Using the SOV/SOM multiplier to measure the ROI of creativity
Between 1991 and 2005, I accumulated 4.5 million miles in American Airlines alone and travelled for business between 39 and 49 times per year. Ive heard the fasten your seatbelts spiel what, 500 times? At some point, you hear, but you dont listen. Road warrior lore has it that an American Airlines flight attendant once began her speech: Listen up, there might be 50 ways to kill your lover but I can guarantee there are only six ways to leave this plane. And people actually listened.
In a previous column, I argued its the message not the medium. But what gets you to notice the message is the creative. So, if what you say is important, how you say it is even more important. Now, how would you go about calculating the ROI of good creative? Heres a process Ive used for years:
- Its easy for direct response: Lets say Im getting 12 calls per spot for a particular network/day part combination and Im paying $1,000 per spot with a conversion ratio of 18 percent. The cost/call is $83.33 and my cost/sale is $462. If, through a better spot I can just get 13 people to call, the cost/call will fall to $76.92 and the cost/sale to $427.
In real life, we took a spot we inherited from one of our clients and, with a few small changes and a quick reshoot, took the calls/spot from 4.3 to 14. Same schedule. Same programs. Creative increased media ROI by 325 percent.
- In regular branding advertising measurement might be more difficult, but it is still very doable:
- Online surveys can be used to gauge anything from changes in how an ad gets noticed to changes in intent to purchase
- Test markets can be run and, using distribution or sales data lift can be measured
- A special offer can be incorporated into the ads
A typical TV spot in any of our networks might be seen by 250,000 people. But it might really impact only 1 or 2 percent, meaning 2,500 to 5,000 people. If the creative is noticed by an additional 1 out of every 100 people, you just increased your audience by anywhere from 50 to 100 percent. In real life, if you are getting OK results from being noticed by only 5,000 people, imagine how much better it would be if you were noticed by an additional 2,500.
About the author
Marcelo Salup's 30+ years career in advertising covers a wide range of everything. A wide range of roles -he began his career on the creative side, won 2 Addies, changed to media, included strategic planning and consumer insight and has been an agency owner several times. A wide range of venues: Spain, Latin America, International and the U.S. A wide range of clients that go from automotive through banking, electronics, fast food, soft drinks and much more. But can summed up in four words "Only Performance is Real". Today he is "Left Brain" at Montano + Salup Communications.