TV is vital for long term profit

TV is vital for long-term success

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TV advertising has many short-term effects, such as driving sales, creating spikes in online search and creating word of mouth on and offline. It works and it works fast. However, immediate success is only one part of TV’s power. The effects of TV advertising accumulate over time; the longer you advertise, the bigger the effect. It is vital for long-term success.

Ebiquity and Gain Theory’s ‘Profit Ability: the business case for advertising’ (2017) found that:

  • 58% of advertising’s profit return is overlooked when ignoring the long term
  • Businesses optimising their advertising investment based solely on more easily visible short-term returns are hugely undervaluing the total profitability driven by advertising and not maximising the growth and value of the company
  • TV is the ‘safest’ advertising medium. It is most likely to create advertising-generated profit, both in the short and long term. In the short term, 70% of TV advertising campaigns deliver a profitable return. During the 3 years after ad campaigns finish, this increases to 86% of TV advertising campaigns delivering a profitable return.
  • In the short term, TV is responsible for 62% of all advertising-generated profit at an ROI of £1.73 for every pound spent, the highest of any media. In the longer term, TV advertising creates 71% of total advertising-generated profit at an ROI over 3 years of £4.20 for every pound spent, also the highest of any media.

Previous advertising effectiveness studies also offer proof of TV’s long-term value:

  • Long-term (3+ years) investment in advertising delivers double the profit of a short-term approach (less than 1 year) – although investing in both delivers even higher returns (IPA, ‘Advertising Effectiveness: the long and short of it’, 2013)
  • In campaigns lasting 3+ years, TV advertising creates an average uplift in profit of nearly 140% (IPA, ‘Advertising Effectiveness: the long and short of it’, 2013)
  • The largest part of an advertising budget should be invested in media with mass reach and long-term effects. At least 60% should be invested in these brand-building media (IPA, ‘Advertising Effectiveness: the long and short of it’, 2013)

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