ROI: TV advertising is top
In light of the changes in the media landscape, marketing decision-makers are asking themselves more than ever what return on investment (ROI) their advertising francs are generating—and which media formats are the most efficient and effective.
The latest "Payback 4" study, which was conducted by the marketing performance specialists at Ebiquity on behalf of the British industry organization Thinkbox, shows that TV advertising is top in terms of both efficiency and effectiveness in an inter-media comparison. According to an econometric analysis of 4,500 advertising campaigns, the impact of TV advertising has actually increased over time - TV advertising has never been more efficient and effective than it is today.
First of all, the statistical studies show that every pound invested in TV advertising in the period from 2011 to 2014 returned an average of £1.79. No other media category examined achieved a comparable return. TV is followed at some distance by radio with an ROI of £1.52 and print media with a return of £1.48. Online display advertising only achieves an average return of 0.91 pounds per pound invested, while outdoor advertising performs even worse with an ROI of 0.37 pounds.
Particularly interesting: TV advertising not only achieves the highest ROI in an intermedia comparison - according to the study, its efficiency has even increased over time. In the period from 2008 to 2011, the average return on TV advertising was 1.70 pounds, from 2011 to 2014 it was 1.79 pounds - an increase of 5 percent. Radio (+3%) and print advertising (+6%) have also gained in efficiency, while online display (-14%) and outdoor advertising (-18%) have lost significantly. A more detailed analysis of individual product categories shows that TV advertising not only achieves the highest efficiency values overall, but also in all sectors examined - retail, financial services and consumer goods. In retail, every pound invested in TV advertising leads to a profit of 2.87 pounds (+11% compared to 2008-2011), followed by print in second place with a payback of 2.65 pounds. In the financial services sector, the ROI of TV advertising is 2.48 pounds (+3%), well ahead of the return of second-placed radio advertising (1.95). In the consumer goods sector, the ROI is generally lower - but here too, TV advertising achieves the highest efficiency values with a return of 0.63 pounds (+5%), ahead of radio (0.24).
TV advertising not only outperforms other media types in terms of efficiency, but also in terms of effectiveness. On average, TV commercials (index 100) increase sales almost twice as much as print advertising (index 52), the second most effective media category. Radio (27), online display (13) and outdoor advertising (11) are even further behind in terms of effectiveness. Compared to the period from 2008 to 2011, the effectiveness of TV advertising also increased slightly by 2.5% in the period from 2011 to 2014. In addition to these key findings, the study comes to three other interesting conclusions. Firstly, TV advertising for a product also radiates to other, non-advertised offers of the advertising brand: 37% of the total sales effect achieved is attributable to products that are not directly advertised. Secondly, TV advertising significantly increases the impact of other forms of advertising. This multiplier effect of TV can account for more than 100 percent of radio advertising and up to 50 percent of print and outdoor advertising. Search queries on Google & Co. can also be significantly increased by TV advertising. Thirdly and finally, the analyses show that TV sponsorship also achieves a very high ROI. In the sub-sample examined, the payback of TV sponsorship at 0.87 pounds was below that of TV commercials (1.51), but clearly above the return of print (0.70), radio (0.65) and outdoor advertising (0.50).
Clemens Koob
Key facts
- TV advertising is the most efficient intermedially with a profit of £1.79 per pound used (radio £1.52; print £1.48; online display £0.91; outdoor advertising £0.37).
- The efficiency of TV advertising increased by a further 5% in the period 2011-2014 compared to 2008-2011.
- TV advertising (index 100) is also the most effective and achieves twice the sales effect of the second-placed print advertising (52), followed by radio (27), online display (13) and outdoor advertising (11).
- TV advertising has a positive effect on unadvertised own-brand offers (= 37% of the total sales effect).
- TV advertising multiplies the impact of other media (e.g. for radio >100%, for print and outdoor advertising up to 50%).
- TV sponsorship also achieves higher ROI values than other types of media.
