Measurement Is The Key To Unleashing The Power Of CTV ROAS

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Stirista
December 26, 2023
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    As many brands have discovered over the course of the past year, there is a limit to the success of paid search and social campaigns where marketers quickly reach the performance ceiling. Connected TV (CTV) has continued to emerge as one of the better alternatives to traditional linear TV and direct response digital channels. CTV ads can be precisely targeted to audiences at the right time during the high-impact TV viewing experience.

    But, as with any advertising channel, there is a mix of art and science in determining whether a CTV ad campaign directly contributed to a purchase event, especially as viewers see ads in multiple places over a period of time before they convert. As advertising budgets tighten and marketers are being pressed to demonstrate a positive return on ad spend (ROAS), all eyes will be focused on measurement and optimization regardless of channel to drive business-level results and optimal performance.

    Let’s take a closer look.

    While this best practice may seem obvious, many brands begin campaigns without clearly outlining goals. They don’t know what they want to achieve, or how to measure it, but launch the campaign anyway to see what happens. This is a recipe for ROAS disaster.

    Instead, measurement should inform the structure of the campaign. It’s easy and natural to think about measurement as a way to demonstrate success. But measurement can be part of creating success when it’s incorporated into the earliest parts of planning a campaign. In fact, marketers should know what their campaign reports are going to look like before they launch.

    With a well-defined structure and metrics throughout, the campaign also can be optimized at different points within the funnel to accelerate conversions. Building the measurement plan at the outset removes ambiguity and sets expectations that can be shared with stakeholders at all levels.

    Some brands claim that their CTV advertising objective is “brand awareness” or “audience expansion” or “reach.” While it’s better to have quantifiable goals, those vague objectives can still lend themselves to measurements that can connect campaign performance with business outcomes.

    When it comes to CTV, many advertisers don’t realize that they can use view-through attribution to tie their awareness ad spend to online and offline conversions. That’s a tangible business performance result that justifies their media spend.

    With the abundance of data available today, it can be difficult to home in on the most meaningful metrics and easy to settle on “vanity” metrics. It’s also true that not every business is going to have a high number of bottom funnel conversions. This is particularly the case for B2B enterprise providers, where extended sales cycles are the norm. Choosing meaningful metrics to report on is more than half the battle.

    For those brands with low-volume purchase events, the top and middle of the funnel might provide useful metrics, especially since it could take a much longer time to collect optimization data from the bottom of the funnel. You don’t want to blow through the ad spend and find you have nothing to report. So, look for top and mid-funnel conversion events that happen more frequently and optimize on those. As an example, if it takes a few months for a prospect to even fill out a lead form, measure the fact that they are visiting the site, downloading content, or attending a webinar.

    Marketing spend inevitably comes under increased scrutiny during uncertain economic times. Many executives are expecting three to four times ROI on overall marketing spend, which means marketers must be prepared to account for their budgets and quantify advertising results. If CTV, or any channel for that matter, is not meeting its objectives, then business performance reporting will quickly highlight where decisive action is needed.

    CTV advertisers must anticipate the hard questions, especially if their objectives were not well-communicated at the start. Business leaders may want more proof that the ad spend was justified, and this is where top-of-funnel and mid-funnel metrics will come in handy. Building those measurements in from the start and collecting campaign data throughout will avoid a panicked scramble when a higher-up asks what the campaign achieved.

    Final thoughts

    Good data never goes to waste. Even if you’re not being asked to report on a particular metric, you can still use the data for campaign optimization. Measurement is not just about reporting results; it’s also about improving the results. Use your campaign data to keep refining your targets, messages, creative, and more.

    Communicate early and often. Have conversations at the outset of the CTV campaign planning process about expected outcomes and what will be measured. Keep those lines of communication open as the campaign progresses to avoid any unpleasant surprises.

    The preparation, measurement, and optimization you do for your CTV campaign will ultimately pay off in lower costs per conversion and higher return on ad spend.