Thursday 22 August 2019

TV tops for ad-generated profits

Tuesday was World Television Day. The day was marked by a host of international industry bodies celebrating the trustworthiness of TV and lauding how it
Tuesday was World Television Day. The day was marked by a host of international industry bodies celebrating the trustworthiness of TV and lauding how it "nurtures education, continually invites people to explore beyond their living rooms and arouses curiosity". Stock photo
Steve Dempsey

Steve Dempsey

Tuesday was World Television Day. Why TV needs an annual celebration on a particular day is beyond me, but the UN thought it was warranted and November 21 got the nod. The day was marked by a host of international industry bodies celebrating the trustworthiness of TV and lauding how it "nurtures education, continually invites people to explore beyond their living rooms and arouses curiosity".

But perhaps the greatest endorsement came from Thinkbox, the UK marketing body for commercial TV. Its recent study on ad effectiveness shows TV still offers advertisers a better bang for their buck than any other medium. The comprehensive study found that every £1 spent on TV advertising, delivered £4.20 of profit over three years.

This far exceeded the performance of other media. Every £1 spent on print yielded £2.43, online video delivered £2.35, radio £2.09, out of home £1.15, and £0.84 for online display advertising.

Matt Hill, Thinkbox's research and planning director, sees the research as more than just a reminder of the power of TV, but also a call to arms for advertisers to see advertising as an investment, not a cost.

"From an advertiser's point of view this is incredibly robust, far-reaching evidence of the role that advertising plays in business growth and profitability," Hill says.

"This research doesn't give specific advertisers a silver bullet to go to their finance departments and say 'Here's the answer, this is what we need to do', but it does provide them with substantial evidence of the average return that is generated and the impact that advertising has over the short term and the long term."

It's no harm that TV ads were found to create 71pc of advertising-generated profit; 70pc of TV campaigns delivered a profitable return in the short term and 86pc in the longer term. But hold on, isn't television supposed to be on its last legs? Aren't we all now glued to YouTube, Hulu, Netflix, Roku and Amazon Prime? How then can TV be holding its own in terms of advertising? According to Hill, media types aren't representative of the overall population in terms of their own media consumption habits, and this can sometimes cloud their thinking.

"The vast majority of the people who work in the media and advertising are under 40," Hill says. "And even within this these young planners and young buyers are not representative of the population.

"It's incredibly natural for us to look at our own behaviour, and that of our peers, and assume that this is happening everywhere. But the number one rule of good marketing is being market-oriented.

"That means recognising that as soon as you start working for an advertiser, media agency or creative agency that you cannot base any planning on your intuition or what you feel is right through your own behaviour.

"You absolutely need to use robust industry-representative data."

International trends do seem to show that live TV is holding pretty steady, despite the growth in new methods of media consumption. According to Nielsen's Total Audience Report, for example, US adults spent three hours and 55 minutes a day looking at live TV in Q2 2017. This is down from four hours 11 minutes in Q2 of 2015. It's hardly a mass exodus. But time spent on smartphones has risen in the same period from one hour and nine minutes to a hefty two hours and 27 minutes. Hill feels that audio visual content, whether on a flatscreen or a phone, holds some similarities for advertisers.

"From a long-term point of view audio visual is the best way to build an emotional connection," Hill says, "because it allows you to tell a story. We think online video performed very well in the long term multipliers.

"But sometimes its really powerful and sometimes its not. The difference is down to hygiene factors. Was the ad viewed all the way through? Was the sound on? Was it an ad that was full screen in high-quality content, or half screen beside a cat on a skateboard?"

Hill is understandably confident about more traditional forms of advertising; TV naturally, but also print. "It's really interesting to see the continued importance of print," he says.

"Between TV and print, you're talking about 90pc of all profit generated by advertising. For me, that shows that the fundamentals of marketing haven't changed. You still need paid-for-media and you still need scale and you still need to have your ads seen in the right environment."

Sunday Indo Business

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