With the launch of a new report and online tool for working out optimal media mixes, Thinkbox aims to provide a starting point for investment decisions based on an econometric analysis of over £1 billion of media spend – and no, it’s not just about TV.
The new research, brought together in a study called Demand Generation, is a meta-analysis of 50 brands’ investments across 10 different forms of advertising, conducted by Mediacom, Wavemaker, and Gain Theory on behalf of Thinkbox, the marketing body for commercial TV in the UK. Naturally, the report is very positive about TV, but there is more to learn.
The tool itself allows users to drill down into the data according to six different categories or all (FMCG, finance, retail, online retail, automotive, and travel). From there, users can enter whether the brand in question is mass market or niche, how many of its sales take place online, the size of the brand by annual revenue, size of media budget and whether they want to understand projected output in terms of revenue or profit (in the case of the latter, you can enter the percentage margin desired), and crucially whether the user wishes to minimise risk or not.
The results were refreshingly balanced across media for optimal spend; but TV kicks in more heavily once ‘Minimise risk’ is selected. This is, according to the study, because variability of returns differs significantly across different forms of advertising. The measurement is based on the variance of ROI within the middle 50% of all the campaigns studies, effectively taking away the worst and best performing. By this measure, linear TV and broadcaster VOD are the least variable forms of advertising with +/-20% variance compared to the median return. For contrast, the same study pegs a handful of other forms – Online display, Cinema, Social media and Print – at +/- 60%.
While most channels boost each other’s efficiency, TV – again – generates a far higher multiplier across other channels at 54% compared to other channels’ 8% average. This makes sense given the medium’s continuously high reach – 95% of the UK population each week across both linear and BVOD, per 2019 IPA Touchpoints and BARB data.
It is also effective. Following earlier Thinkbox research (with Ebiquity and Gain Theory), TV was shown to account for 54% of all investment but 71% of profit within three years, with the largest profit ROI of any medium at £4.20 for every £1 invested.
Effects are both short- and long-term
Within the first 2 weeks of a campaign, TV delivers on average 23% of media-driven sales, the highest of a demand generating channel, the study says; the next best channel at 10% is print. Due to the sustained effect of advertising, during the following 6-18 months, TV goes on to deliver a further 2.4 times more sales than it generated in the first 2 weeks.
Meanwhile, generic search advertising, which counts as both a demand generator and a demand fulfilment channel is “TV’s natural partner”, with an average of 29% of media-driven sales within 2 weeks.
Sourced from ThinkBox, WARC