New Study Shows TV ads Deliver the Most Profit

New Study Shows TV ads Deliver the Most Profit

LONDON, October 13, 2011/PRNewswire/ --

TV ROI is 22% Higher Than 5 Years Ago, Despite Recession

- TV delivers more profit per GBP spent than other forms of advertising,
according to Ebiquity -

- TV has a 'halo effect' which improves the performance of other
advertising -

Amid gloomy economic forecasts, a new study has revealed how advertising
performed during the economic downturn in recent years. It shows that TV
advertising created the most profit (an average return of GBP1.70 for every
GBP1 invested), and that its return on investment (ROI) has increased by 22%
in the last five years.

Payback 3, an independent study commissioned from Ebiquity
[http://www.ebiquity.com ] by Thinkbox [http://www.thinkbox.tv ], is an
econometric analysis of 3,000 ad campaigns across nine advertising sectors
between 2006 and 2011. It compares, on a like-for-like basis, the sales and
profit impact during the last five years of five forms of advertising: TV,
radio, press, online static display and outdoor.

Other key findings include:

- TV advertising is 2.5 times more effective at creating sales
uplift per equivalent exposure than the next best performing medium
(press);
- TV advertising has a 'halo effect' across a brand's portfolio.
38% of TV's sales effect is felt by products not directly advertised;
- TV's 'halo effect' also makes other forms of advertising work
harder;
- TV is responsible for 71% of attributable sales in Ebiquity's
database, but only accounts for 55% of spend.

Effective profit

Ebiquity found that TV advertising's ROI is on average 22% higher than
five years ago, despite the recession. This is because TV's effectiveness
(sales uplift per exposure) has remained undiminished while the cost of
advertising on TV has been falling in both absolute and relative
(inflation-adjusted) terms.

TV also delivers the most extra profit, Ebiquity found: an average
return of GBP1.70 for every GBP1 invested (ROI of 1:1.7). This compares to
GBP1.48 for radio, GBP1.40 for press, GBP1.06 for online static display, and
GBP0.45 for outdoor advertising.

Effective sales

Ebiquity found that TV consistently outperforms other media in
generating sales and is on average 2.5 times more effective per equivalent
exposure than the next best performing medium. Press advertising delivers
37% of the sales uplift TV creates, radio 19%, online static display 15%,
and outdoor 9%.

Ebiquity also found that, based on advertising investment in its
database, TV advertising is responsible for 71% of the attributable sales
but accounts for only 55% of the spend.

'Halo effect'

TV advertising creates a 'halo' effect across a brand or range of goods.
38% of TV advertising's effect is achieved on products not directly
advertised (e.g. if a beauty brand advertises a shampoo product on TV, the
campaign is likely to boost sales of its other products, such as body spray
or moisturiser).

Ebiquity found that TV advertising consistently makes other elements of
campaigns work harder. It found that TV's effects are felt by all
accompanying media, but are most starkly seen in combination with radio
advertising, where radio's effectiveness is increased by up to 100%, and
with branded search, which a typical TV campaign increases by up to 35%.

Andrew Challier, Effectiveness Practice Leader at Ebiquity: "TV is
weathering a perfect storm of economic downturn and increased competition
from emerging media. Its unrivalled effect on sales and profit and its
profound influence on other media make TV advertising both the most
effective form of advertising and a powerful ally to other media and
marketing mechanics, both on and offline."

Neil Mortensen, Research and Planning Director at Thinkbox: "Advertisers
instinctively know that TV advertising works but we must make sure we
continue to prove it. Ebiquity's study does exactly that. Our task now is to
share this important information with businesses and show them that no other
form of advertising creates more profit than TV."

http://www.thinkbox.tv

http://www.ebiquity.com

Research methodology

1) All reported findings are drawn from Ebiquity's exhaustive
database covering all measured advertising effects across 3,000 models,
9 categories and over 100 UK base clients.
2) Ebiquity's database has been 'cleansed' with outliers and
inconsistencies removed to enable robust comparison.
3) The advertising effects are derived via modelling techniques
that have been methodologically consistent across the last 10 years; the
lead approach is econometrics which enables understanding of all key
drivers of sales including marketing effects. Fundamental techniques
used are ordinary least squares (OLS) and Seemingly Unrelated
Regression.
4) Ebiquity always take a 'bottom up' approach to understanding
the role of marketing and media; this ensures a causative relationship
is established, rather than the more questionable correlative effect of
a top-down longitudinal approach which can misattribute key effects and
misestimate the true impact of advertising.

Contact: Simon Tunstill [simon.tunstill@thinkbox.tv ] | Head of PR,
Thinkbox | +44(0)20-7630-2326

Source: Thinkbox.tv

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