Payback 4: pathways to profit
Jan 25, 2015
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