In what’s certain to be music to the ears of Australian TV bosses, a new study (albeit out of the UK) has found TV advertising generates the highest return on investment (ROI) of any media over both the short-term and the long-term.
The study was commissioned by UK industry body Thinkbox and was carried out by marketing analysts at Ebiquity and Gain Theory, who evaluated over 2,000 ad campaigns across 11 categories over the past three years. You can read the study in full here.
According to the study’s findings, TV advertising accounted for 71 per cent of total ad-generated profit made by campaigns over the three years. That equated to to £4.20 ($A7.34) in profit for every £1 ($A1.75) spent.
In comparison, it was £2.43 for print, £2.35 for online video, £2.09 for radio, £1.15 for out of home, and (a rather disappointing) £0.84 for online display advertising.
The Thinkbox study revealed that advertising overall in the UK, for every £1 spent it generated £3.24 in ROI for the client.
It also discovered that TV advertising also worked best over the short term which they considered to be within three to six months of a campaign finishing.
It found that TV was responsible for 62 per cent of all advertising-generated profit in the short-term at an ROI of £1.73 for every £1 spent. That was followed by print (22 per cent), radio (five per cent), online video (five per cent), out of home (three per cent) and online display (two per cent).
Commenting on the findings, Thinkbox’s research and planning director, Matt Hill, said: “This study by two highly respected, independent organisations with robust data at their disposal bridges the gap between the marketing and finance departments with compelling evidence that quantifies advertising’s ability to deliver shareholder value, and TV’s centrality to that.”
Andrew Challier, chief client officer at Ebiquity, added: ” “The study is important because it shifts the emphasis away from the ROI number ‘arms-race’ to a more responsible approach that talks about the scalability of ROI by media channel, and the impact that this has on profit generation.
“This is arguably more business-relevant and almost certainly of more interest to CFOs,”Challier said.