Traverse Insights

It turns out we didn't have an additional $7 million laying around this year in the marketing budget, so we’ll give way to the pharmaceuticals, the soft drink Companies and the makers snacks to dazzle us with their annual showcase of creativity. But if we got serious about wanting to buy some airtime for the big game, we’d naturally put together a business case for it. Since our consulting team is made up of hot-shot CFOs, it almost guarantees that our analysis would be rooted in a series of KPI's in formulas.

 

For the purpose of this post, let's put aside the narrative elements of the business plan. The part of the plan that suggests that Super Bowl ads probably have the power of unmatched exposure in its ability to capture the attention of over 100 million viewers simultaneously. Let's also set aside the fact that when done right, a creative spot can significantly enhance the perception of a brand. Let's also assume that our marketing folks have done exhaustive work in terms of identifying who our target market is and that those buyers will likely be watching the big game. Finally, with none of our competitors placing ads either, there's a good argument that we would have been successful competitively differentiating ourselves against them with an ad.

 

But again, since we are CFOs, we'll build an overly complex model in excel and justify (or axe) the spend based on a carefully created set of data and KPI’s. Ten things we might look at:

 

Cost-Benefit Analysis (CBA): This formula helps quantify the return on the investment by comparing the incremental revenue generated as a direct result of the ad to the total cost of the ad, including production and airtime.

Formula: ROI = (post ad revenue increase - total ad investment) / total ad investment

 

Brand Value Enhancement (BVE): Estimating brand equity before and after the ad campaign can quantify the ad’s impact on brand value. This can be measured through consumer surveys, social media engagement, and brand recognition metrics.

Formula: BVE =  post ad Brand equity - pre-ad brand equity

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Competitive Advantage Index (CAI): By comparing market share before and after the ad, companies can evaluate the ad’s effectiveness in improving their standing relative to competitors.

Formula: CAI =  (market share post add - market share pre-ad) / market share pre-ad

 

Audience Engagement Rate (AER): This metric assesses how effectively the ad engages viewers, indicating the quality of audience interaction and interest in the brand post-advertisement. Competitive Advantage Index (CAI): By comparing market share before and after the ad, companies can evaluate the ad’s effectiveness in improving their standing relative to competitors.

Formula: AER = engagements (social Media mentions, website Visits) / total Viewership

 

Customer Lifetime Value (CLTV) Increase: This formula helps quantify the long-term value generated from new customers acquired as a result of the Super Bowl ad. It measures the increase in the average lifetime value of a customer, multiplied by the number of new customers, to estimate the ad's impact on future revenue. Formula: CLTV Increase=(post-ad CLTV−pre-ad CLTV)×new customers acquired

 

Cost Per Acquisition (CPA): CPA calculates the cost to acquire a new customer through the Super Bowl ad. It provides a direct measure of the efficiency of the advertisement in driving new business, allowing for comparison with other customer acquisition strategies.

Formula: CPA= total ad investment / new customer acquired

 

Brand Awareness Lift: This formula measures the percentage increase in brand awareness among the target audience as a result of the Super Bowl ad. It reflects the ad’s effectiveness in enhancing the brand's visibility and recall.

Formula: awareness lift = (post ad awareness Level - pre ad awareness level) / pre ad awareness level

 

Social Media Engagement Lift: Engagement Lift calculates the increase in social media interactions (likes, shares, comments) following the ad's airing. This metric is crucial for understanding the ad's resonance with viewers and its viral potential.

Formula: EL = (post ad social engagements - pre ad social engagements) / pre ad social engagements

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Incremental Sales Growth Rate: This formula assesses the immediate impact of the Super Bowl ad on sales, providing a clear indicator of the ad's effectiveness in driving revenue growth over a specific period.

Formula: ISG = ((post ad sales - pre ad sales) / pre ad sales) X 100%

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Media Value Equivalent (MVE): MVE compares the cost of the Super Bowl ad with the estimated value of obtaining similar media coverage through other channels. This calculation helps assess whether the investment in the Super Bowl ad provided a cost-effective way to achieve comparable visibility and exposure.

Formula: MVA = equivalent media coverage value - total ad investment

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