The Profit Ability of TV – TV delivers 71% of the total profit generated by advertising, at the greatest efficiency (a profit ROI of £4.20), and for the least risk
Delving deeper into the short and long termism of TV, a recent study from Thinkbox considered the short and long-term returns from TV and how they compare with other channels in terms of risk, scalability and return on investment (ROI). Key points from the study include the below:
• 58% of advertising’s profit return is overlooked when ignoring the long-term
• Advertising pays back in the short-term: across all sectors and channels the average short-term profit return delivered by advertising is £1.51
• TV delivers strong ROI for all sectors: The average short-term profit ROI for TV is £1.73 per pound spent, which is remarkably consistent with TV ROIs over the last decade
• TV delivers the scale of return: it drives the most profit because its scale and popularity enable it to deliver efficient profit return at high volumes of spend. Businesses can increase investment in TV to a higher level than other media and it will continue to generate a profitable return before diminishing returns kick in
All Response Media viewpoint
We know from experience, and especially with new advertisers, that the short-term effect is what keeps people interested and people need to see immediate results in the current economic climate. However, we know that results are not always immediately obvious and require a deep dive to see true effect.
It is imperative to measure every aspect of a TV campaign’s performance, whether it is short-term spot attribution using ARMalytics®, or long-term effects through hourly or daily econometrics by our team of econometricians. We ensure that all our clients get a fully rounded view of all the effects of TV advertising.