Brands Derive Majority of Advertising-Generated Profit from TV Advertising

“Businesses are under immense economic pressure and marketers have to justify everything they spend. It is crucial that we constantly refresh and update our understanding of what different forms of advertising contribute so that marketers are spending wisely.” – Matt Hill, Thinkbox

 

Despite those who would have you believe otherwise, TV remains the strongest advertising medium.

 

With every new piece of research, TV consolidates its position as the most effective way to spend your advertising budget. For marketers this is invaluable. There is always room to test and measure new strategies but knowing where to put the bulk of your budget (based on research) is always useful.

 

The latest research from Thinkbox, Ebiquity and Gain Theory has supported TV’s premier position by concluding that:

 

“TV advertising generates the highest return on investment of any media and is the medium most likely to create advertising-generated profit both in the short-term and the long-term.”

 

The study is the first of its kind, having managed to quantify the total profit generated by an array of advertising mediums and compare them side by side.

 

This allows marketers to project with more ease the likely ROI each medium might deliver.

 

The findings suggest that advertising creates an average profit of £3.24 per pound spent over three years, with TV responsible for a whopping 71% of that profit.

 

You might be wondering which medium comes second?

 

This one’s more of a surprise…

 

After all, there is so much noise surrounding online advertising surely that is the growing medium?

 

Rather ironically, given many publications move to online-only distribution it is print advertising that comes in second place; delivering a sturdy profit ROI of 18%.

 

Followed by:

 

Online video – 4%

Out of home – 3%

Radio – 3%

Online Display – 1%

 

To clarify, in the study ‘online video’ refers to both on-demand advertising and video ads across social platforms.

 

It appears that TV is still king overall and delving deeper into the study provides interesting reading too, as TV was found to be the most ‘effective short-term’ advertising solution. With TV advertising responsible for 62% of all advertising generated profit in the short term.

 

One of the study’s authors, Gain Theory’s Matthew Chappell, hopes the findings will help marketers make a more informed choice when investing their marketing spend.

 

“In a world of big data and advanced analytics, the lure of the easily accessible stat or number can be overwhelming.”

 

“Too often the easy measures are skewed towards the short term. One of the key aims of this study is to provide something of a correction: to move thinking and measurement from short to long term, to focus on what drives fundamental business success, and to give marketers the tools to do so.” – Matthew Chappell

 

Chappell’s sentiment was backed by Thinkbox’s Director of Research and Planning, Matt Hill –

 

“This study by two highly respected, independent organisations with robust data at their disposal bridges the gap between the marketing and finance departments with compelling evidence that quantifies advertising’s ability to deliver shareholder value, and TV’s centrality to that.”

 

 

Want to discover what TV Advertising could do for your business? Feel free to get in touch with The Living Room today for friendly and expert advice.