Agencies, Cable Net Form Task Force, Conduct Research To Define Meaning Of 'ROI'

Measuring the return on advertising investments has always been one of the most sought-after, but elusive goals of marketers and agencies, who have spent more than half a century researching the topic, as well as trying to figure out exactly what "ROI" means. Now, a task force funded by a top cable network and comprised of leading media agency researchers, is trying to define it.

During a meeting to brief reporters on its 2005-06 upfront advertising plans, Court TV will officially unveil the initiative, which includes a survey of marketers and agency executives intended to establish a set of common terms for discussing media ROI. The findings of the study, which MediaPost, the publisher of MediaDailyNews helped conduct, will be presented in detail during the Advertising Research Foundation's annual convention in New York next month.

But Court TV executives say preliminary findings indicate there may be a profound "disconnect" between what advertisers and even media planners intend by media ROI and how media buyers ultimately execute it. In particular, they say advertisers and planners discuss a wide array of concepts in an attempt to define the ROI of their media strategies - using such terms as "engagement," "involvement," "attentiveness" and other criteria to hone their media plans - only to see them reduced to common commodities-like metrics like GRPs (gross rating points) and CPMs (cost per thousands) when the media buys are actually made.

advertisement

advertisement

Court TV is backing the initiative, because its entire sales strategy over the past several years has focused on the concept of ROI, or what the cable channel dubs "return on investigation." It has used an array of media research studies, including custom Nielsen ratings analyses to show which networks deliver the most attentive viewers for TV advertisers. Not surprisingly, Court TV looks good in those studies, and Debbie Reichig, senior vice president-sales strategy, acknowledges that the network uses a media-centric view of ROI, but says that the results are the same as the way marketers and planners see it.

"I come from the media side, so naturally my first inclination is to look at ways to enhance ROI beginning with the media," she explains. "If you can make the media more effective, select ad vehicles that deliver your ad message with more impact the end result is the same as the top down approach - you sell more product."

Ultimately, selling more product is the end game for most advertising strategies, and top marketers have become so consumed by that goal that they are once again exploring the development of an ambitious media and product usage measurement system - the so-called Apollo project proposed by Arbitron and VNU - that would show how sales are impacted when advertising appears across a wide array of media.

Some agency and media executives say that may be going too far - that it is too great an onus for advertising, or at least media buys to be accountable for. San Francisco agency Red Ball Tiger has coined the new phrase "return on involvement" to define what it believes agencies should be measured against, and Carat CEO David Verklin has championed that notion as the appropriate ROI metric for media buying.

The task force initiative hopes to establish a common language for doing that, says Shari Anne Brill, vice president-director of programming at Carat, and one of the agency researchers involved in the effort.

"Every year there is some new buzz word that enters the industry vernacular to define what we do. At one time it was accountability. Then it was all about optimization. Now it's ROI, which is an extension of accountability," she says, adding, "The problem is that ROI means different things to different people. This is a really good attempt to find out what it means - to different parts of the industry and by different groups of people, as well as to different types of advertisers. The ROI used by a movie company is going to be very different from the one used by an automobile company."

The study surveyed agency planners, buyers and researchers, as well as vice president level marketing executives in an effort to establish that base. The initial survey looks at very general definitions of ROI, as well as how they relate specifically to TV advertising buys. Future editions of the research will drill down into specific media.

"Our goal is to understand what guided these buying decisions in the past, and what will be driving these decisions in the future. Is it really ROI? Or is it something else?," asks Court TV's Reichig.

Next story loading loading..