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TV is ecommerce’s shop window

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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).

In-the-busy-online-world-reaching-new-customers-is-vitalOnline-brands-require-more-brand-advertising-to-drive-growth
Online-brands-require-more-brand-advertising-to-drive-growth


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