TV's ROIs Dominate All Media
- by Wayne Friedman , June 1, 2017
Updated research from Neustar -- a study backed by Horizon Media and Turner -- says that over a seven-year period from 2010 to 2016, TV advertising consistently outperformed digital among key return on investment (ROI) business measures.
TV delivered up to seven times the key performance indicator lift of paid search, and five times that of display advertising.
TV also showed higher return on investment gains over print and radio.
Key performance indicators here are defined as actual business outcomes: sales and/or new accounts.
For 2017, consumer electronics marketers claims nearly four times the business lift for a $1 million TV investments; movie marketers nearly three-and-a-half times; and quick service restaurants, three times.
Two years ago, the study says automotive, for example, commanded some of the best results from a $1 million TV investment -- with roughly a three-and-three-quarters lift in business; telecommunications, a three-times hike; and consumer product and financial companies posted ROI of just over a two-and-half times.
In 2015, retail showed over a gain of nearly 1.2 times for TV, with online showing a 0.7 business hike -- each media from a $1 million investment.
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Wayne, GIVEN that the majority of media spend during 2000-2006 was TV, I am not surprised to see a correlation between TV and ROI. Today, the investment in digital is at par with TV (some would actully say it has surpassed TV) and so any ROI calculations today would be very different. Also, I have seen proprietary research that shows that ROI is maximized when TV is combined with digital.
Also, we need to take this level of analysis to the target level. Why do you think digital investments have grown so much? Millennials. They drive digital and are light TV users. For this reason, the data you posted in interesting, but not helpful for clients who need a better handle of ROI calculations for specific targets segments.
While most cross-channel attribution models only include digital marketing channels, those that do include the impact of TVs advertising make it clear that TV ads have a positive impact on both digital marketing channels and business results.
As far as why do you think digital investments have grown so much? It is largely because millions of small and medium size businesses are heavy users of digital marketing channels. However, major consumer brands who have to compete with these SMEs for consumer attention on digital marketing channels, find it hard to achieve efficient, large scale, timely campaign Reach, which is a key driver of marketing effectiveness.
Dr. Jake, I happen to take all of the media sponsored ROI studies of this type with a huge grain of salt and the ones cited in this piece are no exception. However, to your point about media spending, the single thread of information that I see in most of these ROI studies is that placing too much of your ad dollars in a single media channel leads to reduced ROI per dollar as the point where the dilution of impact caused by ad exposure redundency is too quickly reached. That said your comment about ad spending for digital vs TV is probably not accurate. The digital ad spending figures include vast amounts of non-branding spend---classifieds, direct response, search, sales service, etc. As a result, it is likely that even today, the brands studied in these ROI investigations---mainly branding campaigns---spent five times more in TV than in digital, maybe more.
Hello Dr. Jake Beniflah. It's interesting that you've seen proprietary research that shows the effect of combination of TV and digital. I'm actually working for a small Korean startup that measures the effect of TV ads (see bitsound.io), and would love to hear more about your research. I think I could share what I've been measuring with you. Could you please accept my friend request in Facebook?