ROI of TV advertising
Nearly 80% of advertisers say traditional television advertising has become less effective. However, 50% of U.S. adult Internet users say TV captures their interest most effectively. Is TV’s ROI waxing or waning?
It’s still a powerful platform due to the latest advertising technology over connected TV. Business leveraging data driving adverting strategy for the connected TVs and OTT.
Here’s what 9 experts say is the ROI of TV advertising.
1. Accenture
TV generates two to four times greater brand ROI than high-growth media channels such as Social Media and Short Form Video. It’s nearly equal to Paid Search in its average Purchase Intent ROI. 83 percent greater return than the average return of all media channels. This unexpected finding counters conventional wisdom that TV’s strength is mostly in impacting Brand Awareness and Ad Awareness. And comparatively weaker in actual buying behavior.
2. Chief Marketer
ROI can be simply calculated mathematically by dividing the gross sales margin with the ad campaign cost. A well-run TV ad campaign should produce between 300 and 500 percent ROI.
3. Meredith on ROI of TV advertising
Television ads can also help increase the effectiveness of many other types of ad campaigns. Removing television from the advertising campaign, on the other hand, can decrease overall ROI from the campaign as a whole by as much as 18%.
4. Bearing Point
Firstly, TV distinguishes itself by the largest contribution to sales. It accounts for about 2/3 (65%) of the effects of media on sales. Secondly, television boosts the effectiveness of other media levers. On average, television increases the effectiveness of other media by 25%. This increases the initial investment which is already very high.
5. Statista
Based on data collected by Statista, for each dollar invested in TV advertising, 6.5 dollars was earned.
6. Digiday on ROI of TV advertising
TV accounts for 18 percent of the ROI from digital channels in this study. A conservative estimate according to Digiday
7. Kellogg
According to a Kellogg study, the return on investment for TV ads is dismal.
Anna Tuchman, associate professor of marketing at Kellogg, and her collaborators analyzed the effect of TV commercials on sales for more than 200 consumer packaged goods, including food, drinks, and basic household products. The researchers found that the ads had a much smaller impact on sales than previous studies had estimated. For many products, the return on investment (ROI) was negative: the companies had spent more on commercials than they earned back in additional sales. “It looks like the vast majority of firms are over advertising or spending too much on advertising,” Tuchman says.
8. Marketing Charts
1 in 3 companies surveyed believe that TV gives them the best ROI in comparison to other advertising types. By comparison, a similar 28% feel that TV gives them a lower ROI than other channels.
Nevertheless, consumers feel that TV ads have a strong influence on their purchases. Indeed, primary research conducted by MarketingCharts finds that TV ads influence the purchases of more US adults than any other paid media. Moreover, more adults report noticing specific advertisers on TV than on any other advertising channel.
9. Think TV on ROI of TV advertising
Multiplatform TV advertising amplifies search, display, and short-form video ad performance. The study finds that TV lifts Digital ROI by 22%, and that Digital’s average ROI would decline -18% without the benefits of multiplatform video. If more than 4% of TV spend is reallocated to search, display and short-form video, total ROI and brand sales are put at risk.
Experts vary on the ROI of TV advertising. But most agree it generates an ROI and provides a lift to other media channels.
Do these experts help you understand the ROI of TV advertising?
