Just how effective is TV advertising? Payback 4 is a study published by the market insight company Ebiquity in 2014 that found TV advertising provides an average return of £1.79 for every £1.00 invested.
Despite significant changes in technology and viewing habits TV shows a profit increase of 5% since the 2008-11 period of the earlier Payback 3 study. TV advertising remains the most effective form of advertising, and creates the most profit for the brands that invest in it.
The Payback 4 report – which focuses on TV advertising effectiveness – highlights the continuing effectiveness of the medium is largely because of television’s ‘halo effect’ which improves the performance of other forms of advertising. The halo effect is not only proven to lift the profile of other media, it has also demonstrated to lift the sales of products which are not featured in the advertising – i.e. if a beauty brand advertises shampoo, sales of its deodorant or moisturiser also benefit from the campaign.
We know from many of our clients that the television commercial is the linchpin of a campaign from which the radio, newspapers, magazines and direct mail hang. TV builds brand-awareness and recall which raises the perceived profile of advertising in other mediums during the same period. Press, Social Media and Search are all greatly enhanced by the kick-start and continuing visibility that television brings to a cross-media marketing push. TV advertising also massively increases online searches for the advertiser, the Payback 4 study showed an increase in branded search traffic of 33% per rating point since the 2008-11 Payback 3 study. Most positively the study found that the greatest beneficiary of the halo effect was to radio campaigns running during the same period, where effectiveness is increased by a whopping 100%.
Amid the negative forecasts for the future, the study has shown how advertising has performed in recent years against a landscape of such a major financial downturn.
Television advertising was shown to have delivered the most profit, creating on average a return of £1.79 for every £1.00 invested. This compares to £1.48 for radio, £1.40 for press, £1.06 for static online display, and £0.45 for outdoor advertising. Neil Mortensen, Research and Planning Director at Thinkbox reinforces the study’s findings, “Advertisers instinctively know that TV advertising works but we must make sure we continue to prove it. Ebiquity’s study does exactly that. Our task now is to share this important information with businesses and show them that no other form of advertising creates more profit than TV.”
In addition to these findings bucking the trend of the economy, other findings showed that television is 2.5 times more effective in creating sales uplift per equivalent exposure than press, which is the next best-performing medium. Ebiquity’s database, which was drawn on to compile the report, measured the effect of advertising across 3,000 models, 9 categories and more than 100 UK clients. Television was found on average to be responsible for 71% of attributable sales, yet only accounted for 55% of ad spend.
Andrew Challier, Effectiveness Practice Leader at Ebiquity, describes the continuing confidence in broadcast advertising, “TV is weathering a perfect storm of economic downturn and increased competition from emerging media. Its unrivaled effect on sales and profit and its profound influence on other media make TV advertising both the most effective form of advertising and a powerful ally to other media and marketing mechanics, both on and offline.”
How effective is TV advertising? Simple – it’s the most effective!