Thinkboxis month’s Chart of the Month draws on findings from our most recent study, ‘Profit Ability 2: the new business case for advertising’, which shows that TV (Linear and BVOD) accounts for 54.7% of advertising-driven profit (within 0-24 months) but only accounts for 43.6% of total advertising investment.
The study brings together the vast econometric databases of client data from Ebiquity, EssenceMediacom, Gain Theory, Mindshare and Wavemaker UK, covering £1.8 billion of media investment in the UK across 10 media, 141 brands, and 14 product sectors. It is an update of Ebiquity and Gain Theory’s Profit Ability study from 2017 and offers the first post-Covid/Brexit view of advertising’s business performance.
Profit Ability 2 analysed the profit generated by advertising at different stages as its effects build over time. It examined four speeds of payback: immediate payback (within one week), short-term payback (up to 13 weeks), sustained payback (week 14 through to 24 months) and full payback (total payback over a 24-month period).
It found that, on average, a pound invested in advertising returns £4.11 in profit (when sustained effects are included). Crucially, all the sectors analysed in the study generated a positive payback from advertising when sustained effects are accounted for.
This chart shows how TV accounts for 54.7% of advertising’s full payback but only accounts for 43.6% of total advertising investment. Within this, Linear TV accounts for 46.6% of full payback and BVOD accounts for 8.2%.
For more advertising effectiveness insight, watch ‘The new business case for advertising’ on demand.
For all Chart of the Month’s from the recent months, download the slides from the link above, this includes:
- April: The TV screen drives the highest ad recall of all devices
- January: TV is a trusted medium
- December: Auditory attention more resilient to distraction than visual attention
- October/November: Auditory attention more resilient to distraction than visual attention
- September: Creativity is the biggest advertising profitability multiplier within our control
- August: Sustaining ESOV essential for brands in 2023
- July: 30 second ads deliver the greatest impact
- June: Late evenings and weekends are valuable dayparts when targeting ‘Reach Extenders’
- May: Electric/hybrid vehicles are motoring ahead in TV advertising
- April: B2B TV advertising spend has doubled since 2018
