A 15% shift in budget from TV to online delivers great effectiveness

"With brand marketers always looking to get the most out of their advertising budgets, the Interactive Advertising Bureau (IAB) today released “A Comprehensive Picture of Digital Video and TV Advertising: Viewing, Budget Share Shift and Effectiveness,” a Nielsen research study commissioned by the IAB investigating how moving dollars from TV ad budgets to digital media – especially digital video – affects reach and costs. Shared at the sixth IAB Annual Leadership Meeting, “Big Data & Big Ideas: Friends, Enemies, or Frenemies?,” at the Arizona Biltmore in Phoenix, the report reveals that a 15 percent shift in media spend to digital will drive a distinct increase in advertiser reach across verticals.
The study benchmarked how real TV schedules across key advertiser verticals perform as money moved to digital. To accomplish this, the research examined 18 real TV schedules across advertiser verticals. Categories included Consumer Packaged Goods (CPG), specifically Health & Beauty and Food & Beverage, as well as non-CPG verticals such as Technology, Automotive, Retail, Finance and Telecom. Findings pointed to various benefits from a 15 percent shift into digital:
- On average, CPG reach grew 3.4 percent (3.4 reach points) among persons 18 and older (P18+) when 15 percent of ad spend moved into digital
- In all other categories beyond CPG, schedules consistently averaged an incremental reach of 6.2 percent (or 6.2 reach points) at the same reallocation of 15 percent of budget to digital among P18+
- Across verticals, the 15 percent share shift results in more reach at lower costs per point, dropping from an average of $67.6K to $63.0K
Corresponding CPMs decline from $13.82 to $12.31
Not only did shifting TV ad budget to digital result in increased reach, but that reach was more effective. The combination of digital advertising and television commercials was found to be a particularly potent mix, with duplicated reach shown to be more effective on key brand effect metrics than either platform alone. Research demonstrated that planning and running video ads online prior to TV boosts brand recall for that same ad playing on television by 33 percent. There were similar gains when it came to online display ads, with consumers 25 percent more likely to recall the brand if they had seen the display ad before seeing the ad on TV.
“This study documents that brands need both online media, especially digital video, and TV to reach consumers effectively,” said Sherrill Mane, Senior Vice President, Research, Analytics and Measurement, IAB. “It’s eye-opening to discover that viewers actually have an easier time naming the brand behind a TV commercial if they have had the opportunity to be introduced to the creative first on a digital screen. Marketers and media planners clearly need to start thinking about their digital buys – whether video or display – before they forge ahead with a traditional television buy, in order to optimize reach and effectiveness.”
Looking specifically at digital video – whether in short-form or full episodes – online video ads scored higher impact than TV ads when it came to general recall, brand recall, message recall, and ad likeability. Full episodes online are particularly effective. For example, general recall is 39 percent higher for video ads during a full episode online than on TV. Brand recall, message recall, and ad likeability of ads during a full episode online are almost double those of a TV commercial.
This trend is consistent within all ad categories, with Hospitality, Finance, Retail, Restaurants, Food & Beverage, and Pharma noted as the top performing sectors for brand effectiveness in ads that appear during full episodes online."
Source:  Press release from the IAB, 25th February 2013