TV supercharges ecommerce brands’ growth. It gives them much-needed tele-physical availability, trust and credibility. There were 1,243 new brands on TV in 2020 (or returning after a break of 5+ years), and many of them were ecommerce brands.
Later in 2021, we’ll be releasing a major study which will explore TV and ecommerce’s incredible relationship. But for the time being, here are some of the reasons why they make such a great team:
In the crowded online world, reaching new customers is vital
- This was a key finding from the IPA study ‘Effectiveness in Context’, authored by Les Binet & Peter Field
- Compared to offline brands, growth for online brands is more dependent on broad targeting
- Online brands who deploy an acquisition strategy to attract new customers alongside a customer loyalty strategy reaped the benefits by driving significantly higher market share growth
- The Ehrenberg-Bass Institute for Marketing Science has long stressed the importance of advertising to the whole market, not just the heaviest buyers: 36% of UK adults shop online less than once a week, that’s 19m potential customers who won’t know about your brand if you don’t make sure you’re advertising to them.
Brand advertising is crucial to online advertisers
- ‘Effectiveness in Context’ also found that the nature of consideration in online categories is more likely to be rational than emotional (whereas the reverse is true in offline categories)
- So brand building and long-term effectiveness are likely to be more difficult to achieve for online brands
- This has implications for balancing budget between brand and activation for online brands: the optimum balance of brand building to sales activation for online brands is rather higher than for offline brands.
‘Digital native’ brands are increasingly using TV
- This is because they recognise the power of TV’s scale and ability to drive sales and brand effects.
- Ad spend data from Nielsen shows how top ‘digital native’ brands have collectively increased TV advertising, more than doubling investment in just five years to over £500 million
- ‘Digital native brands’ are those which began life online and continue to trade and operate primarily, or entirely, online.
TV drives ecommerce businesses
- The Demand Generator media optimisation tool, developed by WPP for Thinkbox, proves just how powerful TV is for online retailer brand growth.
- For a mid-sized online retailer brand with an annual media budget of £10 million, including TV on the media plan drives a shorter-term campaign uplift of +28%, compared with the same budget excluding TV.
- When it comes to driving a more sustained effect, that same year’s spend drives bases sales growth over the following two years of +56%.
- The total effect of including TV on the media plan in this scenario is an additional £19m revenue across three years (+39% higher than excluding TV).