Australian brands and the difference between efficient and effective ROI: ThinkTV study

While most media channels deliver positive ROI, some channels generate sales for longer periods, making the return on investment more valuable as the channel drives greater and sustainable business growth. 

Why it matters

That’s  according to a new report from ThinkTV which looks at how to maximise ROI by choosing channels with the ability to deliver positive ROI as well as short- and long-term sales. Media ROI is only half the picture for Australian brands and chasing ROI without adequately considering campaign time frames could be at the expense of media-driven sales.

Five findings

• Channels drive markedly different levels of demand: TV with an average of over 50% media allocation delivers more than 50% of media-driven sales, versus around 18% spend to out-of-home accounting for less than 16% of media-driven sales.
• Channels with strong ROI may not sustain sales volume over campaign investment periods – search has the strongest ROI but is one of the weakest media selections when it comes to generating sales beyond short-term timeframes.
• Search is driven by other media and is a demand harvester, not a demand driver; consumers are already in the purchase funnel, hence the channel lacks the long-term ability to drive growth.
• The rate of return for media channels differs, as does the potential for sales growth – the rate of incremental sales for TV reduces more slowly than any other channel, which means increased investment in TV will improve ROI over time.
• The risk in achieving a return varies by channel, with digital video being the least risky channel and cinema being the most; unlike share portfolios, a higher risk media mix does not necessarily deliver better efficiencies or growth.

Background

The latest edition of ThinkTV’s Payback Series is an Australian study that analyses the campaign performance of 60 brands with a collective annual turnover of A$23 billion and an annual media spend of A$450 million. 

Sourced from ThinkTV