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3 Quick Ways to Dramatically Improve ROMI Without Spending a Penny More

April 30th, 2014

In the  2010s there may be no better mantra for the marketing function than the old adage “work smarter, not harder”.  Faced with stagnant (or declining!) budgets and staff levels, it is no longer practical to use brute force ad spending to drive marketing returns.  Instead marketers are seeking ways to apply new technology to existing data so as to squeeze out every drop of value.  Towards this end, we are providing all TouchPoint Plus copytest users free consulting with the newly patented Outlook® Media Planning and Forecasting tool.   Below are three examples of how this is being used to help television advertisers immediately ramp up returns with no additional outlay of time or money.


Customized ad refreshment schedules.  It is now well established that the selling power of an ad diminishes as media is placed behind it.  To avoid wasting too much spend behind worn out ads, rules-of-thumb have been created (e.g. not airing an ad for over 1200 GRPs).  Such broad rules are ‘generally right, but specifically wrong’ in that they neglect the fact that each ad wears out at a different absolute rate depending on its strength.  The Outlook application uses this knowledge to algorithmically find the optimal allocation across available ads, sometimes yielding millions in additional sales.


Mix of different length ads.  Facing pressure to reduce paid media while expanding effective reach, many advertisers are rediscovering the cost effectiveness of shorter length ads.   At 60% to 70% of the media cost of their 30-second counterpart, 15-second ads are particularly attractive for stretching a media budget.  But since shorter length ads generally underperform their longer counterparts there is a risk that overuse will actually suppress returns not expand them.  Generalizations fail to address the problem as they don’t take into account the size of the campaign, the number of ads available, or brand specific effectiveness ratios.  A module within the Outlook application simplifies this decision and, even at the very early planning stage, provides a specific recommendation taking all these variables into account.  As an example, this below scenario finds that a 45%/55% 15 vs. 30-second GRP mix is optimal (this equates to an approximate $3.5 Million / $6.5 Million split for this brand’s planned $10 Million campaign).


Dynamically adjusted media budget.  One of the biggest ROI squelchers is not being able to take full advantage of ‘home run’ creative when it is found.  Without quantification of potential sales impact, management is likely to be risk adverse and not approve reallocation of resources from other marketing activities to advertising.  By projecting likely sales returns, the Outlook forecasting capability translates advertising plans into the language of business.  The end result is greater confidence by management that the switching of resources within marketing, or even boosts to the overall marketing budget, are warranted.   A classic published example of this comes from StarKist Tuna in a Pouch:

The Precision of the model makes it useful in planning the optimal number of executions for a given media plan, planning the optimal allocation of media among advertisements, and determining when commercials have worn out and should be refreshed.  In our case, the model revealed not that out ad had worn out, but that it had a significant amount of selling power left.  In fact, the planning software projected that our “Fisherman’s Wharf” execution still retained over 80 percent of its selling power!  We took this recommendation to management, and they approved a few more million dollars for our TV media budget.  The ad went back on air in January.  Tuna in a Pouch share gain for the following quarter was 1.3 points, a bit higher than the Outlook estimate of 1.0 points for the expected advertising contribution.1

The end result for StarKist was a 368% return on their investment.  This was versus a 76% return without the increase in spend and an expected break-even had the traditional approach been done.

The above highlights just three of the many ways that Outlook planner can help boost marketing returns.  But hopefully they illustrate that the technology exists to help meet today’s ‘less must be more’ reality.

1A true return on investment… Developing and managing advertising for StarKist Tuna in a Pouch, Barry Shepard.  Quirk’s March 2003.  Bold emphasis added.


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