Maybe Your CAC Was Never All That: Separating TV And Digital Performance Fact From Fiction

Matt Collins

SVP, Marketing

I don’t know anyone who hasn’t had a sinking feeling that something feels off. Even Tom Brady must occasionally drive by his favorite grocery store on the way home from practice with the vague notion that he needs to restock something (probably cases upon cases of avocados).

Marketers and analysts responsible for measuring media performance occasionally experience a similar feeling. Not just doubts about whether they locked their car doors, turned off their ovens, or even whether they need avocados, but how much they can trust their reporting on customer acquisition costs (CAC), cost per install (CPI) or cost per visitor (CPV). Even though their TV CACs, CPIs or CPVs may look great, their guts are telling them that they are about as real as the Miami Dolphins’ playoff chances this year.

When we analyze historical campaign performance, we often find that those sinking feelings are justified. That’s because other vendors sometimes do claim too much credit for the TV campaigns they ran.

Here, we talk about why overly aggressive attribution on TV happens, and we offer a better way of setting performance expectations related to your TV advertising.

Why overly aggressive attribution on TV happens

TV vendors may take more credit than they should because their clients hold their TV campaigns to the same performance standard that they apply to their digital advertising. In order to keep their clients happy, these TV vendors may take credit for more than they should. To show a low-cost metric, they may count any spike in install, site visit or acquisition above an average. (I could write a whitepaper on how to measure attribution on TV properly, but counting anything above an average results in taking credit for events that almost certainly would have occurred randomly on their own in the absence of TV ads airing.)

TV and digital are different and should be measured differently

Not only do we disagree with this lax methodology; we also believe TV and digital should be measured uniquely. That’s because customers experience them differently, on different devices and in different contexts. As such, they each serve a unique purpose.

Table showing the key differences separating TV and digital in terms of optimal funnel stage, what it's best for, path to conversion, and how to measure.

Digital media exists closer to the moment of conversion. With one click or tap, consumers can jump from an ad to a product listing.

TV has been, and always will be the most effective medium for making it easier for customers to remember brands, go online to learn about the products they see advertised, and buy them when the right moment arrives. It eliminates much of the mental processing required to make a purchase decision and replaces it with a feeling - “I trust this brand” or “This brand entertains me” or “I swear I see six-pack abs on myself whenever I use this brand.”

For these reasons, some of today’s most successful and largest direct brands (think of Booking.com and TripAdvisor) assess TV based on the volume it drives to a website or app (this is in addition to any changes in brand perception they monitor). If you must hold every channel to the same CAC metric, then compare TV’s results specifically to your brand’s prospecting work on Facebook.

Dollar Shave Club’s ‘Our Blades Are F***ing Great’ video on YouTube has been seen over 26.5 million times. That’s just 4.5% of the 590 million impressions it has gotten via TV advertising.

“TV pitches. Digital catches.”

Put TV and digital together, and the results can be symphonic.

TV delivers people to your app and website at scale, giving your digital presence and customer experience the opportunity to convert them into paying customers.

In addition, digital marketing flourishes when executed in conjunction with an initial stimulus delivered at scale. Before Dollar Shave Club launched its initial video campaign, who searched for “subscription men’s razors?” It took the sight, sound and motion of video - and linear TV in particular - to drive viewers to their search engines and social media feeds. (Perhaps you’re thinking, “Gotcha, Simulmedia! This proves how powerful YouTube and viral videos can be.” Not so fast. This video has been watched over 26.5 million times on YouTube, but that’s just 4.5% of the 590 million impressions Dollar Shave Club got by advertising an edited version of this video on linear TV.)

You can see, therefore, that when it comes to media, TV pitches and digital catches.

TV performance makes digital advertising more efficient

That’s not to say that TV can’t be optimized for improved performance over time. Give us an ad that’s both memorable and delivers a clear call-to-action, and we can deliver some pretty fantastic results. We’ve run campaigns for mobile app providers and reduced CPIs to levels that rival performance on Facebook. We’ve also seen TV make digital CPIs significantly less expensive.

In closing, Simulmedia can eliminate one possible source of foreboding in your life by giving you a clearer, more responsive view into your TV campaign performance, showing how TV affects your digital campaigns, and building a path to make them more effective.

And just in case, make sure you don’t leave that cup of coffee on the roof of your car as you pull away from the house tomorrow morning.

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