Outdoor Advertising – How to Measure ROI

outdoor advertising strategy Outdoor Advertising   How to Measure ROIHow you measure ROI (return on investment) of outdoor advertising is crucial when calculating the bottom line impact of marketing and advertising strategy. Many advertisers combine multiple media outlets in a unified advertising strategy, including online, radio, television, email blasts, outdoor and others. The goal of strategic communications ‘confluence’ is to make multiple impressions on a target audience. Measurement of the effect of each communications vehicle is necessary to make the best use of every ad dollar spent.

Analysing the factors contributing to an outdoor advertising campaign’s success or failure will help the advertiser to continually improve its effectiveness, according to studies published in the Journal of Advertising Research. (1993, 1994, 1996, and 1999) Basic suggestions for improving the effectiveness of outdoor advertising include “improving readability” of the product or brand offered on outdoor advertisements. Understanding how well consumers process outdoor advertisements may include: response times needed to heed the ad’s call-to-action (sometimes within seconds, depending upon where the advertisement is strategically positioned); and impact of content and format of the outdoor ad to persuade immediate action.

Business types and outdoor advertising

According to author Gary Dahl (“Advertising for Dummies,” 2011), creative outdoor advertising is a cost-effective tool for many kinds of businesses. The Altoids breath mint brand was introduced and sold to consumers primarily through billboards. Small and medium-sized businesses without large media budgets can use outdoor advertising with great success. Positioning outdoor advertising close to the business location is one of the ways to prompt consumers to act now! In some cases, measuring the ROI of advertising is a simple headcount tally. In others, the business can use a separate phone number or extension to count the number of outdoor advertising responses generated. Simple calculation of ROI involves dividing the number of leads or sales by the total cost of outdoor advertising.

Outdoor advertising formats

Advertising outdoors isn’t limited to billboards or posters. Creative outdoor advertisers use overhead blimps (airships), rest areas, shopping carts, bus benches/shelters/interior cards, commuter rail/subway ads, mall kiosks, parking meters, gas pumps, stadiums/convention centres/arenas, and even public restrooms to advertise products and services. The size or format (i.e. blimp banner or skywriting) can determine the cost of each outdoor ad. Regardless of the format used for an outdoor advertising campaign, advertisers must get the prospective buyer’s attention–fast–and persuade that prospect to act now.

Researchers say that the keys to creating successful outdoor advertising that achieve high ROI include readability and clarity of the message; memorability (of ad content, including graphics); creativity (prompting bored drivers to stop now, eat at the restaurant, drink a frosty cold glass of soda, etc.); and humour (including puns: advertisers should keep outdoor advertising simple, direct and funny to make sales with outdoor advertising).

Return on investment of outdoor advertising

Outdoor Advertising ROI Outdoor Advertising   How to Measure ROIAdvertisers can achieve high ROI by limiting an outdoor advertising strategy to a single sales event over a certain period. For example, a car dealership uses 10 posters (e.g. 20-foot billboards) to attract buyers driving a main thoroughfare. The cost-effective campaign delivers Daily Effective Circulation (DEC) of about 12,530, about 125,300 views per day.* Over the two week posting period, the advertiser achieves a whopping 1,750,000 views. (Because the outdoor advertising company keeps the posters up for longer than the actual two-week period, the advertiser receives ‘bonus’ views.) The advertiser offers a special phone number for the event and a ‘special bonus’ for the first 200 customers.

Mention of the bonus or calling the phone number provided helps the advertiser calculate ROI. The advertiser takes a third step, a post-purchase survey, to analyse outdoor advertising impact. In this example, the dealer calculates a 36 per cent response rate and a record auto sales month.

The analysis does not include tally of other products and services sold as a by-product of the sales event advertising. The outdoor advertising campaign generates gross profit of $24,000 (8 cars x $3,000). Modest cost of outdoor advertising to develop sales leads ($5,693 to create and produce 10 billboards) yields a net return of $18,307, or 322 per cent! (*Traffic or views per day is usually calculated by a third-party service, such as the Traffic Audit Bureau.)

Demographics and outdoor advertising ROI

Advertising researchers acknowledge that targeting a specific demographic base is one of the challenges of outdoor advertising. In the above example, the advertiser limited outdoor advertising to a commuter pathway (the only road consumers use in the suburban area to reach a major highway needed to drive to a nearby city) as a demographic proxy.

About the author:

This piece was written by the team at Site Shade, printed shade cloth advertising suppliers based in Sydney, Australia.

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