Thursday, 13 October 2011

TV advertising in the UK delivers an average return of £1.70 per £1.00 invested

"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 £1.70 for every £1 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 by Thinkbox, 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 £1.70 for every £1 invested (ROI of 1:1.7). This compares to £1.48 for radio, £1.40 for press, £1.06 for online static display, and £0.45 for outdoor advertising."
Source:  Research by Ebiquity for Thinkbox, reported in a press release, 13th October 2011

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