57 THE VOD FILES Advertising
TV delivers 71% of advertising-generated profit
Bubble size represents % of total profit Total profit = all return (short + long-term generated over 3 years
TV: 71%
Print: 18%
Online video: 4%
Radio: 3%
OOH: 3%
BREAK EVEN
Online display: 1%
Source: ‘Profit Ability: the business case for advertising’. Nov 2017 Ebiquity ROI campaign database (Feb’14-May’17) & Gain Theory. Campaign obs: 1,954
NB: Online video includes broadcaster VOD, YouTube, Facebook, video & online programmatic video
MacGillivray. Thinkbox is the marketing body for commercial TV in the UK, in all its forms. “Thinkbox’s Profit Ability study proved that TV delivers 71% of all advertising-generated profit, with other media working hard to deliver the balance. This illustrates that effective advertising campaigns use an optimal mix of channels, not just one, and also optimise their brand building and activation activities to drive both short-term sales and long-term growth.” CHOOSING CHANNELS There is general agreement about the need for a digital/TV split in advertising strategy. But what are the pros and cons of each? UKTV’s Goldman observes that television is a reach media. If an advertiser wants to influence many people quickly, it is by far the most effective medium. “There are a good many reasons why TV is great. All content is professionally produced, thus creating a compelling and engaging advertising environment. In addition, all content and adverts are
regulated and complied. Advertisers spend millions of pounds on creating beautifully crafted messages in their ads – on TV it’s viewed on a full screen, with sound. And it has been possible to target sub- demographic audiences for years. Using BARB (Broadcasters’ Audience Research Board) data, it’s possible to target well over 50, if not 100s of audiences. It is also possible to dynamically insert ads in linear TV, as well as to use first-party broadcaster data to target ads in VOD. In short, TV is now every bit as sophisticated as online in terms of targeting.” Craig Buckland of BTS agrees that getting the targeting right is important and that digital advertising offers the opportunity to personalise the messages being served. “There has been a lot of research that shows that personalised ads improve engagement quite substantially.” Digital advertising allows much more insight into engagement with commercials, but also, more importantly, how many people clicked through and made a purchase as a result. “That benefit
is simply not possible in the same way with TV advertising,” says Buckland. “You’re able to really target a specific audience,” adds Amber Vellacott, “unlike TV where it can be quite broad unless you’re using the likes of Sky AdSmart – but even that’s limited to households. Digital gives advertising space for all business types, not just those that can afford to produce swanky videos for TV. I would say that the proportion of those with access to digital is now much higher than those with access to TV. And if you’re going to advertise your product or service, you want to advertise it in a place where people are, right?” Thinkbox’s MacGillivray comes to the defence of television, saying that most advertising channels boost the efficiency of others, even if the scale and consistency of the effect differs significantly. “TV generates the highest ‘multiplier effect,’ boosting the performance of other media channels used in a campaign by up to 54%, compared to around 8% across all other channels. In fact, marketing effectiveness experts Les Binet and Peter Field have shown that the rise of other online media has helped make TV even more effective over time, as the demand generated by TV can now be easily acted upon by ubiquitous connected devices.” One argument often used against television is the fact that programmes can be recorded, providing the capability of ‘fast-forwarding’ through the commercials.
ACCORDING TO ONE SURVEY, 66.8%OF US MEDIA AD BUDGETSWILL BE DIGITAL BY 2023. IN ASIA PACIFIC, AS MUCH OF 76%OF ALL ADSPENDWILL BEDIGITAL
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