Our last blog post explored the evidence showing that Conventional TV advertising sales in Canada are stalling. Advertisers are increasingly turning to Specialty TV and digital video ads, which offer better audience targeting and ROI measurement capabilities.
But the question remains: are TV ad sales stalling for a good reason, or are advertisers actually missing out on a golden opportunity?
A new whitepaper created by Business Science (a division of MediaCom Canada) and commissioned by thinkTV revealed the findings of a review of 50 companies that had significant media spending budgets over the 2011-2015 period – the same period in which we have seen steady declines in Conventional TV ad spending.
The white paper revealed a truth that counters the common narrative: there is a direct correlation between TV investment and key financial indicators of business growth.
Specifically, the white paper showed that:
- TV advertising is a driver of both long- and short-term customer acquisitions and sales.
- TV and digital advertising are interdependent.
- Marketers should focus on outcomes rather than delivery metrics to drive a meaningful ROI.
There’s more on each point below:
1. TV Spending and Business Growth
According to the white paper, companies that increased TV spending by more than 30% over the period saw an average revenue increase of 21%, while companies that increased TV spending by less than 30% saw an average revenue increase of just 9%. Furthermore, companies that increased TV spending by more than 40% saw an even greater 27% average increase in revenue.
The researchers also noticed that companies that increased TV spending in 2014 saw an increase in short-term and baseline sales in the following year. One company that increased TV spending by 50% in 2014 saw a 21% increase in short-term sales, and in the following year an 8% increase in baseline sales.
2. TV-Digital Interdependency
As an example, one of the companies in the study decreased TV spending to focus on lower funnel digital ad spending (a conversion-focused strategy). What they experienced was a 50% decrease in branded search terms, resulting in far lower organic website visits. As a result, this company’s cost-per-acquisition in paid digital media went up appreciably. They decided to rethink their strategy and return to TV advertisements.
3. Key Takeaways for Marketers
Among marketers, there’s a tendency to equate digital impressions with TV impressions, but this is a mistake. They’re both very different and therefore need to be valued differently. Rather than comparing digital and TV ads based on the number of impressions each receives, marketers should focus on outcome-related metrics like transactions, customer acquisitions, average order value, lifetime values, and customer segment values.
At Media-Corps, we’re specialists in multi-attribution analysis, which means that we can analyze the impact that TV spending has on the ROI of ads on other media channels. With our data-driven approach, it’s possible to accurately measure the ROI of your TV spending. We can also show you how to ensure that your TV ads complement your digital advertising efforts and multiply the impact of your advertising dollars.