TV remains most effective way to advertise
| 15 May 2014
Despite the last few years' recessions in key markets and constant upheavals in media technology and consumption, television has maintained its preeminence in advertising sasy new Ebquity research.
The standout conclusion of the Payback 4: pathways to profit report commissioned by Thinkbox, the trade association for commercial broadcasters in the UK was that fundamentally TV creates the most profit for businesses pound for pound. Ebiquity also found that over the last seven years TV gave an average return of £1.79 for every £1 invested during 2011-14. This is up from £1.70 for every £1 invested during 2008-11. TV also consistently demonstrated the highest return on investment (ROI) of any form of advertising over the period.
Reasons cited by Ebiquity for TV's increasing effectiveness include multiscreen users being able to act instantly on what they see; advertisers' more sophisticated understanding of how to employ multiple TV ad opportunities and integrate them with other media; a golden age of TV content creating a higher quality environment for advertisers; as well as the falling cost of advertising on TV in recent years.
Payback 4 also found that TV advertising is twice as effective at creating sales uplift per equivalent exposure than the next best performing medium (press) and also creates a halo effect across a brand's portfolio. As much as 37% of TV's sales effect was found to be felt by products not directly advertised in the TV campaign. TV also created 33% more branded online searches per TV rating point during 2011-14 than in 2008-11.
Based on the effectiveness analysis, Ebiquity believes it has discovered the optimum share of advertising budgets that should be spent on TV. For both Finance and Retail brands, 60% of the ad budget should ideally go on TV; for FMCG brands, it says it should be significantly more than this with Ebiquity identifying a major opportunity for them to increase investment in TV.
Total TV advertising revenue in the UK increased by 3.5% in 2013 to reach a new record high of £4.63 billion, according to full year revenue figures provided to Thinkbox by the UK commercial TV broadcasters. This was the fourth consecutive year that TV ad revenue has grown in the UK. "Advertisers know that TV advertising works because they see the effect it has on sales and profit both in the short and long-term," commented Neil Mortensen, research and planning director at Thinkbox. "But it is essential we continue to prove it and explain why TV is such an effective investment."