The recent Nielsen Catalina study that quantified Radio’s impact on sales is a long overdue much needed piece of research that’s hopefully the first of many such studies yet to come. But it is important when discussing it with savvy marketing decision makers that we understand what it is and what it is not. It is not a return on investment (ROI) study but a study that quantifies return on ad spend (ROAS). There is a huge difference between the two not only in definition but in the eyes of the CMO and CFO. In its simplest form, ROI is determined by dividing the net profit generated by an advertising campaign by the amount spent to generate this new profit. In its truest form ROI quantifies the amount of new profit that’s derived via the investment of previous profit. That is not what the Nielsen Catalina study quantified.
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The recent Nielsen Catalina study that quantified Radio’s impact on sales is a long overdue much needed piece of research that’s hopefully the first of many such studies yet to come. But it is important when discussing it with savvy marketing decision makers that we understand what it is and what it is not. It is not a return on investment (ROI) study but a study that quantifies return on ad spend (ROAS). There is a huge difference between the two not only in definition but in the eyes of the CMO and CFO. In its simplest form, ROI is determined by dividing the net profit generated by an advertising campaign by the amount spent to generate this new profit. In its truest form ROI quantifies the amount of new profit that’s derived via the investment of previous profit. That is not what the Nielsen Catalina study quantified.
