'Payback 4: Pathways to Profit' by Ebiquity for Thinkbox - an advertising effectiveness study
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Payback 4: pathways to profit
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‘Payback 4: pathways to profit’ (2014) is an econometric analysis by Ebiquity for Thinkbox of over 4,500 ad campaigns across 10 advertising sectors between 2008 and 2014. It compared, on a like-for-like basis, the sales and profit impact of five forms of advertising: TV (linear spot and sponsorship), radio, press, online display (excluding video on demand) and outdoor. The study is an update on Ebiquity’s previous effectiveness study for Thinkbox, Payback 3, which was published in 2011. Payback 4 found that TV advertising remains the most effective form of advertising and creates the most profit for businesses pound for pound. The study found that TV gave an average return of £1.79 for every £1 invested during 2011-14. This is up from £1.70 for every £1 invested during 2008-11. It also found that TV consistently demonstrated the highest return on investment (ROI) of any form of advertising over the last 7 years, a period of economic recession and major upheaval in media technology and consumption.
Transcript of 'Payback 4: Pathways to Profit' by Ebiquity for Thinkbox - an advertising effectiveness study
Payback 4: pathways to profit
Why Payback 4?
01 An update on TV effectiveness
02 Post-recession comparison
03 A view on TV sponsorship
What is Payback?
10 categories
100+ advertisers
Representing £2bn TV adspend
4,500 econometric models
Independent econometric study
TV profit ROI has increased in the last three years
Pro
fit R
OI
2008-2011 2011-2014£0.00
£0.20
£0.40
£0.60
£0.80
£1.00
£1.20
£1.40
£1.60
£1.80 £1.70£1.79
Source: Ebiquity database 2008-2014; TV
Sales uplift per TV rating point is slightly up
Effe
ctiv
ene
ss I
ndex
*P
re-2
008
Inde
x =
10
0
2008-2011 2011-20140%
20%
40%
60%
80%
100%100.0% 102.5%
*Effectiveness Index = ‘normalised’ sales uplift per 100 TVRs. Average sales uplift per 100 TVRs 2008-11 normalised to 100%
Source: Ebiquity database 2008-2014; TV
TV is the lead effectiveness medium
TV Press Radio Online Display Out of Home0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%100%
52%
27%
13% 11%
Twice as effective ‘per impact’ as any other medium
Source: Ebiquity database 2011-2014
Effe
ctiv
ene
ss I
ndex
TV
Ind
ex =
100
TV advertising generates the most profit
TV Radio Press Online display Out of Home£0.00
£0.20
£0.40
£0.60
£0.80
£1.00
£1.20
£1.40
£1.60
£1.80
£2.00
£1.79 £1.52 £1.48
£0.91
£0.37
2011-2014
2008-2011
Pro
fit R
OI
Source: Ebiquity database 2008-2011 & 2011-2014
TV delivers a significant ‘halo effect’
37% of TV’s total sales effect is transferred to other brands within the portfolio
TV profit ROI by sector
Retail Financial services FMCG
£2.87+11%(versus pre-2011)
£2.48+3%(versus pre-2011)
£0.63+5%(versus pre-2011)
Retail: strong payback across all media lines
Retail
TV Press Radio Online Display
£0.00
£0.50
£1.00
£1.50
£2.00
£2.50
£3.00
£2.87 £2.65 £2.54
£1.85
2011-20142008-2011
Pro
fit R
OI
Current share of spend in TV c. 49%* Optimal average spend share=60%
Source: Ebiquity database 2008-2011 & 2011-2014 *Average TV % spend relative to Print, Radio, Outdoor, Online Display. Does not include Search and DD/DM
Financial Services: TV leads the way
Financial Services
TV Radio Press Online Display
OOH£0.00
£0.50
£1.00
£1.50
£2.00
£2.50
£3.00
£2.48£1.95
£1.31 £1.18£0.82
2011-2014
2008-2011
Pro
fit R
OI
Current share of spend in TV c. 52%* Optimal average spend share=60%
Source: Ebiquity database 2008-2011 & 2011-2014 *Average TV % spend relative to Print, Radio, Outdoor, Online Display. Does not include Search and DD/DM
FMCG: is all about TV
FMCG
TV Radio Press OOH Online Display
£0.00
£0.10
£0.20
£0.30
£0.40
£0.50
£0.60
£0.70
£0.63
£0.24 £0.20 £0.18 £0.15
2011-20142008-2011
Pro
fit R
OI
Current share of spend in TV c. 76%* Optimal average spend share=100%
Source: Ebiquity database 2008-2011 & 2011-2014 *Average TV % spend relative to Print, Radio, Outdoor, Online Display. Does not include Search and DD/DM
TV advertising boosts other media
Reactive Interactive Active
TV is a multiplier of other awareness building channels
TV to radio is strongest and can be >100%
TV to press and OOH can be up to 50%
Branded search is 33% more responsive to TV in 2011-2014
TV to generic search on average +5% shift in conversion per 100 TVRs
TV helps drive significantly greater promotional effectiveness
Observed multiplier effects up to 100%
Call-to-online action continues to increase in TV ads
2005 2006 2007 2008 2009 2010 2011 2012 20130
50
100
150
200
250
300
No.
bra
nds
with
onl
ine
call-
to-a
ctio
n in
TV
ad
Source: Ebiquity Portfolio, 2005-2014 from all TV ads tracked across 1100 brands
TV sponsorship works as a medium in its own right
TV sponsorship profit ROI is second to TV spot
…a word from our sponsor
Source: Ebiquity Database 2008-2014. Base: Retail & FMCG categories only
Pro
fit R
OI
TV Spot TV Spon Press Radio OOH£0.00
£0.20
£0.40
£0.60
£0.80
£1.00
£1.20
£1.40
£1.60
£1.51
£0.87£0.70 £0.65
£0.50
Based on limited sample of Retail and FMCG brands only
Payback 4: the key findings
TV remains the most effective form of advertising, generating the most profit pound for pound
TV delivers a significant ‘halo effect’
Optimum TV spend is 60% and above for major categories within the study
TV advertising boosts other media
TV sponsorship works as a medium in its own right
