What Kind of ROI Can you Expect from TV Advertising

Molly Baade

Molly Baade About The Author

May 18, 2021 10:30:00 AM

What Kind of ROI Can you Expect from TV Advertising

TV advertising is a vital tool that can potentially present your ads to millions of customers. Its  ROI is incredibly high compared to other ad platforms when it’s appropriately used. Maximizing your TV advertising ROI requires you to know how to launch a successful campaign that connects with the right people at the right time. Here we'll review what exactly ROI is and how high ROI is one of the key benefits of advertising on TV.

Discover How to Succesfully Measure Your ROI

What Is ROI?

ROI, or return on investment, is the measure of profits made from an investment, including TV ads and other advertising efforts. You can calculate the ROI of your investment with this equation:

ROI = (Value of Investment - Cost of Investment)/Cost of Investment x 100

Subtract the value of the investment from its cost, then divide this net return by the overall cost of the investment. Multiply the results by 100 to set the result as a percentage. That gives you the total ROI from your investment, indicating its profitability.

Screen Shot 2021-04-19 at 4.29.44 PMIn TV advertising, advertisers typically look for an increased gross sales margin following a campaign. You may spend around $1,000 on a TV ad campaign that lasts for a month. If you see a sales increase of $5,000, the value minus the initial cost has a gross sales margin of $4,000. To calculate ROI, you would divide the $4,000 gross sales margin by  the $1,000 ad campaign, which results in an ROI of 400 percent. In other words, for each dollar spent on ads, the company earned $4. 

With an effective and worthwhile ad campaign, you can see high ROI that dramatically boosts sales in the long term.

How Much ROI Should You Expect from TV Ads?

If you want your TV ad campaigns worthwhile, a good TV advertising ROI is around 300 to 500 percent. Today, TV advertising still yields tremendous ROI, especially when implemented based on your specific goals. Depending on what you want to achieve with your ads, your campaigns’ ROI might look somewhat different. A TV ad’s primary goal usually is to increase brand awareness or boost sales for a particular product or service. Using the right messaging, visuals, and content, TV advertising is more than capable of achieving these goals.

The best way to get the highest ROI from your TV ads is to combine TV and digital marketing. When used separately, TV and digital marketing can each have their respective benefits, but a combined approach will heighten your advertising efforts. For instance, you may have a TV ad that increases brand awareness and introduces new audiences to your brand. Meanwhile, digital ads may appear in front of those audiences who initially recognize you from your commercials. Over time, these audiences may encounter your brand on both TV and on various websites so your brand comes to mind when they're ready to buy.

Your TV ads could also encourage people to visit your website directly, leading to a significant increase in traffic and, ultimately, more leads. 

How Do You Guarantee a Successful Campaign?

Screen Shot 2021-04-19 at 4.29.36 PMDeveloping quality commercials ensures the best chance of reaching and connecting with your audience to drive high ROI. If you can create a commercial that stands out and differentiates you, your brand will stay top-of-mind when consumers need to make purchases. Creating a killer TV commercial will give you the upper hand over competitors and make sure your brand is unforgettable. 

To get the most from your commercials, you need to make sure it aligns with your overarching campaign goals. Knowing what you want to achieve with your commercials will inform the creative and message. You'll also be able to measure the results of your ads to gauge ROI more effectively. If your ad's primary goal is to build brand awareness, impressions and website traffic could be the metrics that help define the campaign's success. If the goal is to increase sales, monitoring conversions and overall sales will be necessary to measure ROI.

Using TV advertising as part of a comprehensive, integrated marketing campaign will further boost ROI and make sure your ads perform optimally. Try to complement your ads with digital counterparts and campaigns, solidifying your messaging and further keeping you in your audience's minds.

Work with a Media Partner for Effective TV Advertising

With specific goals in mind and well-produced TV commercials, you'll be able to reach more people and stand apart from your competitors. The key is knowing how to put your commercials together, which may not be as clear if you're new to commercial production. To increase your chances of succeeding with a complete ad campaign, consider working with an experienced media partner. You'll be able to leverage their expertise to drive long-term results, helping you not only produce but also land the best placements for your ads.

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