New research reveals the real value of TV
- 11 March, 2021 06:00
Marketers have long understood the power of television advertising as a tool for brand building. But television’s ability to create awareness and strengthen long-term retention has overshadowed some of its other attributes – especially its effectiveness as a driver of rapid response.
In the digital era, the ability for online channels such as search to provide strong attribution data has led many marketers to make it the focus of investment when seeking quick returns.
For television, the fact that it operates primarily outside of the digital advertising ecosystem makes attribution harder to determine.
But new research has found that television is not only highly effective for driving rapid response, it can also enhance the performance of media channels relied upon for short-term response such as search.
To better understand the capabilities of television as a driver of rapid response, media industry organisation ThinkTV commissioned Professor Peter Danaher, a Professor of Marketing and Econometrics and Head of the Department of Marketing within the Faculty of Business and Economics at Monash University, to examine the performance of television as a rapid response medium.
For The Payback Series research, Professor Danaher worked in conjunction with media buying group GroupM and the global marketing effectiveness consultancy Gain Theory to undertake marketing mix modelling across nine media types, with the goal of better understanding the drivers of both short- and long-term sales demand. The team considered more than 850 observations of return-on-investment (ROI) across multiple years and campaigns, provided by 60 brands across 10 product categories with combined annual sales turnover of $23 billion.
The goal was to determine whether TV in all its forms can drive sales demand in the short term, while also supporting the understanding of its effectiveness for longer term campaigns.
The answer was a resounding ‘yes’. By comparing ROI over different timelines the researchers uncovered each media channel’s incremental sales contributions and could show how the robustness of that return changed over an extended period.
The key finding was that for every dollar invested, TV generated more than $18.30 in return – $4.20 more than the next-best performing channel.
But, most importantly in terms of the research question, when examining the ROI of each channel over the first three months of a campaign, TV generated a return of $4.30. This made TV the second-best performing media type among the nine examined, and its return was only $0.20 behind search.
Furthermore, the research also proved TV’s ability to boost the returns of other rapid response media, including its ability to improve the impact of search by 18 per cent. This made TV the number one driver of search performance.
Strong performance media on any timeline
Not only did the research prove the strength of television as a driver of short-term performance, but it also showed that television had the strongest ROI over the long term. Whereas the effectiveness of many other media channels quickly waned despite ongoing investment, television demonstrated the greatest longevity of ROI of any media.
So while television advertising carries a premium, both in terms of the cost of content production and of media purchases, these costs were shown to be justified by its ability to drive rapid returns and support long term outcomes.
Furthermore, in addition to TV being the number one driver of search performance, it was also proven to be the key ingredient in boosting the performance of marketing campaigns across any media, including social, display and digital video channels.
Finally, the ability of TV to drive sales was showcased in the findings relating to each media’s ability to drive total sales, with TV shown to drive more than three times the total sales volume of any other media.
Businesses are always under pressure to deliver rapid returns, and for smaller businesses, the ability to generate immediate sales demand can often be critical to their survival.
The Payback research undertaken by ThinkTV demonstrates that investing in television advertising not only helps marketers achieve long-term brand building expectations, but also meet their short terms sales targets while boosting the effectiveness of investments in other performance-based channels.
With today’s uncertain economic conditions providing ever greater pressure for marketers to meet short term targets and maximise returns across all media, total television has been shown to generate effective sales returns while delivering long term outcomes.