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RAM calculates how advertising can increase sales with a new ROMI tool

PRESSRELEASE |  January 20, 2017

RAM, a world leading media research company with one of the largest reference databases in communications, launches a simplified calculator that makes it possible to analyze both the break-even point and the financial performance of an ad campaign.

ROMI (Return on Marketing Investment) is maybe a somewhat controversial term but for product advertising it is both credible and commercially relevant. With the help of data from RAM's advertising measurements the ROMI calculation gives the opportunity to both discuss and simulate the reasonable and possible outcome of the campaign.

"In the past it has been difficult to understand, analyze and calculate the economic effects of advertising campaigns. We have changed this by providing a tool for ad sales reps and advertisers to work together in order to understand the real impact that advertising plays in increasing advertiser sales," says RAM's head of research Staffan Hultén.

Advertising that focuses on brand building has the objective of providing a long-term effect and should be measured with the aim of understanding how the brand develops over time. True product advertising however, is used to provide short-term economic effects. RAM' s ROMI-calculator is designed just for this purpose.

The starting point for the calculation is RAM’s advertising effectiveness measurement results. The question concerning buying intentions shows the number of potential customers that the campaign generated - however the figure is often overrated, to varying degrees. Two additional bits of information need to be given to help calculate the true ROMI; the campaign cost and profit/contribution per customer.

romi1sv

The tool automatically calculates the potential total profit. In this example it is 847 600 SEK. 6880 people each contributing SEK 145 in profit / margin per person minus the campaign investment of SEK 150 000. The estimate also suggests that if only 15%, or 1030 people, out of a possible 6880 have answered truthfully, the campaign reached break-even.romi2sv

 

For more information contact:

Staffan Hultén, CAO RAM Group
Telephone: +46 (0)703 249193
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

TESTIMONIALS

The RAM research tools have given us an invaluable insight into customer reactions to online and print advertising, which has helped us to secure this campaign and other similar campaigns from a wide range of advertisers. Return on advertising investment is a key decision making consideration for clients as budgets come under increasing scrutiny. RAM data gives great comfort and security to support decisions and drive creative approaches.

-Richard Bogie, Advertising Sales Director, Johnston Press (Scotland)

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