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Why this handbook can help you
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 advertising, as you’ll read below, works better than anything else. 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. It’s not as simple to account for TV’s effect as it is to count online clicks or telephone calls; don’t confuse something’s immediate countability with effectiveness.
Developing hard hitting evidence to help people understand how TV works – and how to make it work even better – is central to Thinkbox’s mission. But not everyone will be as familiar with the evidence as we are and it is crucial that every business decision maker knows the facts about advertising effectiveness. You need the proof, the numbers in your hands.
To help, we have distilled here the key findings from the major recent studies of advertising effectiveness from the likes of PricewaterhouseCoopers (PwC), Ebiquity, and the Institute of Practitioners in Advertising (IPA). By bringing this authoritative and impartial body of work together we intend this to be a brief yet far-reaching guide to what we know about advertising effectiveness and, in particular, TV advertising’s place at its core.
Here you will find concrete proof of how TV can work for you and how it pays back, whatever the time scale or budget. Within each section you’ll find links through to the original research studies in long form, should you wish for more detail.
And if you’d like some handy nickable PowerPoint slides with notes that suppor the text below, you can view and download those here.
We hope this will help you make a watertight case for investment in TV.
“TV’s unrivalled 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.”
Effectiveness Practice Leader,
- Creativity means effectiveness (and creativity generally means TV)
- TV creates more profit
- Emotion: the softer side of hard numbers
- TV’s halo effect
- TV’s immediate and long-term effectiveness
- The risk of cutting TV
Creativity means effectiveness (and creativity generally means TV)
It is tricky to take something intangible and subjective like creativity or emotion and show its tangible results. In advertising, we have always known anecdotally that strong creativity leads to success, but there was little proof of the link.
In 2010, this changed. The IPA, in association with Thinkbox, published ‘The link between creativity & effectiveness’ (updated in 2011), an analysis by the distinguished marketing consultant Peter Field of 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 was discovered that creatively-awarded campaigns are some 12 times more efficient at increasing a brand’s market share. It also found that the vast majority of Gunn Report creative award scores (77%) are for TV commercials, showing that TV creativity is at the heart of the success of these campaigns.
And the more creatively awarded a campaign, the more effective it becomes. The study showed that campaigns picking up five or more major creative awards were around three times as efficient as campaigns picking up one to four.
“Creativity helps drive long-term business success, providing a powerful antidote to the short-term nature of so much activity today.”
Marketing and IPA Databank Consultant
TV creates more profit
Most of us intuitively know that the biggest, most famous and most successful brands are TV advertisers. But, there is also plenty of hard evidence proving this is not a coincidence. There are several impartial research studies which prove that TV advertising is at the heart of the most effective advertising campaigns.
Payback 3, a recent study by Ebiquity, econometrically analysed the 3,000 ad campaigns in their database 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 display(excluding VOD) and outdoor.
TV advertising creates the most extra profit; an average return of £1.70 profit for every £1 invested.
Ebiquity found that TV advertising creates the most extra profit; an average return of £1.70 profit for every £1 invested. It also found that TV’s profit ROI has
increased by 22% in the last five years and that TV is 2.5 times more effective at creating sales uplift per equivalent exposure than the next best performing medium (which was press advertising). This is largely explained by the reduced price of TV which is itself a consequence of record commercial TV viewing. TV advertising delivered 71% of the sales in their database from only 55% of the media spend.
TV’s profit ROI has increased by 22% in the last five years.
This echoed previous effectiveness studies, including one by the IPA, the body representing all types of ad agency in the UK. The IPA’s ‘Marketing in the Era of Accountability’ is a thorough and impartial examination of the last 27 years of IPA Advertising Effectiveness Awards case studies. It proved that campaigns which include TV are 35% more effective than those without TV at delivering large business effects, and that TV is more effective now than it was 20 years ago.
Furthermore, PricewaterhouseCoopers undertook a 10 year econometric analysis of over 700 brands in 7 markets and found that, on average, a £1m TV investment yields a £4.5m increase in sales, the highest sales ROI of any medium.
Furthermore, Research in 2012 by the IPA found that TV advertising remains the most effective way to build a brand and creates larger business effects than other forms of advertising. It is also becoming more effective due to growing synergies with online and increased competition reducing the cost of reaching mass audiences with TV. Peter Field and Les Binet also concluded that including TV advertising in a campaign increases the campaign’s efficiency six fold. Here you can find more information on the ‘Long and Short of It’ study.
Emotion: the softer side of hard numbers
Humans are emotional beings. We sometimes like to think we are rational; but we’re more post-rationalising than rational. The exact figure is debated by neuroscientists but it is estimated that at least 90% of our decisions are based on our emotions.
The role of emotion in advertising has risen to greater prominence in recent years as we gain more understanding of how advertising works. What is clear from the major research is that emotion is at the heart of advertising effectiveness.
TV (or film) is the pre-eminent emotional medium; this has been proved in many ways but through neuroscience we can now actually witness the firing of the amygdala, the brain’s centre of emotion, when exposed to TV. In its ‘Marketing in the Era of Accountability’, the IPA proved that emotional ads were almost doubly
TV = emotion = creativity = business success
as effective in generating profit than rational or informative ads. And while proving the importance of creativity in advertising, the IPA/Gunn research showed that creatively awarded campaigns are far more likely to be emotional than rational (47% of creatively awarded campaigns were deemed ‘emotional’ whereas only 35% of non-awarded campaigns were ‘emotional’).
It is TV’s ability to create this emotional connection between brand and viewer that can free up other media to do what they do best, be it creating a more personal dialogue or offering a greater depth of information. The ability of TV to form deep, long-held emotional brand associations is one of its unique benefits.
Seminal research by Dr Robert Heath, from the University of Bath’s School of Management, found that ads with high levels of emotional content enhance how people feel about brands, even when there was no real message. However, ads which are low on emotional content have no effect on how favourable people are towards brands, even if the ad is high in news and information: in advertising, it appears to be the case that it’s not what you say, but the way that you say it, that gets results. Nothing speaks for a brand more effectively than TV.
TV’s halo effect
38% of TV’s total sales effect is felt by products not directly advertised. This fact, revealed by Ebiquity’s Payback 3 study, identified TV advertising’s ability to create a halo effect across a brand’s portfolio. So, 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.
TV also consistently makes other elements of advertising campaigns work harder. Ebiquity found that 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
In effectiveness terms, TV is other media’s steroid.
increases by up to 35%. In effectiveness terms, TV is other media’s steroid.
Ebiquity’s findings about TV’s halo effect underline previous studies, including one by the UK’s Direct Marketing Association (DMA), which 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% and, most impressive of all, online responses increased by 164%. Google supports this finding and says that TV advertising’s effect on search is instant and very visible.
This halo effect is often missed, yet another cause of the misattribution of TV’s powerful effect.
TV’s immediate and long-term effectiveness
A Thinkbox study with MediaCom, looking at the influence of TV on short-term response, found that 43% of all short-term campaign-driven responses across a broad group of their clients were generated by TV, way ahead of the investment share on TV. Furthermore, they found that the web is now the main response channel for TV ads; this fact is also responsible for a great deal of misattribution of TV’s effect on other media.
TV works and it works fast. This immediacy has always been the case but, thanks to the variety of online media, acting on TV ads is easy
TV works immediately but it also works over the long-term, delivering a double benefit.
ier than ever; we can now see TV’s immediate effect in real time as it unfolds online. Effectively, the take-up of home broadband and increasing laptop owne rship has brought the High Street into the living room and made TV a point of sale medium. Thinkbox’s Tellyporting research found that 53% of TV viewers say they have responded online to a TV ad.
But immediate success is only one part of TV’s power. The PricewaterhouseCoopers study also found that TV advertising delivers its value over a much longer time frame than other media. They found that TV campaigns were still working at about 80% of their initial level in the year following their broadcast. This effect is often overlooked, and is one of the reasons why TV’s payback is often underestimated. TV works immediately – but it also works over the long-term, delivering a double benefit.
In Les Binet and Peter Field’s 2012 study: ‘Advertising effectiveness: the long and short of it’ they found that advertisers need to ensure their campaigns strike the right balance between long-term investment in brand-building using mass media, and short-term, direct methods that stimulate sales. It also emerged that 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. Furthermore, the largest part of an advertising budget should be invested in media with a mass reach and long-term effects. At least 60% should be invested in these brand-building media. You can read more on this insightful research right here
The risk of cutting TV
As we start another year of economic difficulty, with pressure to cut advertising budgets and resort to price-cutting it is important to analyse and understand what the effects of not advertising are.
PricewaterhouseCoopers analysis ‘Upside to Downturn’ found that the risk of cutting TV advertising in a recession is grave indeed. It found that brands have a 3:1 chance of losing brand value within 12 months if they reduce their TV spend and a 2:1 chance of increasing brand value if they increase TV spend. Furthermore, it found that those brands making the heaviest ad cuts are losing most brand value – especially those cutting TV.
This stark set of findings was supported by a Data2Decisions study which concluded that the revenue loss from taking one yea
It makes the best long-term financial sense to begin, maintain or increase investment in TV advertising.
r off TV has long term repercussions, depending on the sector, it can take up to five years to recover.
Even if price-cutting and promotions are being contemplated then Ebiquity’s study proved that integrating these with a TV campaign will make them up to 20% more effective. All the evidence shows that it makes the best long-term financial sense to begin, maintain or increase investment in TV advertising. The IPA has proved that those advertisers who do increase their share of voice during a recession will be gaining market share very cost-effectively and will emerge from any recession in a much stronger competitive position.
Advertising must be judged on its effectiveness. In this section we’ve brought together the evidence that proves and explains TV advertising’s unrivalled ability to create business success. We hope that it makes a compelling argument and that you will invest in that evidence. Its ability to create more profit and more sales, to work both immediately and over the long-term, to create an emotional bond between viewer and brand, its place at the heart of advertising creativity, and the major influence it has in making other media more effective makes TV advertising indispensable to any business that wants to create and maintain long-term success. It is the best investment a brand can make.
A set of slides supporting above text can be viewed and downloaded in handy nickable PowerPoint form (with notes) right here.
You can get your own pdf copy of the “Why TV is a brand’s best investment” booklet here.
Please download and use this material freely to help make a watertight case for investment in TV.
Why TV is a brand's best investment
Download the booklet here:
About the Marketing Society
The Marketing Society is a not-forprofit organisation owned by its members. Founded over 50 years ago to provide a forum for senior marketers to exchange ideas and share best practice, today the Society is the UK’s leading network for senior marketers.
The Society challenges its members to be bolder marketing leaders by supporting the development of leading–edge thinking, and promoting the evidence of effective marketing. www.marketing-society.org.uk
On the 5th December 2012, Les Binet, Head of Effectiveness from adam&eveDDB, and Peter Field, Marketing Consultant, gave the keynote presentation and unveiled the eagerly awaited update of their seminal 2007 effectiveness study, 'Marketing in the Era of Accountability'. We also heard from top marketers and media experts involved in brand and response marketing, including: Craig Inglis, Marketing Director, John Lewis; Mike Colling, Managing Director, Mike Colling & Company; and Marie Oldham, Chief Strategy Officer, MPG Media Contacts. If you weren’t able to come along or access our live webcast, you can catch up with all the action by watching the event right here
The 30 second TV spot remains the cornerstone of TV advertising (we watched a record watched an average of 2.8 billion ads a day at normal speed in 2013) and there is no sign we are about to stop watching, talking about, and sharing them with others. Importantly, the mighty spot is at the heart of most IPA effectiveness award winning campaigns. However, there are so many different ways to use the spot together with a host of other commercial innovations on TV that work alongside them. These are offering advertisers new ways to create inventive and original campaigns. Here are a few of the ways advertisers and agencies have been innovating on TV.
Thinkbox is dedicated to proving advertising effectiveness, and part of our mission is to seek out and commission inspiring and effective ad campaigns for our ever-growing library of case studies. Here you can browse our most recent additions; use the drop down filters to explore our various case study categories, or use the case study search or A-Z to find something in particular. You can also have a look at some of our bite-size documentaries, which are a rare chance to hear from some of the advertisers and agencies responsible for these inspiring and effective campaigns. So please dive in and explore what TV can do for you
We want everybody, from agencies to advertisers to use us for help and advice and facts. So, we've put together a collection of fact-packed and thought-provoking presentations that explore the effectiveness of TV and the different ways that advertisers can maximise its many benefits. Each presentation is based around a theme and provides an overview of the subject as well as some key insights from major research projects.. If you'd like to find out more, or book a presentation for you and your colleagues, there's a full list of potential subjects here and all the contact details you need.
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