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Think TV - TV Effectiveness
This document reviews local and international research on the effectiveness of television advertising, confirming its strong relevance and profitability for advertisers today. Key findings indicate that TV remains a preferred source of entertainment, reaches a vast audience across demographics, and has a higher ad receptivity compared to other media. The report highlights TV's emotional impact on audiences, cost efficiency, and significant influence on consumer purchasing behavior.
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Think TV - TV Effectiveness
- 1. TV EFFECTIVENESSA reviewof local and international research exploring the power of TV advertising
- 2. Television has alwaysbeen the best way for advertisers to launch new products, to grow brands and to drive sales. But with new technologies and more media options for consumers than ever before, is television advertising still effective? A review of research studies from Australia and around the world confirms that television advertising is as effective and as relevant today as ever. What’s more, TV continues to deliver the greatest profit to advertisers. Introduction
- 3. Contents Why TV Works Preferredsource of entertainment Page 5 Time spent watching screens Page 6 Reach and scale Page 7 Advertising receptivity Page 9 Advertising attention by screen Page 10 Ad engagement Page 11 Trustworthiness Page 12 Emotional response to advertising Page 13 Talkability Page 15 Impact of second screens Page 17 Advertising’s influence Page 19 Response to advertising Page 20 Results & ROI Return on investment Page 22 Sales uplift per exposure Page 23 Sales by category Page 24 Short to medium term response Page 25 Impact of emotional ads Page 26 Cost efficiency Page 27 Impact on business results Page 29 Direct impact on other channels Page 30 Impact on search and online Page 31 Amplification effects Page 33 Impact long term Page 34 TV effectiveness over time Page 36 This document is divided into two sections: 1) Why TV Works explores just some of the reasons why Television is so effective and 2) Results & ROI demonstrates the business outcomes that can be achieved with Television.
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- 5. WHYTVWORKS 60% 15% 17% 25% 8% 24% 60% Watching television Listening toradio Reading newspaper Going to the movies Reading magazines Playing video games Use internet for social/email People love their TV Source: Deloitte Media Consumer Survey 2015, n=2000+ Australians, preferred sources of entertainment, reading books/listening to music and attending live performances not charted. Preferred Source of Entertainment Television advertising works because people love watching TV. A Deloitte survey of more than 2,000 Australians shows that watching television is one of Australians’ preferred sources of entertainment. RESULTS&ROI Page 5
- 6. WHYTVWORKS People spend moretime watching TV Australians love their TV and so they spend a lot of time watching it. While people consume TV and other content across a range of screens, people spend significantly more time – 87.8% of their total screen-time - watching Broadcast TV on a TV. 7.5% Laptop/PC 2.0% Tablet2.7% Smartphone 87.8%watching Broadcast TV on a TV set Time Spent Watching Broadcast TV on TV and Time Spent Watching Content – Including TV, Movies, YouTube Videos etc – On Other Devices Source: Australian Multi-Screen Report Q3 2015 (published Dec 2015). RESULTS&ROI Australians spend more time watching Broadcast TV on a TV than they do watching all other content on all other screens combined. Page 6
- 7. WHYTVWORKS In an increasinglyfragmenting environment, reach has never been more important. TV delivers advertisers unbeatable scale Source: 15 million reach figure is sourced OzTAM and RegionalTAM data, 5 cap cities, 5 aggregated markets, average daily reach, total commercial TV, metro and regional figures are combined to form a national estimate, 1 January to 31 December 2015, consolidated data; quote sourced Deloitte Media Consumer Survey 2015. RESULTS&ROI “The audience scale and reach of TV advertising continues to be of value to advertisers in spite of – and perhaps because of – the increasingly fragmented media landscape.” Deloitte 15 MILLION PEOPLE ACROSS AUSTRALIA WATCH COMMERCIAL TV ON THEIR TV SETS EVERY DAY Page 7
- 8. WHYTVWORKS Advertisers know thatin order to grow their brands they need to get their message to as many people as possible. No other medium compares to the scale and reach of commercial TV. TV consistently reaches more people across all key buying demographics. TV reaches more consumers Source: OzTAM and RegionalTAM, 5 cap cities, 5 aggregated regional markets, 1 January – 31 December 2015, 2am – 2am, average weekly cumulative reach, total commercial TV, regional excludes spill, consolidated data. Cumulative Weekly Reach – Commercial TV Ppl 18-24 Metro: 70.6% Regional: 64.9% Ppl 25-39 Metro: 82.0% Regional: 82.9% Ppl 40-54 Metro: 90.7% Regional: 90.4% Ppl 55+ Metro: 93.1% Regional: 91.3% GBs w/ Kids Metro: 90.3% Regional: 88.1% Total People Metro 85.2% Regional: 84.3% RESULTS&ROI Page 8
- 9. WHYTVWORKS BBM Analytics conducteda survey amongst Canadian consumers to determine the appeal of advertising on different platforms. The research revealed that people not only pay the most attention to TV ads, but they are also far more receptive to the ads they see on television. People are more receptive to ads on TV Source: BBM Analytics Canada, Ad Receptivity Survey 2014 , Adults 18+. 40.3% 14.1% 11.4% 3.7% 11.9% 8.2% Television Radio Newspaper Magazine Internet Out of home Receptivity To Advertising By Medium RESULTS&ROI Page 9
- 10. 62% 37% 33% 31% Television LaptopTablet Mobile WHYTVWORKS So how do ads on TV compare to ads in other screen environments? Millward Brown’s Ad Reaction study found that Australian multi-screen users pay more attention to the ads they see on a TV than on any other screen. Ads on a TV command more attention Source: Millward Brown AdReaction 2014; ‘How attentive are people to ads on each screen’, Australian multi-screen users. Advertising Attention By Screen RESULTS&ROI Page 10 Viewability counts! Ads on TV are 100% viewable, for 100% of the ad. Online video impressions are mostly defined as 50% of pixels viewable for just one or two seconds.
- 11. WHYTVWORKS Recent biometric researchshows that TV commercials are 4 times more engaging than video ads on Facebook, leading to Higher Brand Recall and Purchase Intent. The Innerscope study found that consumers have higher visual attention with final branding moments and brand logos with TV advertising, than those viewed online as pre-roll on any device. TV ads 4x more engaging than Facebook Source: Innerscope Research 2015, biometric monitoring, eye tracking and traditional survey methods, n=390 consumers aged 18 to 34 years. Most Likely To Try Or Buy Target Brands After Seeing Advertisement 9% 25% Facebook Television 47% of consumers say they immediately skip or ignore a video ad on Facebook. RESULTS&ROI Page 11
- 12. Most Trustworthy AdvertisingMedium Consumers consistently rate TV as the most trusted form of advertising. An Ipsos survey of UK consumers found that ads on TV are by far the the most trusted form of advertising. And Nielsen’s recent Trust in Advertising global survey shows TV ads are the most trusted at 63%. Source: Ipsos Media CT/Thinkbox TV Nation 2014. Base: all adults 15+. Question: ‘In which, if any, of the following places are you most likely to find advertising that you trust?, Nielsen Global Trust in Advertising September 2015. WHYTVWORKSRESULTS&ROI People trust the TV environment Page 12 Ipsos found that trust in TV was not only much higher than any other medium, TV’s trustworthiness is actually increasing – growing 5 percentage points since 2012.
- 13. WHYTVWORKS TV ads evokeemotion Source: Ipsos MediaCT/Thinkbox TV Nation 2014. Base: all adults 15+. Advertising’s Ability to Evoke Emotion By Medium TV commercials are by far the most likely to make people feel emotion which research shows is an incredibly effective response to advertising. 77% of those surveyed in an Ipsos study said that TV ads are most likely to make them laugh, cry or feel emotional. RESULTS&ROI 77% 8% 8% 6% 6% TV Radio Newspapers Mags Internet TV’s emotive power of moving images and sound means consumers are more likely to engage with your brand and remember you. Page 13
- 14. WHYTVWORKS Television ads playa vital role in delivering messages to consumers as they prompt strong, immersive emotional connections. According to a study published in the Journal of Advertising Research, brand advertising is far more emotionally engaging when experienced on TV either alone or in combination with online viewing. TV ads drive emotional brand connections Source: Warc “TV ads deliver emotional connections” 24 January 2014 RESULTS&ROI Page 14 The power of storytelling through TV advertising helps create that all-important emotional connection that drives engagement and brand loyalty.
- 15. 58% 10% 9% 8%8% 5% 4% 3% 28% 11% 4% 8% 5% 3% 3% 2% TV Social Newspapers Websites Online search Radio Magazines Out of home Face to face / on the phone Online Source: Ipsos Media CT/Thinkbox TV Nation 2014. Base: all adults 15+. Question: On which medium are you likely to find advertising that you talk about either face to face or over the phone / online? Advertising Talkability By Medium If you want people to talk about your brand, TV ads are your best bet. Ads on television are most likely to drive conversation - either face-to-face, via phone, or through email/social media - proving the powerful water cooler effect of television exists both offline and online. WHYTVWORKSRESULTS&ROI TV ads are the most talked about Page 15
- 16. WHYTVWORKS When Australian socialmedia users were asked how often they make comments about TV on social media, an overwhelming 29 percent said they did once or more times a week, with a further 8 percent commenting every day or almost every day. This daily social media engagement with TV provides a huge opportunity for advertisers to truly connect with their audiences and turn TV viewers into social ambassadors for their brands. TV is the social media Source: Spotlight on Social TV, November 2014, conducted by Network Ten and Research Now, online survey of 1,067 social media users, cap cities. RESULTS&ROI Almost 1 in 3 social media users talk about Television on at least a weekly basis. Page 16
- 17. WHYTVWORKS New technologies areproviding a forum for discussion about what viewers are watching on TV and allows them to search and purchase brands all without leaving the couch. Deloitte found that 25% of Australian multi-taskers actively engage in activities that directly relate to what they are watching and 1 in 5 browse for products and services online while watching television. TV drives engagement with brands Source: Deloitte Media Consumer Survey 2015; Neuro-Insight Study “Re-socialisation of TV” for Seven Network and MEC, engagement in program. RESULTS&ROI Page 17 A Neuro-Insight study also found that interacting with social media while watching TV drives a 9% increase in engagement and a 26% cumulative increase in engagement.
- 18. WHYTVWORKS A recent study“Television Advertising and Online Shopping” concludes that the second screen puts a virtual store in every consumer's pocket. The study revealed that multi-screen users visit, browse and buy advertised products within moments of seeing a commercial on TV. TV is the new shopfront Source: Television Advertising and Online Shopping 2015, Science Daily. RESULTS&ROI Page 18
- 19. WHYTVWORKS 63% 47% 46% 42% 41% 38%38% 37% 31% 27% Television Cinema Prod P'ment News Mags Brand EDMs Radio Outdoor Social Games Australians nominate TV advertising as the medium that works better than any other at influencing their behaviour and purchasing decisions. A 2015 Deloitte study found that 63% of Australians nominate TV advertising as the biggest influence on their decision to purchase goods and services. TV advertising has the greatest influence Source: Deloitte Media Consumer Survey 2015; n=2000+ Australians, Q: “To what degree do the following influence your buying decisions?” chart includes top ten advertising influences. Most Important Influencers On Buying Decisions RESULTS&ROI Page 19
- 20. WHYTVWORKS TV advertising isthe best medium for driving an action. A recent Nielsen survey shows more than six in ten online Australians take action (do something) as a result of an ad seen on TV, making TV the most powerful advertising platform to drive a consumer response. . TV is the ultimate response medium Source: Nielsen Global Trust In Advertising Survey Q1, 2015; “To what extent do you take action on the following forms of advertising?”, paid media. RESULTS&ROI 63 58 52 48 45 41 41 40 34 31 30 30 Ads on TV Ads in newspapers Ads in magazines Ads on radio TV product placements Ads before movies Billboard/outdoor ads Ads served in search Ads on social networks Online video ads Ads on mobile devices Online banner ads Response to Advertising Platforms – Sometimes or Always Take Action Page 20
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- 22. £1.79 £1.52 £1.48 £0.91 £0.37 Television RadioPress Online Display Out of Home In one of the most robust studies of its kind, Ebiquity in the UK found that TV advertising creates the most profit for businesses. Their analysis showed that TV advertising delivers an average profit return of 1.79 pounds for every pound invested. TV ads generate the most profit Source: Payback 4: Pathways to Profit, Ebiquity UK database 2011-2014 (analysis based on 10 advertising categories, 100 advertisers). Return on Investment – Ebiquity Database WHYTVWORKSRESULTS&ROI Page 22
- 23. WHYTVWORKS Television advertising consistentlyoutperforms other media when it comes to generating sales. Ebiquity in the UK found that TV is twice as effective as the next best performing medium at creating a sales uplift per equivalent exposure. TV is the leading sales driver Source: Payback 4: Pathways to Profit, Ebiquity UK database 2011-2014 (analysis based on 10 advertising categories, 100 advertisers). 100% 52% 27% 13% 11% Television Press Radio Online Display Out of Home The Ebiquity study found that if one exposure on TV delivers 100 product sales, then an equivalent exposure on press would deliver 52 sales. Media Effectiveness Index – (TV Index = 100) RESULTS&ROI Page 23
- 24. 0 1 2 3 4 Automotive Finance FMCGRetail Telcos TV Online Paid Search Print Radio WHYTVWORKS TV ads drive more sales across categories Source: Marketshare ‘Evaluating TV Effectiveness in a Changed Media Landscape’ 2010-2014, Average Lift Factor = 1. Relative Lift Factor Across a broad range of industries, TV advertising is consistently more effective at impacting KPIs - such as sales and new accounts - than paid search, print, radio or online (display and social). A MarketShare study in the U.S. found that at similar spend levels, television’s lift is consistently 7 times paid search and 3 times online. RESULTS&ROI Page 24
- 25. WHYTVWORKS TV accounts fora third of all media sales Base 61% Short to medium- term media 39% TV 33% Generic PPC Search 22% Online display 12% Affiliates 10% Print 8% DM & door drop 8% Radio & outdoor 4% Other online 3% A recent Group M study showed that on average media drives 39% of sales in the short to medium-term. The remaining 61% comprises ‘base’ sales which are impacted by historical media activity, but also reflect seasonality, distribution or promotional activity. TV advertising drove a third of these media-driven sales - more than any other channel. Short to Medium Term Response Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Based on 15 brands. Other online media (3%) includes VOD, email, social. Short to medium term sales (ie. within 3 months of a campaign ending). RESULTS&ROI Page 25
- 26. WHYTVWORKS TV’s ability todrive an emotional response is undisputed. But how does this translate to business outcomes? A recent neuroscience study conducted by Nielsen found that advertisements with the best emotional response generated a 23 percent uplift in sales volume. Emotional ads drive a 23% lift in sales Source: Nielsen Consumer Neuroscience Internal Study 2015, FMCG brands. Lift in Sales Volume vs All Ads For The Brand -16% -2% 23% -30% -20% -10% 0% 10% 20% 30% Below Average Ads Average Ads Above Average Ads RESULTS&ROI Page 26
- 27. WHYTVWORKS TV drives themost cost-efficient response Marginal Cost Per Response By Media Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Based on 7 brands. Due to its scale and reach, television advertising continues to generate a cost-efficient level of response than other media. Marginalcostperresponse Spend TV Print Radio Outdoor Online display Generic PPC Search RESULTS&ROI Page 27
- 28. WHYTVWORKS 2.7 times morecan be invested in TV Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Based on 7 brands. 0 50 100 150 200 250 TV Outdoor Generic PPC Search Print Online display Affiliates Radio Comparativespendindex Indexed Media Spend At Saturation Efficiencies can be best maximised best through television advertising. Group M’s analysis showed 2.7 times more can be spent on television than online channels before a significant decrease in inefficiency takes place. RESULTS&ROI Page 28
- 29. The Video AdvertisingBureau in the US recently conducted a study to explore the correlation between television advertising spend and business results. The research found that companies that increased their TV spend over a 4-year period saw substantial growth in revenues, stock price, and earnings per share. Meanwhile, the companies that decreased their TV spend, underperformed against the averages of the 100 companies examined in the study. WHYTVWORKS Increasing TV ad spend drives revenue Source: VAB ‘A Question of Impact’ 2015., historical TV spend of 100 large, well-known parent companies across major categories (auto, CPG, entertainment, financial, pharmaceuticals, restaurants, retail, travel, telcos). Key Findings • There is clearly a correlation between TV ad spend and business performance. • Financial results are strongest for companies with consistent yearly increases in TV ad spend. • Almost all companies that increased their TV ad spend saw substantial growth in revenues (+26%), stock price, and earnings per share (+38%) relative to the market. • Companies with consistent, multi-year increases in TV spend saw the greatest spikes in revenues and stock measures. • Companies that decreased their TV ad spend vastly underperformed the averages of all companies studied. Page 29 RESULTS&ROI
- 30. WHYTVWORKS TV drives responsethrough other channels 45% 29% 25% TV's Contribution to Bricks and Mortar TV's Contribution to Web Traffic TV's Contribution to Telephone Television’s Contribution To Media-Driven Response Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Based on 8 brands. Media-driven sales. TV is proven to drive a response through several channels directly. Group M analysis shows it generates nearly a quarter (25%) of all telephone sales, 45% of all sales via bricks & mortar and 29% of sales driven through direct-to-site web traffic (including natural search). RESULTS&ROI Page 30
- 31. WHYTVWORKS TV has hugeimpact on search and online 33% 33% 26% 20% TV's Contribution to Paid Search TV's Contribution to Facebook TV's Contribution to Online Display TV's Contribution to Affilitates Television’s Contribution To Media-Driven Response Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Based on 8 brands. Media-driven sales. Facebook metric is likes/comments. GroupM also discovered that TV advertising drives an indirect response through online channels. Their analysis showed TV generates 33% of sales via paid-for online search, 33% of sales via facebook, 26% of sales via online display and a fifth of sales via affiliate marketing. RESULTS&ROI This highlights the need for marketers to invest in sophisticated attribution modelling tools to be able to assess the true impact of each marketing channel. Page 31
- 32. WHYTVWORKS TV is aproven driver of web traffic A recent U.S. study analysed 125 ‘call-to-action’ brands across a range of advertiser categories - big and small budgets, national, regional and local - with more than 100,000 unique visitors per month. Analysis revealed that 82% of these brands showed a correlation between television advertising and website traffic. Further, the study found that call-to- action advertisers saw website traffic rise and fall with their TV ad spending. Source: VAB Ignition Point Study 2015, unique visitors as measured by ComScore. RESULTS&ROI Page 32
- 33. WHYTVWORKS TV amplifies theeffects of other media TV advertising consistently makes other elements of advertising campaigns work harder. The synergy between TV and online is particularly strong. Campaigns that use TV and online together are twice as efficient as those that incorporate brand advertising with other kinds of activation channels. Source: Thinkbox; Twitter and Thinkbox Research Brain Juicer 2014; Nine Entertainment Co. Client Sales Effect Study, during the promotional period. RESULTS&ROI Page 33 In the UK, Sainsbury used TV and Twitter to great effect. Their integrated campaign approach led to positive emotional brand response, increased purchase intent and drove an uplift in key brand attributes. The likelihood of choosing the brand the next time significantly increased for those exposed to TV + Twitter activity. + 4% Twitter Only + 21% TV & Twitter +8% TV Only An Australian study measured the sales uplift of viewers who were exposed to a network-driven TV + online promotional campaign. It found that the shoppers who were exposed to the cross-platform communications shopped more frequently and bought more of the promoted product. They also spent 24% more on each shopping occasion. + 24% Increase in spend Case Studies
- 34. WHYTVWORKS Half of responsegenerated in longer term Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Communications work in the longer-term by driving consideration amongst those who might not currently be in the market for your brand. By investing in brand we build our base of sales which in turn makes our tactical communications more effective. A TV Response study found that around half of all media-driven response comes in the long-term (within 3-24 months post- campaign). Want Need RESULTS&ROI 20% 40% 41% 54% 68% 75% 80% 60% 59% 46% 32% 25% Auto Home Imp Telcos FMCG Finance Retail %TotalROI Short-term ROI Long-term ROI Page 34 The longer-term impact tends to be significantly larger for products we desire (eg cars) over those that we need (eg insurance).
- 35. WHYTVWORKS Brand TV themost cost-efficient long term Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Based on 7 Brands. IPA’s 2013 Ad Effectiveness: the long of the short of it. Brand Response TV is the most efficient driver of long-term response. This was demonstrated in the TV Response UK study, which found that BRTV was responsible for 52% of the long-term media impact; and BRTV was 40% more efficient at driving long-term response per pound than the next best media platform. This backs up findings from previous studies, including the IPA’s Ad Effectiveness Study which found that TV advertising is vital for long-term brand health. Efficiency index at driving brand metrics (higher = better) - 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 Online display DRTV Radio Print Outdoor Brand Response TV Efficiency index (uplift per spend) RESULTS&ROI Page 35
- 36. WHYTVWORKS Research consistently demonstratesthat TV is as effective as ever. • A recent MarketShare US study which meta analysed thousands of marketing optimisations by major advertisers found that TV advertising has maintained its effectiveness over the last five years. Their analysis showed not only that TV advertising effectiveness has remained steady, but that it also outperforms digital and offline channels at driving key performance metrics such as sales and attracting new customers. • And Ebiquity UK’s highly acclaimed Payback Study, which looked at over 4,500 ad campaigns, found that TV continues to deliver the highest return on investment (ROI) of any form of advertising. TV’s effectiveness isn’t waning Source: MarketShare “Evaluating TV Effectiveness In A Changed Media Landscape” 2015, Thinkbox Ebiquity Payback 4 Study RESULTS&ROI “TV has consistently demonstrated the highest ROI over a 7- year period, during a period of unprecedented economic and technological upheaval and change. TV is continuing to demonstrate its value ...”. Ebiquity UK Page 36
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