Mumbai: India eagerly welcomes festivals with open arms, celebrating the joy and unity they bring. People from diverse backgrounds come together to partake in these festivities, creating a perfect platform for brands to connect with their target
audience, establish a compelling brand image, and achieve financial success.
Measuring advertising return on investment (ROI) can be challenging, especially
during festivals when there is an influx of data. However, this data can be valuable
in making informed decisions, optimising marketing campaigns, allocating
resources, and ultimately increasing profitability. To achieve these goals, brands
must utilise comprehensive metrics and analytics.
1. LTV/CAC Ratio
Checking the Customer Lifetime Value (LTV) versus Customer Acquisition Cost (CAC) is essential for measuring advertising ROI. The LTV/CAC ratio is a key metric to evaluate the effectiveness of advertising during festivals. A ratio greater than 1 suggests that the festival marketing efforts are generating more long-term revenue than the cost of acquiring customers, indicating a positive ROI. A higher ratio indicates a more profitable advertising campaign, while a lower ratio may suggest the need for optimization. One can also determine which marketing channels and campaigns are working best and allocate resources and fine-tune strategies accordingly.
2. New VS Repeat Customers’ Behaviour
Leveraging the festive period for new customer acquisition can be highly effective, as festivals are a time of heightened consumer activity. By starting and planning campaigns well ahead with compelling content and engaging creatives is a good strategy. Indian festivals often have specific audiences, and tailoring campaigns to these segments can yield better results. Publishing festival-themed blog posts, articles, and videos that provide value to your target audience, for eg., festival guides, DIY ideas, and cultural insights can be fruitful to acquire new customers and also engage existing consumers.
Analysing New vs Return purchase trends is also extremely crucial as it helps to make informed decisions regarding customer acquisition, retention, and advertising strategies. It ensures that advertising ROI measurement takes into account the diverse behaviours and preferences of these two customer segments, ultimately contributing to better ROI.
3. Gross RoAS VS Net RoAS
Gross RoAS is the total revenue generated from advertising campaigns whereas Net RoAS takes into account deductions and expenses like returns, cancellations, etc., associated with the campaigns. Gross RoAS helps assess the immediate impact during festivals but Net RoAS provides a more accurate picture of the true profitability of the festive campaigns. While festivals can drive increased sales and revenue, they can also be associated with higher rates of cancellations and returns. Tracking this helps identify patterns and trends. One can determine if certain product categories, promotions, or marketing channels are more prone to cancellations or returns. It also provides insights into customer satisfaction, product performance, and the effectiveness of advertising campaigns.
4. Attribution modeling
Attribution modelling plays a crucial role in measuring advertising ROI as it helps advertisers understand how different touchpoints and marketing channels contribute to conversions and revenue. In the context of festivals in India, where diverse marketing strategies and regional nuances are at play, attribution modelling becomes especially valuable. It helps you track the customer journey across various touchpoints, such as social media, email marketing, search ads, and offline promotions. This understanding is essential for optimizing your marketing mix. By this data, you can segment your audience based on their behaviour and preferences. This segmentation can inform personalized marketing strategies for different customer groups. Attribution modelling can also reveal seasonal trends in customer behaviour and help you plan marketing campaigns accordingly. For example, it can show if early promotional campaigns or last-minute offers are more effective.
5. Conversion rate analysis
During the festive season, consumer spending reaches its peak, causing intense
competition among brands. To ensure maximum return on investment (ROI), it
becomes crucial to assess how effectively advertising campaigns convert interested
prospects into paying customers. In this regard, analyzing conversion rates involves
tracking individuals who engage with festival-related advertisements before
embarking on their buyer’s journey. This analysis provides a comprehensive
evaluation of an advertising campaign’s efficiency and effectiveness.
All things considered
In India, festivals are not just events but also cultural milestones that brands can
embrace to connect with their customers. In these vibrant times, it has become a
crucial endeavour for them to measure ROI on their advertising campaigns. To do this effectively, brands can leverage data-driven metrics and analytics strategies for valuable insights into consumer behaviour, campaign performance, and ROI. This information also allows brands to optimize their marketing strategies, efficiently allocate resources, and take advantage of increased consumer engagement and spending that typically occur during festive periods. Ultimately, by utilizing the power of metrics and analytics, brands can drive themselves towards success and profitability.
This article is authored by ETML co-founder and COO Amitek Sinha, a leading growth advertising & analytics company.
