Out-of-Home (OOH) advertising remains one of the most effective marketing strategies today. From billboards to digital videotrons, OOH ads can reach a broad audience and boost brand awareness.
But does OOH advertising truly deliver a profitable return for your business? To ensure its effectiveness, you need to know how to calculate OOH ad ROI accurately. In this article, you'll learn the steps to measure ROI, the challenges involved, and how to increase ad ROI for your OOH campaigns.
How can you determine whether your OOH advertising investment is yielding a profit? Return on Investment (ROI) is a key metric used to measure the effectiveness of business investments, including advertising.
ROI indicates how much profit is generated compared to the cost incurred. By calculating ROI, you can assess whether your OOH ad campaigns are making a positive impact or need reevaluation.
A common formula used for ROI analysis is: ROI (%) = [(Revenue from Ads – Advertising Cost) / Advertising Cost] × 100
For example, if you spend IDR 50 million on an OOH campaign and generate an additional IDR 150 million in revenue, your ROI calculation would be: ROI = [(150M – 50M) / 50M] × 100 = 200%
This means that for every IDR 1 spent, you gain IDR 2 in profit.
Calculating Return on Investment (ROI) for OOH advertising requires a structured approach for accurate results. Understanding the right steps allows you to evaluate campaign effectiveness and optimize future marketing strategies.
Every advertising campaign should have clear objectives. Are you aiming to increase brand awareness, drive sales, or attract more customers to your store?
Setting specific goals makes it easier to measure campaign success. Without clear objectives, it becomes challenging to determine whether your OOH ad ROI is high or low.
To accurately calculate ROI, track all expenses related to the campaign. These costs include:
Knowing the total expenditure helps ensure a precise ROI calculation.
a. Brand Awareness
How can you tell if your campaign is increasing brand awareness? One method is through surveys or social media analytics.
If brand searches on Google increase or there is a spike in social media interactions after launching the campaign, your OOH advertising has successfully enhanced audience awareness.
b. Traffic Increase
If your goal is to drive traffic to your store or website, monitor the changes before and after the campaign.
Use tools like Google Analytics to track website visit spikes. For physical stores, compare visitor numbers during the campaign period with previous periods.
c. Sales Growth
The most concrete way to measure ROI is by tracking sales growth. Analyze sales data before and after the campaign.
A significant increase suggests that your OOH campaign contributed to this growth.
d. Other Metrics
Besides the key metrics above, additional factors can help measure ROI:
Once you've gathered all necessary data, use the ROI formula mentioned earlier. Ensure all factors, such as costs and results, are accurately measured to reflect the campaign's true effectiveness.
Source: CIty Vision
A high ROI indicates that your advertising investment is delivering optimal results. To achieve this, here are some strategies to make OOH campaigns more effective and profitable.
Location is a crucial factor in the success of OOH ads. Ads placed in high-traffic areas will be more effective than those in quieter locations.
Select locations based on your target audience. For example, if targeting office workers, place ads in business districts or commercial centers.
An attractive design increases the likelihood of audience attention. Use contrasting colors, easy-to-read text, and striking visuals.
A short yet powerful slogan can also help audiences remember your ad message more effectively.
Technologies such as digital OOH or videotrons can enhance your ad's appeal. With dynamic displays and flexible content updates, ads become more relevant and engaging.
Use features like programmatic advertising to display ads at the most effective times and locations.
OOH advertising is more effective when combined with digital marketing strategies. Add QR codes or calls to action directing audiences to your social media or website.
This integration allows for better tracking of campaign effectiveness.
Measuring OOH ad ROI is often more complex than digital ads due to limited direct tracking. However, using the right methods can help analyze its impact and improve ROI accuracy.
Linking direct sales to OOH ads can be challenging since many factors influence purchasing decisions.
Solution: Use unique promo codes or specialized URLs to track campaign impact on conversions.
Unlike digital ads that can be tracked in real time, estimating how many people view OOH ads isn't always straightforward.
Solution: Utilize traffic data or AI-powered cameras to estimate the audience exposed to your ads.
Some tools that help measure OOH ad ROI include:
Read Also: 5 Powerful Ad Segmentation Strategies for High ROI
Calculating OOH ad ROI is essential to determine campaign effectiveness. By understanding ROI concepts, identifying costs, and measuring results through various metrics, you can assess whether your OOH investment is yielding optimal profits.
Want to maximize your OOH ad ROI? Consult with the City Vision team. As Indonesia's top OOH Media Provider, City Vision helps plan, measure, and optimize your OOH campaigns. Contact us today!
