New research from the marketing effectiveness groups, Gain Theory, MediaCom, and Wavemaker, has found that television advertising is the “least risky” form of advertising available for today’s businesses, according to an article in Marketing Week.
The study was carried out for Thinkbox, a marketing research body for commercial television in the UK. Thinkbox is the primary marketing body for several UK-based TV companies, including broadcasters such as Channel 4, Sky Media, and ITV.
While the study’s backer might raise questions about its findings, it also highlights some useful data about how television advertising compares to online display advertising, radio advertising, and search-based ad campaigns.
Interestingly, the study didn’t find that TV advertising was the most effective form of advertising out of the options compared — that goes to print, which offered the highest ROI. However, it did find that the level of variance is smaller with TV advertising than with other channels.
In simple terms, this means that TV advertisers were more likely to achieve the median ROI, or close to the median ROI than an unusually high or low return on investment.
Both linear TV advertising and video-on-demand delivered an average variance of around 20%, compared to 90% variance for print advertising. Other forms of advertising with relatively limited variation included online video, which was less than 30%, and organic search, at less than 50%.
The researchers also found that TV produces a “multiplier effect” — an effect in which the other channels used to market a product or service performed better when combined with TV than on their own.
This so-called multiplier effect is a known factor in the world of marketing, with top-rated research and advisory companies such as Gartner highlighting it as one of several strategies brands can use to amplify their messaging.
TV advertising’s multiplier effect varied from channel to channel, with cinema-based advertising performing up to 54% better when combined with TV, versus a 24% boost to video-on-demand and outdoor advertising.
On average, TV-based advertising produced an average multiplier effect of 8% across all other channels.
The study drew its data from more than £1.4 billion spent on advertising by 50 brands, with ten different forms of advertising researched and compared. The researchers assess three years of advertising campaigns to prepare the study’s findings.
Despite the study’s findings, relatively few advertisers are increasing their television advertising spend despite relatively stable consumer spending.
Data from Statistica indicates that spending on TV ads has just been steady in Western Europe over the past five years, with relatively little change. In North America, spending on TV ads has declined from approximately $70 billion in 2018 to a projected $69 billion in 2019.
Meanwhile, the amount spent on online advertising, which allows brands to track their results far more efficiently, has increased significantly over the past decade, with an estimated growth of more than 13% in 2017 alone.
Like print-based advertising, online advertising offers several advantages over broadcast TV. As it’s entirely digital, it’s easier for advertisers to track their results, allowing a more precise value to be applied to each impression or ad click.
Online advertising also allows a higher level of granularity than TV, with TV primarily built around extensive, broad audience profiles.
However, advertisers with considerable audiences may not experience the same large-scale return on investment from online advertising as they would from TV — an issue highlighted by the high level of variance in performances for online display, search, and social media advertising in the study.
Of these three channels, social media advertising had by far the highest level of variance, with a more than 70% variance between the best-performing and worst-performing campaigns.
Organic search and online display fared slightly better, with a level of variance somewhat above the 40% mark for search and marginally more than 60% for online display.
For marketers, it’s a lesson in the importance of carefully monitoring and optimizing their online ad campaigns. While online advertising can offer incredibly return on investment, it requires an extremely focused, granular approach to reap its full benefits.
Understandably, this may not appeal to every marketer. For those in need of a safer, less risky option, as the report states, there’s always TV.