For UK Advertisers, Online Delivers Better ROI Than TV
- by Gavin O'Malley @mp_gavin, October 27, 2011
In the UK at least, online
advertising delivers substantially higher ROI and sales uplift than TV, while achieving reach equal to press and outdoor. That’s per global research firm GfK, which was commissioned to look at
the effectiveness of cross-media campaigns by eight unidentified “fast moving consumer goods” advertisers in conjunction with Google.
Gfk’s Media Efficiency Panel evaluated eight FMCG ad campaigns to measure the effects of cross-media advertising on short-term sales, as well as to assess the return on investment.
It's finding: online, on average, is more efficient than offline at delivering short-term sales ROI.
In addition, online now competes with press and outdoor when it comes to reach, GfK found. Digital campaigns reach on average 33% of the online population, while press reaches less than 40% -- and outdoor just 30%.
What’s more, online consistently delivers higher sales uplift than offline, according to GfK. Average uplift on a single contact with an online ad was 9%, compared to 6% for outdoor; 7% for TV; and 8% for press. Google Search, meanwhile, proved the biggest driver: 41%.
The panel also found significant reach by digital campaigns to consumers not exposed to TV advertising. A minimum of 25% of consumers exposed to at least one online ad were never exposed to TV ads, while 46% of those exposed to ads on YouTube and other online videos had no contact with corresponding TV ads.
As Babita Earle, digital strategy director at GfK, notes, the new research comes in the wake of online increasing its share of advertising budgets.
“With online advertising spend set to increase significantly over coming years, it is vital that media planners have quality information and data so they can fully understand the best ways to optimize ad spend, both online and offline,” Earle said.
GfK said it worked closely with the Kantar World Panel to recruit 8,000 households for its study.
I’m sorry, but this is ridiculous. It is difficult to know where to start with research that appears to be so unfit for purpose and misleading. Thankfully most serious media news outlets appear to be ignoring it.
Some context: Ebiquity’s recent Payback 3 research – commissioned by Thinkbox, but conducted completely independently – was an econometric analysis of 3,000 ad campaigns across nine advertising sectors (including FMCG) between 2006 and 2011.
This research from Google/Gfk looked at all of 8 ad campaigns and based its findings on mixing two sets of data: half from an online meter and half “modelled" from the claimed behaviour of an online sample.
Which would you trust?
Ebiquity found – like all other serious effectiveness studies – that TV’s ROI is not just better than others but has actually increased by 22% in the last five years. It also found that TV creates the most profit and is 2.5 times more effective at creating sales uplift per equivalent exposure than the next best performing medium (press). Exact figures varied in different categories, but TV was particularly more effective for FMCG brands.
But this isn’t just a scandal because it contradicts a much bigger and more robust study; it isn’t just a scandal that it gets reported without apparent questioning; it isn’t just a scandal because the methodology appears to be so unfit for purpose. My chief criticism is that it is recklessly, self-servingly misleading at a time when advertisers need the best advice possible on where to invest their money. It is a disgrace, frankly.