Turner's Michael Strober on Unlocking the Keys to Higher TV ROI

(Editor’s Note: MediaVillage contributor Bill Harvey co-authored this column.)

It’s been refreshing to see the TV world transform over the last two years. For an industry that was fully ensconced in planning, selling and buying TV advertising against broad age/sex demographics for over 50 years, the transformation is amazing. Take a moment to ponder that: Our multi-billion dollar industry had been using the same audience definitions since the time Lyndon Baines Johnson was president. Just a fun fact to mention at the next cocktail party you attend.

But we have been finally blessed as an industry with great integrated marketing and media data sets from comScore (Rentrak), Nielsen and TiVo Research (formerly TRA). So the process of identifying whether inventory is effective at reaching a given advertiser’s target is as easy as identifying whether inventory is effective at reaching an age/sex target. While we used to forecast age/sex, we now can forecast audiences. And inventory management systems are being modified to accept audience data.

As we go through the next few months, it’s important to remember that the various data and targeting strategies being rolled out by Turner and the entire media landscape are not meant to be shiny new toys. They are meant to reflect different approaches to an outcome that benefits everyone in the TV ecosystem -- higher ROIs from TV spending.

Think of this most simply: If you use data to insure that you reach more of the people you care about however you define your marketing target, and you eliminate the wasted delivery among people who don’t buy your category, you will net higher ROI.

We’ve known the value of targeting for years. In 2011, TiVo Research did a study of eight CPG brands and found that for all eight ROI was higher for schedules optimized against audience than age/sex. On average the ROI was 28% higher, with one brand achieving a 61% higher ROI when optimizing for audiences.

The buyers are given no real incentives for bringing up the purchaser density even though TiVo Research has shown that for every 10% increase in purchaser density on average there is a 7% increase in sales ROI or ROAS (Return On Advertising Spend) as it also known. This is real.

We’re quickly approaching a time where TV targeting against audience can be done at vast scale.  As that time approaches, advertisers should rethink their allocation decisions, especially the ones that moved dollars to media that had better targeting but less effective impact.

Image at top courtesy of Corbis. The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage/MyersBizNet management or associated bloggers.