Discover the Power of TV Advertising

There are all sorts of reasons why television advertising is so brilliant at creating success for brands and businesses both in the short-term and the long-term. Here are the top ten, plus supporting evidence and links.

  1. TV is the best profit generator
  2. TV has unbeatable scale and reach
  3. We’re watching more TV than a decade ago
  4. TV is the most talked about medium both on and offline
  5. All TV ads are response ads
  6. TV is the new point of sale medium
  7. TV is the dominant youth medium
  8. TV is THE emotional medium and emotional campaigns are more effective
  9. TV is the catalyst for other media
  10. TV builds brand fame

1. TV is the best profit generator

Acer

There are many ways advertising is judged; was it popular, did it win awards for creativity, are people talking about it or sharing it with friends? These are all valid, but nothing is as important as whether or not the advertising was effective in hard business terms. Did it actually work? If not, then it is hard to justify the investment. TV works better than any other form of advertising. It generates the highest absolute volumes of sales and profit whilst also delivering the best ROI. However, you need proper econometric analysis to unpick this.

Thinkbox is able to point to five major and impartial studies into the effectiveness of advertising to make this assertion with confidence.

Supporting Evidence

 The PWC Payback Study 1 – – the most extensive of its kind ever undertaken – over 10 years of data for over 700 brands in seven different market sectors to unlock the payback of TV expenditure:

  • TV delivered the highest sales 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 benefitting 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

The PwC Payback Study 2 added more insight into what happens to people’s willingness to pay for brands in a downturn:

  • Brands have a 73% chance of losing brand value (WTP) within 12 months if they reduce their TV spend and a 67% chance of increasing brand value if they increase TV spend
  • Those making heaviest ads cuts are losing most brand value – especially those cutting TV
  • The damage from a year off TV can take five years to undo, says Data2Decisions
  • TV advertising has a far stronger correlation (82%) with brand value than any other medium (the nearest is press with 47%) – and over double the correlation of the average for all other media

Payback 3, published in 2011, was an econometric analysis of 3,000 ad campaigns across nine advertising sectors between 2006 and 2011. It compares, 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.  

  • TV advertising created the most profit (an average return of £1.70 for every £1 invested) and that its return on investment (ROI) has increased by 22% in the last five years
  • Ebiquity found that TV advertising is 2.5 times more effective at creating sales uplift per equivalent exposure than the next best performing medium

'Payback 4: pathways to profit' was published in 2014 is an econometric analysis of over 4,500 ad campaigns across 10 advertising sectors between 2008 and 2014. It was an update on Ebiquity’s Payback 3:

  • TV delivers the most profit: an average return of £1.79 for every £1 invested during 2011-14 (up from £1.70 for every £1 invested during 2008-11). This compares to £1.52 for radio, £1.48 for press, £0.91 for online display, and £0.37 for outdoor advertising. The study echoes the findings of recent econometric research by the Radio Advertising Bureau, which also found that radio gave the second best ROI after TV.
  • TV consistently demonstrated the highest return on investment (ROI) of any form of advertising over the last 7 years, a period of economic recession and major upheaval in media technology and consumption.
  • TV advertising is twice as effective at creating sales uplift per equivalent exposure than the next best performing medium (press). Press advertising delivers 52% of the sales uplift TV creates, radio 27%, online display (excluding VOD) 13%, and outdoor 11%.
  • TV advertising has a ‘halo effect’ across a brand’s portfolio. 37% of TV’s sales effect is felt by products not directly advertised in the TV campaign
  • TV’s ‘multiplier effect’ makes other forms of advertising work harder
  • TV created 33% more branded online searches per TV rating point during 2011-14 than in 2008-11

The IPA Study – ‘Marketing in the Era of Accountability’ was written by Les Binet and Peter Field and published in 20xx. It examined 27 years of IPA Effectiveness Awards data:

  • 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 creates emotion better than other media and was far more effective in driving the bottom line (sales, market share, profit and loyalty)
  • 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
  • The study also showed that TV is getting more effective over time; it has increased its lead over all other media channels in each of the last three decades. In fact, the report concludes “don’t neglect TV. Far from being dead, TV advertising remains one of the most effective and efficient media. New technology and increased competition for viewers may actually be making TV more efficient, not less”

‘Advertising Effectiveness: the long and short of it’ was a 2012 update on the IPA’s ‘Marketing in the Era of Accountability’, again by Binet and Field:

  • Long-term (3+ years) investment in advertising delivers double the profit of a short-term approach (less than 1 year), but investing in both delivers even higher returns
  • The largest part of an advertising budget should be invested in media with a mass reach and long-term effects, such as TV. At least 60% should be invested in these brand-building media with the remainder spent on shorter-term activation channels to provide a response mechanism to capitalise on the effects of the brand-building activity

Further links: Effectiveness

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2. TV has unbeatable scale and reach

EE

Television has always had the capacity to reach a massive audience. Commercial TV now offers a plethora of channels and programmes and can reach over 73% of people in one day. It is TV’s ability to deliver these numbers and in a short space of time that is a key USP for the medium.

In addition ‘Event TV’ and programmes like Britain’s Got Talent and Champions League Football are bringing in even bigger audiences, particularly for hard-to-reach viewing groups (like young men aged 16-34), as well as making famous the advertisers associated with them.

This capacity, unique to TV, can also serve to make brands seem bigger than they really are, instilling a sense of authority and stature and re-enforcing that TV is the biggest game in town.

Supporting Evidence

Commercial TV reaches:

  • You can reach 73% of people in a day on commercial TV, within a week you can reach 94% and within a month, 98% - no other medium can better (Source: BARB)
  • Britain’s Got Talent was watched by 12.9 million people on Saturday, 8 June 2013
  • The average viewer watched 47 TV ads a day
  • The UK as a whole watched 2.8 billion TV ads a day

Digital penetration in UK is now 100%. Main platforms are:

  • Freeview: 10.8 million
  • Sky: 11.2 million
  • Virgin: 3.7 million
  • Freesat: 1.8 million
  • BT Vision: 900,000

 

  

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3. We’re watching more TV than a decade ago

Virgin

Linear TV viewing on a TV set in the UK has been steadily breaking records in recent years, breaking through the 4 hours a day mark for the first time in 2010. The terrific weather we enjoyed in 2013 and the lack of major sporting events explain why viewing was slightly less than the year before (when we clocked up 4 hours, 1 minute a day), but it is still 12 minutes more than we were watching a decade ago and with a World Cup in 2014, viewing can expected a football-fuelled boost.What is clear is that linear broadcast TV is here to stay, not least because it is in human nature to want to share experiences together, to belong and not to miss out. Ofcom summed it up in its ‘Communications Market Report 2013’ when it said ‘watching live remains the core way in which we watch television. Its continued popularity demonstrates viewers’ preferences for watching TV as it is broadcast.” In addition to scheduled TV, we are now able to quantify the average amount of additional TV watched via devices such as tablets, smartphones and laptops. This amounts to an average of 3 minutes, 30 seconds a day per viewer – or, in more human terms, three 30-minute TV episodes a month.

Supporting Evidence

  • We watch an average of 3 hours, 55 minutes, 30 seconds of TV a day in the UK
  • That is 3 hours, 52 minutes a day of linear TV on TV sets (BARB, 2013) plus 3 minutes, 30 seconds a day on other devices, such as laptops, tablets and smartphones (UK broadcaster data, 2013).
  • Viewers are watching 12 minutes more TV a day than ten years ago.
  • 88.7% of linear TV in 2013 was watched live, as it was broadcast, compared to 89.9% in 2012.
  • The average person watched 2 hours, 33 minutes of commercial TV a day in 2013.
  • Commercial TV accounted for 68% of linear viewing, up from 66% in 2012.
  • Commercial TV accounted for 76% of linear viewing among the younger 16-34 audience.
  • In the last ten years, commercial TV viewing has increased by 14%.

Further links: TV at a glance 

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Robinsons

4. TV is the most talked about medium both on and offline

TV is cultural glue. People love talking about TV, off- and online, almost as much as they love watching it. The advent of multi-screening has seen TV become even more magnetic. Many of us now share a virtual sofa with the world and having a second screen to hand enables us to give live, online reaction to TV via social media; uploading pastiches to YouTube, joining TV-related Facebook groups, and airing opinions on Twitter.

Supporting Evidence

  • 86% of people in the UK (with access to TV and the internet)** have ever multi-screened (Thinkbox Screen Life, 2012).
  • 25% of people in the UK who have internet access at home multi-screen every day (IPA Touchpoints, 2012)
  • 46% have used social networks such as Facebook and Twitter while watching TV (Thinkbox Screen Life, 2012).
  • 31% of people in the UK (with access to TV and the internet)** have chatted about TV programmes or ads on a second screen; this rises to 56% for 16-24s (Thinkbox Screen Life, 2012).
  • People are more likely to stay in the room or not change the channel during the ad break if they were multi-screening. According to our Screen Life research, multi-screening viewers stayed in the room for 81% of ad breaks; viewers not multi-screening stayed in the room for 72%. (Thinkbox Screen Life, 2012).
  • 40% of primetime tweets are about TV, says Twitter
  • TV advertising creates the most additional Word of Mouth for brands, 51% in total. At least 90% of these brand conversations take place offline (Thinkbox POETIC 2013)

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5. All TV ads are response ads

Three

We all know that TV makes people do things, from voting for our favourite reality contestant to ordering something online, and the advancement of technology has made it even easier to respond to television. Driving viewers to do something (increasingly online) is now a key objective for many advertisers.

Thinkbox commissioned MediaCom to examine this further and study the link between TV spots and web activity conducted within a 10 minute timeframe of the TV ad broadcast. What they found is that all TV ads will create an online response, even if response is not the primary objective, and because they can now be instantly searched for, shared, copied and appraised at the click of a mouse, this is adding a whole new dimension to response advertising.

Supporting Evidence

  • All TV activity will illicit an online response. For example, 94% had gone online as a result of seeing something on TV in the last year (Source: Online Journeys with The Best Organisation)
  • 25% with internet access at home concurrently watch TV & browse the net every day (Source: IPA Touchpoints 4)
  • Those who view concurrently spend around 31 minutes per day doing so (Source: IPA Touchpoints 4)
  • As a result of seeing a TV ad, 57% agree they have conducted an online search, 36% agree they have visited a brand’s website to find out more, 28% have searched the net to find out where to buy the brand and 21% have purchased online - Source: TV+Online: better together (a joint study with the IAB commissioned from Q Research)
  • TV ads trigger online activity. Approx 60% of all immediate response to TV ads is via an online route. This has increased from c15% 10 years ago - Source: The new rules of TV response  (commissioned from MediaCom)
  • Even pure brand ads with no call to action generate an immediate web response. - Source: The new rules of TV response (commissioned from MediaCom)

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6. TV is the new point of sale medium

Kronbourg

Thinkbox’s TV + Online study, with the IAB (TV & Online: Better together), demonstrated that, for the most digitally enabled people, TV is often concurrently consumed with the laptop open and online. People are increasingly ready and able to use it to find out more or communicate about the content they are watching on TV, both programming or advertising content. There are many examples of TV leading directly to online search, comparison and purchase and strong evidence that, without TV, online activity would be less effective.  The journey from TV to purchase is now much shorter – even immediate – thanks to the internet.

Supporting Evidence

  • Amongst the TV + Online sample concurrent consumption of TV and online is fast becoming a regular event
  • We saw in the study anecdotally how that can lead to people following up what they see on TV with immediate online action, via search, website visits, purchase.  A brand can go from initial awareness to sale all within the same commercial break
  • People who were registered on retail websites could immediately place items they had seen in a TV ad on their shopping list
  • In total, 75% of the sample could recall acting on at least one TV commercial, compared to 52% who could recall acting on an online ad They are generally more positive about TV advertising across all its roles, but particularly at the start of the consumer journey
  • Consequently, more of them say they have been persuaded to purchase online by a TV ad than by online advertising 52% of people claim to have shopped online while watching live TV (Thinkbox Tellyporting research, 2010)

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7. TV is the dominant youth medium

IKEA

TV is the dominant youth medium. It remains the medium younger people spend the most time with. Plus, young people also watch more additional TV online than most. Young people have always been lighter TV viewers…but they grow into adults and we should always be careful not to confuse life-stage behaviour with long-term trends.

Supporting Evidence

  • 15-24s spend 43% of their media day with linear TV (IPA Touchpoints, 2012)
  • Young people particularly like commercial TV: it accounts for 76% of 16-34s’ viewing (BARB H1 2013)
  • According to BARB’s figures for H1 2013, commercial TV reaches:
    • 62% of the 16-34 population every day
    • 89% every week
    • 97% every month
  • 55% of 15-24s talk about TV ads offline (face to face, on the phone etc.) (Thinkbox ‘TV Nation’, 2013)
  • 27% of 15-24s talk about TV ads online (Facebook, Twitter etc.) (Thinkbox ‘TV Nation’, 2013)
  • 45% of 5-16 year olds say that they talk about their favourite TV programmes with friends and family (Childwise Monitor Report, 2011-2012)
  • 34% of 5-16 year olds say they go on the website or Facebook page of their favourite TV programmes (Childwise Monitor Report, 2011-2012)
  • 10% of 5-16s watch TV on laptops or computers in their room (Childwise Monitor Report, 2011-2012)

 

Further links:  The Secret Life of Students and TV and young people        

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8. TV is THE emotional medium and emotional campaigns are more effective

John Lewis

In advertising, we have always known anecdotally that strong creativity means more success, but there was little proof of the link. We now have the beginnings of a databank of proof, not least a study called ‘The link between creativity & effectiveness’, by the IPA, in association with Thinkbox. This analysis, by the distinguished marketing consultant Peter Field, looked at 435 campaigns over a sixteen year period (1994-2010). It fused the Gunn Report database of creatively-awarded ad campaigns with the IPA Effectiveness Databank, home to ad campaigns which have proven their effectiveness, to examine any link between the two.

It is TV’s ability to create deep, long-held emotional brand associations that is one of its most unique benefits.

Supporting Evidence

 ‘The link between creativity & effectiveness’ (2010), by the IPA in association with Thinkbox, found that:

  • Creative campaigns are 10 times more efficient at delivering business success
  • The more creatively awarded a campaign, the more effective it becomes
  • Creatively awarded campaigns are much more likely to be ‘emotional’ than ‘rational’ (44% vs. 19%)
  • Investing in creativity is a powerful way to achieve fame (i.e. buzz)
  • Creatively awarded campaigns that invest strongly in Excess Share of Voice (ESOV) perform particularly well, suggesting that many creative campaigns could further improve ROMI by investing more in Share of Voice (SOV)
  • Despite generally being disadvantaged by lower levels of ESOV, creatively awarded campaigns still generate more and greater business effects than non-awarded ones
  • With the same level of ESOV, creatively awarded campaigns would have driven twice as much market share growth as non-awarded ones
  • 35% of consumers ranked Gunn awarded campaigns as ‘highly liked’ versus just 20% for non-Gunn awarded campaigns
  • InMarketing in the Era of Accountability’, the IPA proved that emotional ads were 94% more effective than rational or informative ads

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9. TV is the catalyst for other media

John Lewis

TV advertising doesn’t just work for what’s being advertised, it also creates a ‘halo effect’ across a brand’s portfolio. So, for instance, if a beauty brand advertises a shampoo product on TV, the campaign is likely to boost sales of its other products, such as body spray or moisturiser; if a bank advertises a mortgage product, its home insurance and current accounts will benefit. And TV also makes other elements of advertising campaigns work harder; it is other media’s steroid. These facets of TV are often missed and so are another cause of the misattribution of TV’s powerful effect. Luckily, econometric studies can unpick them…

Supporting evidence

  • 38% of TV’s total sales effect is felt by products not directly advertised (Payback 3)
  • TV’s effects are felt by all accompanying media, but are most starkly seen in combination with radio advertising, where radio’s effectiveness is increased by up to 100%, and with branded search, which a typical TV campaign increases by up to 35% (Payback 3)
  • The Direct Marketing Association (DMA) found that when TV is added to other response-gathering media it improves their performance dramatically:
    • Print response rises by 92%
    • Direct Mail by 96%
    • Online responses increased by 164%

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10. TV builds brand fame

John Lewis

Quite simply TV is the best medium for making and keeping brands famous. From Hovis to Yeo Valley to PG Tips, we recognise the truth of this intuitively, and nearly all of the most famous brands have famous TV campaigns.

Investing in creativity is a powerful way to achieve fame (i.e. buzz and talkability). Brands can buy awareness but not fame; and fame is proven to be at the heart of the most effective advertising.

Furthermore and through the most thorough and impartial examination of the last 27 years and 880 Advertising Effectiveness Awards (the best of the best), the IPA has proved that no matter what size your budget, TV makes campaigns more effective and it also outperforms all other media channels.

Supporting evidence

  • Campaigns which used TV were on average 25% more effective than ones which did not (source: ‘Marketing in the Era of Accountability’, IPA)
  • Emotion and fame (at which TV excels) were the most effective creative strategies (source: ‘Marketing in the Era of Accountability’, IPA)
  • The link between creativity and effectiveness research 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. It reveals a direct correlation between strong advertising creativity and business success and that high levels of creativity make advertising campaigns at least 11 times more efficient

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The proof of TV’s power

There are all sorts of reasons why television advertising is so brilliant at creating success for brands and businesses both in the short-term and the long-term.

Harvey is on Facebook

Associated content,

  • Some frequently asked questions about getting started on television.
  • Sign up for our bi-monthly newsletters we’ll send you all the latest from the world of TV advertising, including news of our latest research studies and forthcoming events. You’ll also be able to download lots of useful stuff from our website with your login. It’s quick and easy to do, and you can do that here.
  • Here you will find concrete proof of how TV can work for you and how it pays back, whatever the time scale or budget.
  • Our latest ad dramatises the powerful effect that TV can have. We thought you might like some "at a glance" examples of brands that have recently used TV and experienced business-transforming effects, against all sorts of objectives from launching or building a brand to increasing web-traffic, footfall and sales: we hope there is something here to inspire.