Will 2020 – with its ups and downs, its re-shuffling of possibilities and consumer behaviour under the constraints of lockdowns, semi-lockdowns and other curfews – have permanently changed media investment in TV? Or its effectiveness? Virginie Lannevere of Analytic Partners doubts it.

Fleeing and flooding during the first wave

When the first lockdowns started across Europe, many large advertisers deserted TV screens in droves. This exodus seemed paradoxical when viewing massively increased over the same period – locked in their homes, people spent even more time in front of their TV screens. However, for non-essential brands, fraught with the uncertainty of whether online distribution could compensate for the closures of entire distribution channels, the return on investment of TV advertising was often considered too risky. Nevertheless, while the costs per gross rating point (CGRP) were falling, TV became affordable for all those brands who were able to access it.

Most of the advertisers that returned en masse to TV in the weeks preceding, or immediately following, the first lockdowns saw very positive returns on investment (ROI) – even when compared with the same period the previous year. Double-digit growth was not uncommon. The rush on TV media coincided with a consumer need for a “return to normalcy” leading to catch-up overconsumption.

The cost inflation per GRP did not erase performance. The better performance of ROI media can be explained by the fact that as brands had to move quickly, they focused their budgets on the historically highest ROI media. So, it wasn’t necessarily that the ROI was improving for these media, but that they benefited from more investment going into them at the expense of lower ROI channels such as OOH billboards.

Analysing and adapting to the new surroundings

A different performance dynamic has been emerging since September when the trend of overconsumption came to a halt and CGRP increased, sometimes even significantly on certain dayparts or formats. Negotiating margins with the TV companies selling slots have declined as well, due to increased demand for space and because budgets are affected in the short term – such as heavy ups, when brands make additional one-off advertising investment in response to a particular situation.

At Analytic Partners, we are therefore starting to measure the limits of the overweighting of TV in media investment, via our econometric models. We have identified three key takeaways:

  • The quality of response in terms of incremental sales is declining, constrained by the limitations of distribution linked to the health crisis and increasingly impacted by the economic and social crisis.
  • There is a certain loss of benchmarks, translated into daypart investments or formats which move away from the rules and historical success factors. All of this comes added to supply / demand effects which makes negotiations harsher with the agencies and sometimes leads to sub-campaign performance.
  • The synergies historically demonstrated between TV and Dynamic Digital have been more difficult to maintain, as tight budgets have meant TV has been favoured. However, these synergies continue to play in full force, and our performance analyses carried out since March 2020, until the end of November, demonstrate that investment in TV and Online Video at the same time remain the best option for advertisers.

Beyond these short-term changes in ROI, we are starting to measure pre- and during-COVID effects on the impact of different media on different sales channels. TV, like most media channels, generates more online sales today than in the pre-COVID period, and it is likely that this will continue to be true in the future.

What to do in 2021?

Overall, our results suggest a return to the “world before” for the relative effectiveness of TV. We advise advertisers to keep the following steps in mind:

  • Refocus on the fundamentals of the effectiveness of media strategies for your brand. Don’t assume that 2020 will have structurally made TV much more efficient, based on increased reach.
  • Continue to think of TV as an omnichannel strategy and exploit synergies so the halo effect of integrating advertising across different media continues to boost effectiveness.
  • Continue to test alternative dynamic media channels, such as streaming TV or Replay channels. We have seen very encouraging results in terms of streaming ROI in 2020, superior to all other channels.
  • Focus on the basics of economic profitability of each campaign. The aggregate 2020 figures have no business virtue, they will only be accounting data in the end. It is also essential to focus measurement and analysis on the performance (response, cost) of the most recent period (since September 2020 for example).
  • Intensify the dialogue between media agency and performance measurement analysts, whether done internally or outsourced, because by everyone sharing their specific expertise, this collective intelligence will offer the best insights.
  • Holistically measure media ROI: brands that limit themselves to measuring channel by channel, or worse measuring a single channel, risk underestimating the impact of marketing and underestimating their ROIs by nearly 50%.
  • Multiply all the approaches to measuring and reading performance, because in 2021 – as in 2020 – the best approach to decision-making will be to anchor it in collective intelligence. Overall, there is a real difficulty in "reading" media performance results at this time, so for companies without a sufficient analytical platform, the risks on media investment have increased significantly in line with general business risk.

What will remain from these extraordinary months in 2020, into 2021 and beyond, is that advertising investment strategy is essential for operational agility. And the best strategies emerge from collaboration and mutual understanding of processes and constraints – where all the agencies and consultancies working in the brand ecosystem share intelligence.