The ‘5 things’ blog format is well trodden and reliable. It tempts you by a) claiming to be brief and b) giving you nothing but the fact that you don’t know what the five things are. It also c) plants the seed that you really ought to add these five things to your mind.
GroupM recently completed for us looking at how advertising creates a response. This is the Himalayas of advertising research and equally tricky to navigate. I could have gone for ‘500 things you should know’, but that may not have drawn you in. The chart on the left gives an idea of how much detail the research went into.
We launched the research recently at a standing room only event. Our response research had a great response. You can watch the event in all its glory on-demand here. But here are the five things I promised you to chew over if you don’t have the time to spare.
TV has hidden effects
Some responses to TV advertising are more obvious and direct than others: people calling phone numbers or visiting websites featured in ads or visiting high street stores. But TV also creates indirect responses through online channels and these are harder to unpick.
TV creates the most short to medium term sales
In total, media account for on average 39% of sales in the short to medium term (within 3 months of a campaign finishing). Of these media-driven sales, 33% are driven by TV advertising, more than any other communication channel.
TV advertising drives the highest volume of cost efficient response
Any blog using the terms ‘cost efficiency’ and ‘point of diminishing returns’ isn’t going to light everybody’s fire (unless you’re like me), but this is probably one of the most crucial insights into the importance of TV in its ability to drive profit for advertisers.
Because of its enormous reach and scale, TV advertising keeps generating a cost efficient level of response at higher levels of spend than other media. Over the short to medium term, the point of diminishing returns – the point at which cost per acquisition / cost per sale starts to become inefficient – occurs at much higher levels of spend for TV compared with other media channels. This means there is more headroom to spend efficiently on TV than any other channel, which enables brands to drive a high volume of response and profit. In fact, spend on TV advertising can be 2.7 times higher than online channels before there is a significant decrease in efficiency, 2.5 times higher than print and 2.8 times higher than radio.
TV is 40% more efficient at driving long term response
Half of all media-driven response comes in the long term (3-24 months post-campaign) and Brand TV advertising is the most efficient driver of long term response, responsible for half (52%) the impact media has in the long-term. On average, TV is 40% more efficient at driving long term response per pound than the next best forms of communication.
Direct Response TV should be planned to maximise coverage above frequency
This was a surprise. Modelling the level of response delivered per exposure for 6 direct response-focussed advertisers, GroupM found that approximately 80% of total response was generated after a viewer had seen an ad for the first or second time.
The implications of this are that DR campaigns should maximise reach and minimise the number of times the same person is exposed to an ad more than twice. This flies in the face of how the majority of DR TV airtime is conventionally bought, which has been mostly daytime-only campaigns that tend to perform better for frequency than reach. Time for a re-think.