TV EFFECTIVENESS A review of local and international research exploring the power of TV advertising

Introduction Television has always been the best way for advertisers to launch new products, to grow brands and to drive sales. But with new technologies and more media options for consumers than ever before, is television advertising still effective? A review of research studies from Australia and around the world confirms that television advertising is as effective and as relevant today as ever. What’s more, TV continues to deliver the greatest profit to advertisers.

Contents This document is divided into two sections: 1) Why TV Works explores just some of the reasons why Television is so effective and 2) Results & ROI demonstrates the business outcomes that can be achieved with Television.

Why TV Works Preferred source of entertainment Time spent watching screens Reach and scale Advertising receptivity Advertising attention by screen Ad engagement Trustworthiness Emotional response to advertising Talkability Impact of second screens Advertising’s influence Response to advertising

Results & ROI Page Page Page Page Page Page Page Page Page Page Page Page

5 6 7 9 10 11 12 13 15 17 19 20

Return on investment Sales uplift per exposure Sales by category Short to medium term response Impact of emotional ads Cost efficiency Impact on business results Direct impact on other channels Impact on search and online Amplification effects Impact long term TV effectiveness over time

Page Page Page Page Page Page Page Page Page Page Page Page

22 23 24 25 26 27 29 30 31 33 34 36

WHY TV WORKS

Page 5

People love their TV

Preferred Source of Entertainment 60%

60%

25%

RESULTS & ROI

15%

24%

17% 8%

Watching television

Listening to radio

Reading newspaper

Going to the movies

Reading magazines

Playing video games

Source: Deloitte Media Consumer Survey 2015, n=2000+ Australians, preferred sources of entertainment, reading books/listening to music and attending live performances not charted.

WHY TV WORKS

Television advertising works because people love watching TV. A Deloitte survey of more than 2,000 Australians shows that watching television is one of Australians’ preferred sources of entertainment.

Use internet for social/email

People spend more time watching TV

Time Spent Watching Broadcast TV on TV and Time Spent Watching Content – Including TV, Movies, YouTube Videos etc – On Other Devices

87.8%

Laptop/PC

2.7%

Smartphone

Source: Australian Multi-Screen Report Q3 2015 (published Dec 2015).

2.0% Tablet

RESULTS & ROI

7.5%

watching Broadcast TV on a TV set

Australians spend more time watching Broadcast TV on a TV than they do watching all other content on all other screens combined.

WHY TV WORKS

Australians love their TV and so they spend a lot of time watching it. While people consume TV and other content across a range of screens, people spend significantly more time – 87.8% of their total screen-time - watching Broadcast TV on a TV.

Page 6

TV delivers advertisers unbeatable scale

Page 7

In an increasingly fragmenting environment, reach has never been more important.

PEOPLE ACROSS AUSTRALIA

WATCH COMMERCIAL TV ON THEIR TV SETS EVERY DAY

WHY TV WORKS

15 MILLION

“The audience scale and reach of TV advertising continues to be of value to advertisers in spite of – and perhaps because of – the increasingly fragmented media landscape.”

Deloitte

RESULTS & ROI

Source: 15 million reach figure is sourced OzTAM and RegionalTAM data, 5 cap cities, 5 aggregated markets, average daily reach, total commercial TV, metro and regional figures are combined to form a national estimate, 1 January to 31 December 2015, consolidated data; quote sourced Deloitte Media Consumer Survey 2015.

Page 8

TV reaches more consumers

Cumulative Weekly Reach – Commercial TV

Ppl 18-24

Ppl 25-39

Ppl 40-54

Metro: 82.0% Regional: 82.9%

Metro: 90.7% Regional: 90.4%

Ppl 55+

GBs w/ Kids

Total People

Metro: 90.3% Regional: 88.1%

Metro 85.2% Regional: 84.3%

Source: OzTAM and RegionalTAM, 5 cap cities, 5 aggregated regional markets, 1 January – 31 December 2015, 2am – 2am, average weekly cumulative reach, total commercial TV, regional excludes spill, consolidated data.

RESULTS & ROI

Metro: 70.6% Regional: 64.9%

Metro: 93.1% Regional: 91.3%

WHY TV WORKS

Advertisers know that in order to grow their brands they need to get their message to as many people as possible. No other medium compares to the scale and reach of commercial TV. TV consistently reaches more people across all key buying demographics.

People are more receptive to ads on TV

Receptivity To Advertising By Medium 40.3%

Television

Radio

11.4% Newspaper

Source: BBM Analytics Canada, Ad Receptivity Survey 2014 , Adults 18+.

3.7% Magazine

11.9% Internet

RESULTS & ROI

14.1%

WHY TV WORKS

BBM Analytics conducted a survey amongst Canadian consumers to determine the appeal of advertising on different platforms. The research revealed that people not only pay the most attention to TV ads, but they are also far more receptive to the ads they see on television.

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8.2% Out of home

Ads on a TV command more attention

Advertising Attention By Screen 62%

37%

Laptop

31%

Tablet

Mobile

Source: Millward Brown AdReaction 2014; ‘How attentive are people to ads on each screen’, Australian multi-screen users.

RESULTS & ROI

Television

33%

Viewability counts! Ads on TV are 100% viewable, for 100% of the ad. Online video impressions are mostly defined as 50% of pixels viewable for just one or two seconds.

WHY TV WORKS

So how do ads on TV compare to ads in other screen environments? Millward Brown’s Ad Reaction study found that Australian multi-screen users pay more attention to the ads they see on a TV than on any other screen.

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TV ads 4x more engaging than Facebook

Page 11

Most Likely To Try Or Buy Target Brands After Seeing Advertisement

25%

Television

9%

Source: Innerscope Research 2015, biometric monitoring, eye tracking and traditional survey methods, n=390 consumers aged 18 to 34 years.

47% of consumers say they immediately skip or ignore a video ad on Facebook.

RESULTS & ROI

Facebook

WHY TV WORKS

Recent biometric research shows that TV commercials are 4 times more engaging than video ads on Facebook, leading to Higher Brand Recall and Purchase Intent. The Innerscope study found that consumers have higher visual attention with final branding moments and brand logos with TV advertising, than those viewed online as pre-roll on any device.

People trust the TV environment

Most Trustworthy Advertising Medium

Source: Ipsos Media CT/Thinkbox TV Nation 2014. Base: all adults 15+. Question: ‘In which, if any, of the following places are you most likely to find advertising that you trust?, Nielsen Global Trust in Advertising September 2015.

RESULTS & ROI

Ipsos found that trust in TV was not only much higher than any other medium, TV’s trustworthiness is actually increasing – growing 5 percentage points since 2012.

WHY TV WORKS

Consumers consistently rate TV as the most trusted form of advertising. An Ipsos survey of UK consumers found that ads on TV are by far the the most trusted form of advertising. And Nielsen’s recent Trust in Advertising global survey shows TV ads are the most trusted at 63%.

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TV ads evoke emotion

Advertising’s Ability to Evoke Emotion By Medium 77%

TV

8%

8%

6%

6%

Radio

Newspapers

Mags

Internet

Source: Ipsos MediaCT/Thinkbox TV Nation 2014. Base: all adults 15+.

RESULTS & ROI

TV’s emotive power of moving images and sound means consumers are more likely to engage with your brand and remember you.

WHY TV WORKS

TV commercials are by far the most likely to make people feel emotion which research shows is an incredibly effective response to advertising. 77% of those surveyed in an Ipsos study said that TV ads are most likely to make them laugh, cry or feel emotional.

TV ads drive emotional brand connections

Source: Warc “TV ads deliver emotional connections” 24 January 2014

RESULTS & ROI

The power of storytelling through TV advertising helps create that all-important emotional connection that drives engagement and brand loyalty.

WHY TV WORKS

Television ads play a vital role in delivering messages to consumers as they prompt strong, immersive emotional connections. According to a study published in the Journal of Advertising Research, brand advertising is far more emotionally engaging when experienced on TV either alone or in combination with online viewing.

Page 14

Page 15

TV ads are the most talked about Advertising Talkability By Medium 58%

WHY TV WORKS

If you want people to talk about your brand, TV ads are your best bet. Ads on television are most likely to drive conversation - either face-to-face, via phone, or through email/social media - proving the powerful water cooler effect of television exists both offline and online.

Face to face / on the phone Online

10%

11%

9% 4%

TV

Social

Newspapers

8%

8%

Websites

8%

5%

Online search

5%

3%

Radio

4%

3%

Magazines

Source: Ipsos Media CT/Thinkbox TV Nation 2014. Base: all adults 15+. Question: On which medium are you likely to find advertising that you talk about either face to face or over the phone / online?

3%

2%

Out of home

RESULTS & ROI

28%

Page 16

TV is the social media

Source: Spotlight on Social TV, November 2014, conducted by Network Ten and Research Now, online survey of 1,067 social media users, cap cities.

RESULTS & ROI

Almost 1 in 3 social media users talk about Television on at least a weekly basis.

WHY TV WORKS

When Australian social media users were asked how often they make comments about TV on social media, an overwhelming 29 percent said they did once or more times a week, with a further 8 percent commenting every day or almost every day. This daily social media engagement with TV provides a huge opportunity for advertisers to truly connect with their audiences and turn TV viewers into social ambassadors for their brands.

TV drives engagement with brands

Source: Deloitte Media Consumer Survey 2015; Neuro-Insight Study “Re-socialisation of TV” for Seven Network and MEC, engagement in program.

RESULTS & ROI

A Neuro-Insight study also found that interacting with social media while watching TV drives a 9% increase in engagement and a 26% cumulative increase in engagement.

WHY TV WORKS

New technologies are providing a forum for discussion about what viewers are watching on TV and allows them to search and purchase brands all without leaving the couch. Deloitte found that 25% of Australian multi-taskers actively engage in activities that directly relate to what they are watching and 1 in 5 browse for products and services online while watching television.

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TV is the new shopfront

WHY TV WORKS

A recent study “Television Advertising and Online Shopping” concludes that the second screen puts a virtual store in every consumer's pocket. The study revealed that multi-screen users visit, browse and buy advertised products within moments of seeing a commercial on TV.

Page 18

RESULTS & ROI

Source: Television Advertising and Online Shopping 2015, Science Daily.

TV advertising has the greatest influence

Page 19

Most Important Influencers On Buying Decisions 63%

47%

46%

42%

38%

38%

37% 31%

Television

Cinema

Prod P'ment

News

Mags

Brand EDMs

Radio

Outdoor

Source: Deloitte Media Consumer Survey 2015; n=2000+ Australians, Q: “To what degree do the following influence your buying decisions?” chart includes top ten advertising influences.

Social

27%

Games

RESULTS & ROI

41%

WHY TV WORKS

Australians nominate TV advertising as the medium that works better than any other at influencing their behaviour and purchasing decisions. A 2015 Deloitte study found that 63% of Australians nominate TV advertising as the biggest influence on their decision to purchase goods and services.

Page 20

TV is the ultimate response medium

63

Ads on TV

58

Ads in newspapers

52

Ads in magazines

48

Ads on radio

45

TV product placements Billboard/outdoor ads Ads served in search

34

Ads on social networks Ads on mobile devices Online banner ads

31 30 30

Source: Nielsen Global Trust In Advertising Survey Q1, 2015; “To what extent do you take action on the following forms of advertising?”, paid media.

RESULTS & ROI

41 41 40

Ads before movies

Online video ads

WHY TV WORKS

TV advertising is the best medium for driving an action. A recent Nielsen survey shows more than six in ten online Australians take action (do something) as a result of an ad seen on TV, making TV the most powerful advertising platform to drive a consumer response. .Response to Advertising Platforms – Sometimes or Always Take Action

RESULTS & ROI

TV ads generate the most profit

Page 22

Return on Investment – Ebiquity Database £1.79 £1.52

£1.48

£0.37

Radio

Press

Online Display

Source: Payback 4: Pathways to Profit, Ebiquity UK database 2011-2014 (analysis based on 10 advertising categories, 100 advertisers).

Out of Home

RESULTS & ROI

£0.91

Television

WHY TV WORKS

In one of the most robust studies of its kind, Ebiquity in the UK found that TV advertising creates the most profit for businesses. Their analysis showed that TV advertising delivers an average profit return of 1.79 pounds for every pound invested.

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TV is the leading sales driver Media Effectiveness Index – (TV Index = 100) 100%

52% 27%

Television

Press

Radio

13%

11%

Online Display

Out of Home

Source: Payback 4: Pathways to Profit, Ebiquity UK database 2011-2014 (analysis based on 10 advertising categories, 100 advertisers).

RESULTS & ROI

The Ebiquity study found that if one exposure on TV delivers 100 product sales, then an equivalent exposure on press would deliver 52 sales.

WHY TV WORKS

Television advertising consistently outperforms other media when it comes to generating sales. Ebiquity in the UK found that TV is twice as effective as the next best performing medium at creating a sales uplift per equivalent exposure.

TV ads drive more sales across categories

Relative Lift Factor 4

TV

Online

Paid Search

Print

Radio

WHY TV WORKS

Across a broad range of industries, TV advertising is consistently more effective at impacting KPIs - such as sales and new accounts - than paid search, print, radio or online (display and social). A MarketShare study in the U.S. found that at similar spend levels, television’s lift is consistently 7 times paid search and 3 times online.

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3

RESULTS & ROI

2

1

0

Automotive

Finance

FMCG

Source: Marketshare ‘Evaluating TV Effectiveness in a Changed Media Landscape’ 2010-2014, Average Lift Factor = 1.

Retail

Telcos

TV accounts for a third of all media sales

Short to Medium Term Response Short to mediumterm media

Base

61%

4% DMoutdoor & door drop 8%

Print 8%

Affiliates 10% Online display 12%

Generic PPC Search 22%

TV 33%

Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Based on 15 brands. Other online media (3%) includes VOD, email, social. Short to medium term sales (ie. within 3 months of a campaign ending).

RESULTS & ROI

39%

Other online&3% Radio

WHY TV WORKS

A recent Group M study showed that on average media drives 39% of sales in the short to medium-term. The remaining 61% comprises ‘base’ sales which are impacted by historical media activity, but also reflect seasonality, distribution or promotional activity. TV advertising drove a third of these media-driven sales - more than any other channel.

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Emotional ads drive a 23% lift in sales

Lift in Sales Volume vs All Ads For The Brand 30%

23%

WHY TV WORKS

TV’s ability to drive an emotional response is undisputed. But how does this translate to business outcomes? A recent neuroscience study conducted by Nielsen found that advertisements with the best emotional response generated a 23 percent uplift in sales volume.

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20% 10%

-2%

-10% -20% -30%

RESULTS & ROI

0%

-16% Below Average Ads

Average Ads

Source: Nielsen Consumer Neuroscience Internal Study 2015, FMCG brands.

Above Average Ads

TV drives the most cost-efficient response Marginal Cost Per Response By Media Print Online display

Spend Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Based on 7 brands.

Radio Generic PPC Search

RESULTS & ROI

Marginal cost per response

TV Outdoor

WHY TV WORKS

Due to its scale and reach, television advertising continues to generate a cost-efficient level of response than other media.

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2.7 times more can be invested in TV 250

Indexed Media Spend At Saturation

150 100

RESULTS & ROI

Comparative spend index

200

WHY TV WORKS

Efficiencies can be best maximised best through television advertising. Group M’s analysis showed 2.7 times more can be spent on television than online channels before a significant decrease in inefficiency takes place.

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50 0 TV

Outdoor Generic PPC Search

Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Based on 7 brands.

Print

Online display

Affiliates

Radio

Increasing TV ad spend drives revenue

Key Findings • • •

•

Source: VAB ‘A Question of Impact’ 2015., historical TV spend of 100 large, well-known parent companies across major categories (auto, CPG, entertainment, financial, pharmaceuticals, restaurants, retail, travel, telcos).

RESULTS & ROI

•

There is clearly a correlation between TV ad spend and business performance. Financial results are strongest for companies with consistent yearly increases in TV ad spend. Almost all companies that increased their TV ad spend saw substantial growth in revenues (+26%), stock price, and earnings per share (+38%) relative to the market. Companies with consistent, multi-year increases in TV spend saw the greatest spikes in revenues and stock measures. Companies that decreased their TV ad spend vastly underperformed the averages of all companies studied.

WHY TV WORKS

The Video Advertising Bureau in the US recently conducted a study to explore the correlation between television advertising spend and business results. The research found that companies that increased their TV spend over a 4-year period saw substantial growth in revenues, stock price, and earnings per share. Meanwhile, the companies that decreased their TV spend, underperformed against the averages of the 100 companies examined in the study.

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TV drives response through other channels

Television’s Contribution To Media-Driven Response TV's Contribution to Bricks and Mortar

45%

Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Based on 8 brands. Media-driven sales.

29% 25%

RESULTS & ROI

TV's Contribution to Web Traffic TV's Contribution to Telephone

WHY TV WORKS

TV is proven to drive a response through several channels directly. Group M analysis shows it generates nearly a quarter (25%) of all telephone sales, 45% of all sales via bricks & mortar and 29% of sales driven through direct-to-site web traffic (including natural search).

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TV has huge impact on search and online

Television’s Contribution To Media-Driven Response TV's Contribution to Paid Search

33% 33%

TV's Contribution to Online Display

26% 20%

Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Based on 8 brands. Media-driven sales. Facebook metric is likes/comments.

This highlights the need for marketers to invest in sophisticated attribution modelling tools to be able to assess the true impact of each marketing channel.

RESULTS & ROI

TV's Contribution to Facebook

TV's Contribution to Affilitates

WHY TV WORKS

GroupM also discovered that TV advertising drives an indirect response through online channels. Their analysis showed TV generates 33% of sales via paid-for online search, 33% of sales via facebook, 26% of sales via online display and a fifth of sales via affiliate marketing.

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TV is a proven driver of web traffic

WHY TV WORKS

A recent U.S. study analysed 125 ‘call-to-action’ brands across a range of advertiser categories - big and small budgets, national, regional and local - with more than 100,000 unique visitors per month. Analysis revealed that 82% of these brands showed a correlation between television advertising and website traffic. Further, the study found that call-toaction advertisers saw website traffic rise and fall with their TV ad spending.

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RESULTS & ROI

Source: VAB Ignition Point Study 2015, unique visitors as measured by ComScore.

TV amplifies the effects of other media

Case Studies

+ 4%

Twitter Only

+ 8% TV Only

+ 21% TV & Twitter

An Australian study measured the sales uplift of viewers who were exposed to a network-driven TV + online promotional campaign. It found that the shoppers who were exposed to the cross-platform communications shopped more frequently and bought more of the promoted product. They also spent 24% more on each shopping occasion.

+ 24%

Increase in spend

Source: Thinkbox; Twitter and Thinkbox Research Brain Juicer 2014; Nine Entertainment Co. Client Sales Effect Study, during the promotional period.

RESULTS & ROI

In the UK, Sainsbury used TV and Twitter to great effect. Their integrated campaign approach led to positive emotional brand response, increased purchase intent and drove an uplift in key brand attributes. The likelihood of choosing the brand the next time significantly increased for those exposed to TV + Twitter activity.

WHY TV WORKS

TV advertising consistently makes other elements of advertising campaigns work harder. The synergy between TV and online is particularly strong. Campaigns that use TV and online together are twice as efficient as those that incorporate brand advertising with other kinds of activation channels.

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Half of response generated in longer term

60%

80%

40%

41%

Home Imp

Telcos

20% Auto

59%

Want Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox.

Long-term ROI

46%

54% FMCG

32%

25%

68%

75%

Finance

Retail Need

The longer-term impact tends to be significantly larger for products we desire (eg cars) over those that we need (eg insurance).

RESULTS & ROI

% Total ROI

Short-term ROI

WHY TV WORKS

Communications work in the longer-term by driving consideration amongst those who might not currently be in the market for your brand. By investing in brand we build our base of sales which in turn makes our tactical communications more effective. A TV Response study found that around half of all media-driven response comes in the long-term (within 3-24 months postcampaign).

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Brand TV the most cost-efficient long term

Page 35

Efficiency index at driving brand metrics (higher = better)

WHY TV WORKS

Brand Response TV is the most efficient driver of long-term response. This was demonstrated in the TV Response UK study, which found that BRTV was responsible for 52% of the long-term media impact; and BRTV was 40% more efficient at driving long-term response per pound than the next best media platform. This backs up findings from previous studies, including the IPA’s Ad Effectiveness Study which found that TV advertising is vital for long-term brand health.

Brand Response TV Outdoor RESULTS & ROI

Print Radio DRTV Online display -

0.2

0.4 0.6 0.8 1.0 Efficiency index (uplift per spend)

Source: TV Response: new rules, new roles, 2015, GroupM/Thinkbox. Based on 7 Brands. IPA’s 2013 Ad Effectiveness: the long of the short of it.

1.2

1.4

1.6

TV’s effectiveness isn’t waning

Page 36

Research consistently demonstrates that TV is as effective as ever. A recent MarketShare US study which meta analysed thousands of marketing optimisations by major advertisers found that TV advertising has maintained its effectiveness over the last five years. Their analysis showed not only that TV advertising effectiveness has remained steady, but that it also outperforms digital and offline channels at driving key performance metrics such as sales and attracting new customers.

•

And Ebiquity UK’s highly acclaimed Payback Study, which looked at over 4,500 ad campaigns, found that TV continues to deliver the highest return on investment (ROI) of any form of advertising.

Ebiquity UK

Source: MarketShare “Evaluating TV Effectiveness In A Changed Media Landscape” 2015, Thinkbox Ebiquity Payback 4 Study

RESULTS & ROI

“TV has consistently demonstrated the highest ROI over a 7year period, during a period of unprecedented economic and technological upheaval and change. TV is continuing to demonstrate its value ...”.

WHY TV WORKS

•

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