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TV’s effectiveness: a summary
TV is at the heart of advertising effectiveness
You’ve probably read that commercial TV’s effectiveness (sales uplift per exposure) has remained undiminished – even through the last recession - while the cost of advertising on TV has been falling in both absolute and relative (inflation-adjusted) terms. Many brands are taking this opportunity to increase their TV spend, to return to TV advertising or to try it for the first time, and all the evidence suggests that they will emerge with an enhanced market share.
But 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. Below are links to the full major and impartial studies that will give you the hard evidence. Or you can continue reading a summary of them all by clicking here.
Proof of TV's effectiveness
Much has changed in the world of advertising over the last few years, but the importance of proving the effectiveness of advertising investment remains paramount. On Thursday 15 May, 2014 we unveiled Payback 4, an independent study commissioned from Ebiquity by Thinkbox that compares, on a like-for-like basis, the sales and profit impact during the last eight years of five different forms of advertising: TV, radio, press, online display and outdoor.
Every year there is a mountain of media and marketing research; too much to read it all and, sadly, too much which doesn’t bear scrutiny. But if there was ever a piece of research the industry could trust and that demanded attention, it was published in 2012 by the IPA.
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. Amongst the findings, the research showed that TV advertising is 2.5 times more effective at creating sales uplift per equivalent exposure than the next best performing medium. Payback 3 joined a growing body of work proving the effectiveness of TV and you can read all about it here.
Thinkbox and the Marketing Society have collaborated on this guide to explain why TV advertising can make a powerful difference to your business. It features key findings from the major recent studies of advertising effectiveness to create a compact guide on how advertising works and, in particular, TV’s place at the heart of the most successful campaigns. Here you will find concrete proof of how TV can work for you and how it pays back, whatever the time scale or budget. Find out more right here...
One of the biggest challenges in the current advertising climate is demonstrating the effectiveness of advertising investment. Nowhere is this more prevalent than with TV advertising, which often works by building brand associations over the long term which traditional econometric methods can fail to pick up. PricewaterhouseCoopers combined innovative long-term econometric analysis across a wide range of markets and conjoint analysis to unlock how TV expend pays back. In August 2008, once the downturn had hit we commissioned PricewaterhouseCoopers to repeat and extend the innovative payback analysis. The study looked at shifts in brand values in relation to changes in advertising investment across the seven market categories analysed in 2007, plus three new market categories and showed TV’s fundamental role in building and maintaining brand equity- especially in times of recession.
Through thorough and impartial examination of the last 27 years of Advertising Effectiveness Awards case studies, the IPA has proof that using TV makes campaigns more effective. No matter what size your budget, TV outperforms other media channels. We've collected a few headlines for you here and also filmed Les Binet and Peter Field presenting their findings.
In August 2008, we commissioned PricewaterhouseCoopers to repeat and extend the innovative payback analysis from 2007. This study look at shifts in brand values in relation to changes in advertising investment across the seven market categories analysed in 2007, plus three new market categories. In addition, we also appointed Data2Decisions bring together two large datasets focusing on brand health and media spend. The objective was to unpick the relationship between media spend and brand health across a much larger range of categories and products. Data2Decisions also examined the impact of investing in brands during a recession.
This research, 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. Updated in 2011, the analysis now covers 435 campaigns over a sixteen year period between 1994 and 2010. It revealed a direct correlation between strong advertising creativity and business success, and that high levels of creativity make advertising campaigns some 12 times more efficient at increasing a brand’s market share. Here you can find out about the project’s background, read the management summary and download the IPA’s full report.
Why TV is so effective
Audio-visual moving images consumed in a relaxed and often shared context make TV immensely powerful. 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; i.e. that it rocks!
Imagine a world without television... No opportunity to snuggle up in front of your favourite programme; nothing to chat about over the water cooler; the press devoid of celebrity gossip...
Thinkbox sought to identify what realty goes on inside the 'black box' of television viewing. How do people engage with TV advertising? What tunes them in, turns them on and ultimately, how does engagement impact upon brand takeouts? This groundbreaking study encompassed real people watching real TV in their own homes and provides fascinating insight into how TV advertising actually works.
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VW and its ad agency DDB have worked together for over 40 years. It's a unique relationship, not just for its longevity but also for its consistency. Whether it's Paula Hamilton throwing her jewels down the drain; a Jack Russell singing "I'm a man", or Gene Kelly doing a bit of break dancing in the rain, we've all got our favourites. So here's a "Just VW" gallery for you, to pique the memory and cast a spotlight on just a few compelling and effective TV ads from an extraordinary canon of work. Congratulations to both VW and DDB and thanks for all the great telly.