7 things would-be TV advertisers should know

In December last year, the FTSE 100 welcomed a new name to its ranks when Just Eat increased its valuation to £5.3 billion, putting it in the same bracket as other major UK businesses such as Sainsbury’s and Direct Line group.  This is a meteoric rise having only floated publicly in 2014.

What’s the secret behind their success?  Well a rather smart business niche for a start (who wants to pick up the phone and actually speak to another human when ordering takeaway food?), a growing takeaway economy, a seamless online interface and, yes, you’ve guessed it, a barnstorming TV strategy.

They’re not the only new business that has been turbocharged by TV advertising, Purple Bricks (now valued at over £1 billion) and Gtech (still privately owned and turning over £90 million a year) have built their businesses on the back of TV advertising. All grew with a test and learn strategy; they dipped their toes into regional TV advertising at first, found it worked, went in up to their knees, found it was still delivering amazing results, so took the plunge and became national TV advertisers.

In 2017, there were 700+ new or returning brands on TV (returning after a gap of 5+years away). They were enticed not only by the fact that TV makes brands into household names, but by the fact that there are now so many ways to use it.

By sheer coincidence, we are holding an event at Channel 4 next week called “Scale Ability”, which is all about how brands can get on TV (and become much bigger brands). To mark the event, here are 7 things any would-be TV advertiser should know…

60% of TV advertisers spend less than £250k

TV can be perceived as the exclusive domain of big brands with big budgets. This is a myth, fuelled by the fact that just being on TV makes brands appear big. But when you look at the make-up of TV advertisers across 2017 in terms of spend, the majority fall within the <£250k bracket.

The average TV ‘view’ costs half a penny

Just as it is perceived as being for big brands, TV can also be perceived as pricey. With hard evidence that TV delivers the most profit with the best efficiency and for the least risk, it is better to think of TV as incredible value.

£100k will reach 12 million people

Looking at an average campaign bought across all stations and all dayparts, a £100k TV investment will reach 12m people on average 1.7 times each. There is a multitude of ways in which budgets can be planned to optimise either reach or frequency, but, as a guide, this gives you a rough idea of what’s possible.

Don’t feel limited by budget

One of TV advertising’s strengths is that advertisers can continue to spend more and get back more for longer – the point of diminishing returns for TV is far higher than for other media. However, brands starting out on TV are unlikely to have large budgets and need to be smart about how they use the medium, for example:

  • Think about concentrating your efforts in one region, at a specific time of day or by targeting a tight audience
  • Make your money go further by reducing the time length, utilising cheaper day-parts or advertising when you get more for your money, e.g. January
  • Look at non-spot options. Sometimes, TV sponsorship can be a lot cheaper than the equivalent exposure in spot advertising. Also, to the viewers of the sponsored programme, the activity will feel big

Talk to the broadcasters

The broadcasters have specialised teams who work with new to TV advertisers and can help you get the best out of your budget. They might also be able to help make the ad for you. They have the expertise to do this as they make promotional trailers and channel idents all the time. In addition, it’s worth exploring other business models such as shared risk options.

Get addressable

TV advertising is increasingly addressable, and this means that the more specific and granular targeting previously only associated with online advertising is now available for TV too.

For example, Sky Ad Smart enables advertisers to target households specifically based on factors such as age, location and life stage from a combination of Sky’s own customer data as well as info from consumer profile experts like Experian. This means that smaller advertisers can cut their cloth however they want and only reach (and pay for) highly specific households.

TV is the lowest risk form of advertising

If all the above doesn’t convince you to try TV, there is one other thing to know: TV is the safest form of advertising investment. That was the conclusion of Ebiquity and Gain Theory in their ‘Profit Ability’ study, which risk-assessed all forms of advertising. 70% of TV campaigns delivered profitable return in the short-term (3-6 months), more than any other medium, and there is an even stronger case for TV once the longer-term is built in. Looking at total profit success during the 3 years after ad campaigns finished, 86% of TV advertising campaigns delivered a profitable return, compared with Print (78%), Radio (75%), Online Video (67%), Out of Home (48%), and Online Display (40%).

So, if you are an advertiser who hasn’t yet tried TV, it has never been easier or more flexible. And you can have confidence your investment will deliver. FTSE 100 anyone?



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