Online beats TV for ROI: study

31 October 2011

LONDON: Television advertising campaigns still offer the greatest reach of all media but deliver a lower return on investment than the online equivalent, a study from the UK has found.

GfK, the research firm, assessed eight cross-media campaigns run by FMCG brands. Its analysis was based on 8,000 households, all of which had web connections, recruited with Kantar Worldpanel.

It reported that television campaigns typically reached 73% of homes possessing access to the internet, compared with 39% for press and 28.7% for outdoor.

Online ads secured 33.5% on the same metric, with display registering 28.8%, video on 11.3% and Google search on 2.3%.

More broadly, web advertising boasted an "exclusive" reach of 31.9%, meaning almost a third of people exposed to marketing messages through this route had not seen the accompanying TV spots.

Internet video scored 46% here, climbing slightly to 46.2% for YouTube, and ahead of display on 28.5% and Google search on 26.1%.

When it came to generating an increase in sales, the average improvement following a single "contact" with a consumer stood at 9% for internet ads.

Paid search via Google recorded a lift of 41% on this measure, versus totals of between 6% and 8% for TV, press and outdoor.

The strong performance of Google's paid search tools resulted despite the fact its average number of weekly exposures was around half that for TV ads.

Google search also yielded the highest return on investment, of £3.13 for every £1 spent. YouTube logged 84p, beating all online video on 81p. The web as a whole had an average payback of 75p, standing at 69p upon breaking out display ads.

Looking to traditional media, television posted 43p, rising to 53p regarding outdoor advertising and 66p for the press alternative.

"When executed appropriately online can play a significant and unique role in the marketing mix - both complementary to television, print and outdoor, but also distinct from it," Babita Earle, Digital Strategy Director at GfK, said.

"Where it is utilised well, online is a very efficient means to connect with hard-to-reach consumers who tend to escape traditional advertising channels."

Data sourced from GfK; additional content by Warc staff