Despite verifiable proof of TV’s continued advertising efficacy, a new study says a variety of factors including industry practices and enduring misconceptions about time spent with the medium continue to hinder its growth in Canada.
Conducted by MediaCom Canada’s Business Science unit on behalf of the industry association Thinktv (formerly the Television Bureau of Canada), the study – Missed Opportunities in Media Planning (and the case for ROI) – analyzed 50 companies in 10 key advertising categories including financial services, automotive, CPG, entertainment and electronics, all of which had “significant” media investment between 2011 and 2015.
The study discovered a “direct correlation” between increased TV spend and above-average revenue growth.
The study found the 29 companies whose TV spend was flat or increased less than 30% experienced revenue growth of just 9% over the five-year period, whereas the 21 companies that increased their TV investment by more than 30% saw revenues increase by an average of 21%.
In addition, companies that boosted their TV investment by an average of 40% – a diverse group that included a quick-service restaurant company, a bank, an automotive manufacturer and an online travel company – saw revenues increase by an average of 27%.
Among the study’s other findings:
TV and digital are interdependent
The study also revealed that TV investment has a direct association with brand consideration and online activity.
When a consumer electronics company stopped spending on TV to focus on lower-funnel digital activity, its brand equity was considerably diminished – with a 50% dip in branded search terms.
Decreased TV spend also led to increased cost-per-acquisition in paid digital media, requiring the brand to re-invest in TV in order to rescale and lower its cost per customer acquisition.
TV significantly drives the performance of digital media
While acknowledging that multi-screening is prevalent among TV viewers, particularly among younger adults, the study found it represents an opportunity to integrate and sync television with digital platforms.
It said the increased use of hashtags to drive social engagement, combined with the smarter use of calls to action driving viewers online, are responsible for driving better performance for both TV and digital media campaigns.
While running a TV ad increases brand search, competitor advertising can also drive an increase in overall category searches. In 2015, for example, a Canadian travel brand experienced a 35% increase in its own branded search that stemmed from a competitor’s TV ad.
The study concluded that consumers take action when prompted, with the right call-to-action potentially leading to a “significant uplift” in sales. A Canadian pizza brand, for example, achieved a year-over-year sales increase of $2 million by adding a call to action for online orders on its TV advertising.
The report noted that time spent with digital has been largely accretive rather than cannibalizing TV audiences, with TV viewing remaining “remarkably stable” over the past decade – falling to 28.6 hours per week in fall 2015 from 29.9 hours per week in 2006. In the same time period, time spent with the internet has skyrocketed from 10.1 to 19.1 hours per week.
It also notes that in addition to being popular among adults 18+, TV is also the leading medium for millennials, who spend four times as many hours watching linear TV – 19.1 hours per week – as they do on Facebook (four hours), Instagram (0.4 hours) and Twitter (0.1 hours) combined.
The study argued that advertisers were over-reliant on data sources such as ComScore, Nielsen and Vividata, which help them understand the media consumption habits of a specific target, but fail to measure ROI.
“Relying on these tools fosters a focus on delivering on the number of ad impressions and views, instead of a focus on the quality and ROI of that reach,” the study concluded. “Planners and agencies are held accountable for generating revenues for brands, but have limited access to their clients’ sales data.”
The study said restricted access to this information is one of the biggest hurdles in planning towards an ROI outcome, and argued that the industry needs to shift from delivery metrics like GRPs and click-through rates to outcome metrics like sales and customer acquisitions.
It said digital vendors like Facebook and Google were able to influence media buyers by “actively presenting” proprietary audience data about usage and engagement. However, it cautioned that characterizing web metrics as valuable outcomes (and not just delivery measurements) enable these companies to shift the focus away from the sales and revenue outcome metrics critical to ROI delivery.
