TV is at the heart of advertising effectiveness

TV has always been amazing value because it delivers more profit than any other advertising investment, both in absolute terms (return minus investment) and proportionately to spend (return divided by investment). Intermediate media metrics like CPT (cost per thousand) can be misleading when you are seeking true ROI. But don’t just take our word for it, here is a summary of major and impartial studies that will give you the hard evidence, plus links through to the full versions.

The Payback Study

In 2007 Thinkbox commissioned PriceWaterhouseCoopers to undertake a long-term impartial financial analysis of marketing investment. The Payback Study is the biggest study of its kind, looking at over 10 years of data for over 700 brands in seven different market sectors (cereals, haircare, fruit juices, motor insurance and cars x3). It combined rigorous econometric analysis, measuring overall profitability and market shares, with a conjoint study to isolate the intangible asset of the brand alone.

The main findings were:

• TV delivered the highest return of any medium; £4.5m per £1m spent.
• TV delivered value for longer. The first year’s TV investment was still delivering at 80% of the Year 1 level in Year 2, and even Years 3 and 4 were befitting from TV investment in Year 1.
• TV also demonstrated the highest correlation between brand value (based on WTP -willingness to pay) and investment using an innovative research technique to evaluate how consumers value brands.
• With one exception, TV was the dominant medium used by the brand leaders in each sector and all of them were above-average TV investors compared to the average for their market. TV investment almost perfectly correlated with brand value, far more so than for any other marketing channel.

Payback 2

In late 2008 we commissioned a second wave of the Payback study from PwC. This enabled us to do 2 things. Firstly, using the original 7 markets, we could look at how the downturn and alarming drop in consumer confidence across 2008 had affected brand values and consumers’ ‘WTP’ for brands. We also extended the conjoint study to 3 new markets (plasma TVs, mobile phone providers and transatlantic airlines).

The main findings were:

• Creatively-awarded campaigns are 12 times more efficient at delivering business success
• Creatively awarded campaigns are much more likely to be ‘emotional’ than ‘rational’ (47% vs. 35%).
• Creatively-awarded campaigns are becoming more efficient over time, whilst non-awarded campaigns are becoming less so.
• Investing in creativity is a powerful way to achieve fame (i.e. buzz).
• TV constitutes the largest element of Gunn Report scores used in this analysis (77%), followed by press and online.
  

Payback 3

Payback 3, an independent study commissioned from Ebiquity by Thinkbox, is an econometric analysis of 3,000 ad campaigns across nine advertising sectors between 2006 and 2011. It compared, on a like-for-like basis, the sales and profit impact during the last five years of five forms of advertising: TV, radio, press, online static display and outdoor.

The key findings were:

• TV advertising delivers the most profit (an average return of £1.70 for every £1 invested),
• TV ROI is 22% higher than 5 years ago, despite the recession.
• TV advertising is 2.5 times more effective at creating sales uplift per equivalent exposure than the next best performing medium (press);
• TV advertising has a ‘halo effect’ across a brand’s portfolio. 38% of TV’s sales effect is felt by products not directly advertised;
• TV’s ‘halo effect’ also makes other forms of advertising work harder;
• TV is responsible for 71% of attributable sales in Ebiquity’s database, but only accounts for 55% of spend.
  

Marketing in the Era of Accountability

All of this proved that TV advertising is the most reliable driver of profit in these uncertain times and that TV delivers instant results as well as delivering over the long term.

2007 also saw the publication of 'Marketing in the Era of Accountability' by Les Binet and Peter Field on behalf on the IPA. This was a meta-analysis of 880 IPA Effectiveness Awards entries across 26 years. This book is crammed full of wisdom and insight. It challenges many commonly held beliefs in marketing about acquisition vs retention, and mass vs niche targeting. It also explains why a focus on ROI at the expense of effectiveness will lead to declining profits and market share!

This book covers many topics but media planning is one of them and TV emerged as the most effective medium by far, particularly when used with up to 2 other media.

The main findings were:

• Campaigns which used TV are on average 25% more effective than ones which did not
• Campaigns which used TV as the lead medium are more likely to generate large business effects
• TV is getting more effective over time and is now about 40% more effective pound for pound than in the '80s.
• TV creates emotion better than other media
• Fame (which TV excels at) is at the heart of the most effective advertising
• Liking (which TV excels at) an ad is the best predictor of business success
  

You can watch highlights here from the event we staged to present the finding from the first stage of our Payback research and Marketing in the Era of Accountability.

Proof of effectiveness is vital and all our case studies here add individual brand insights to those major market studies. However it's also important to understand why TV is effective; because then both creative development and media planning can benefit from that knowledge.

The link between creativity and effectiveness

This research, publi8shed in 2011, commissioned by Thinkbox and the IPA and undertaken by independent marketing consultant Peter Field, analysed the correlation between campaigns' performance across a wide range of the worlds' most respected creative awards determined by The Gunn Report, and their performance in hard business terms recorded in the IPA Effectiveness Awards Databank between 2000 and 2008. The analysis demonstrates a very strong link between creativity and effectiveness and you can read all about it here.

Main findings

• Creatively-awarded campaigns are 12 times more efficient at delivering business success
• Creatively awarded campaigns are much more likely to be ‘emotional’ than ‘rational’ (47% vs. 35%).
• Creatively-awarded campaigns are becoming more efficient over time, whilst non-awarded campaigns are becoming less so.
• Investing in creativity is a powerful way to achieve fame (i.e. buzz).
• TV constitutes the largest element of Gunn Report scores used in this analysis (77%), followed by press and online.
  

TV and the Brain

TV and the Brain here explains why TV is so powerful: audio-visual moving images consumed in a relaxed and often shared context. Advances in academic topics such as neuro-science, implicit memory and low-involvement processing are helping us make sense of what we've instinctively known for years about TV Advertising, ie that it rocks!

The Thinkbox Engagement Study

The Thinkbox Engagement Study, a ground-breaking ethnographic and quantitative study launched in early 2007, also offers invaluable insight into how people watch telly, what engages them in TV advertising, how they express that engagement and what it means for brands. A summary can be seen here.

All of above are also available as presentations that Thinkbox personnel would be happy to bring to any advertiser or agency.

Tess Alps, Chief Executive, Thinkbox