
Linear TV continues to underperform versus other media for advertisers
when it comes to return on media investment -- specifically gross profit margin, according to Big Chalk, a marketing analytics company.
The company says that for every media dollar invested,
linear TV media buys yielded an average 62 cents in 2024. This is slightly more than the ROI gross profit margin -- 58 cents -- in 2023.
Looking across 11 media channels, Big Chalk says the
average ROI is $2.07 -- a weighted average -- versus $1.42 in 2023.
Although linear TV lags behind, it continues to offer positive results for brands in other ways.
“Not
everything is about ROI -- in a lot of instances, and with linear TV specifically -- the brand building power through that channel is still very strong,” says Rick Miller, partner, marketing
effectiveness at Big Chalk. “It can still move products off shelves.”
advertisement
advertisement
The problem with linear TV continues to be its high cost per thousand viewers (CPM), says Miller.
Big
Chalk estimates average terrestrial TV CPM is $43.99 -- the most expensive of all media channels.
Other video channels are more modestly priced, including connected TV (CTV) at $20.31.
The strongest ROI comes from streaming audio, resulting in a ROI of $3.22 for every dollar media invested in that channel. Miller says this is partly due to less ad skipping on this platform.
Behind streaming audio, other categories that are performing well include retail media networks at $2.47, paid social media at $2.38, and digital display at $2.29.
Direct competitors to
linear TV include online video at $2.08 (versus $1.20 the previous year) and streaming TV/CTV at $1.78 (vs. 1.66 in 2023).
Overall, there has been a 46% gain (to $2.07) in gross profit margin
(return on media investment) per dollar spent.
“Although marketing executives may have little to smile about from an economic planning perspective, they should take some solace that
media ROIs have improved since Big Chalk released its last round of benchmarks,” Miller said via a press release.
When it comes to sales volume -- return on average sales (ROAS) --
streaming audio was also tops for brands and advertisers, at $10.73. Out-of-home media is next at $9.73, with retail media networks at $8.22 and paid social media at $7.94.
Big Chalk clients
include consumer packaged goods, general retail, specialty retail, travel/leisure and QSR/dining brands. Over 200 campaigns have been measured during the benchmarking period -- roughly $500 million in
media spend.
Big Chalk uses “a standard 30% gross margin to calculate ROI, a common estimate in consumer categories. Margin will fluctuate by individual
brand.” At the same time, it does not estimate "net margin," which would include operating costs.
The company says its data is “built with custom
regression models that control for product pricing, macroeconomic factors, reach and distribution, and other effects.”