive the next wave of Big Idea creative.

Or let's say you're a network. Your ad sales people will gradually be able to re-establish new levels of value for your inventory. It won't happen overnight. But sooner than you think, you will have new opportunities for premium CPM that weren't there before. This is simply a matter of seeing where something is valuable to certain advertisers and pricing so that it is still a win/win.

You'll also have research people analyzing the places in programs where the audience suddenly fades out, in order to see patterns and make decisions about making shows stickier.

Audience promotion will be analyzed more quickly through the TRA instant access system to determine what it cost to get that quarter rating point sustained series lift, and if it was worth it (it usually will be if it gets that!). Patterns in the creative and media placement dimensions will be discovered, leading to better ways to plan and buy audience promotion.

Some of your network researchers will sneak minipilots on air in out of sight markets just to see the second by second audience retention patterns to decide whether to take it to pilot.

Those will be most of the common use cases of TRA. No doubt that some of you will think of even further use cases.

Bill Harvey has spent over 35 years leading the way in the area of media research with special emphasis on the New Media. Bill can be contacted at bill@traglobal.com.

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