Advertising News

With competition from Netflix and a host of new digital video providers, the television industry has undergone seismic changes over the last five years. But one thing has remained constant: TV is still by far the most effective advertising medium.

That's the finding of a new study Turner Broadcasting and Horizon Media partnered on with marketing-analytics company MarketShare, which meta-analyzed thousands of marketing optimizations used by major advertisers from 2009 to 2014.

MarketShare's analysis found that TV advertising effectiveness has remained steady during that time period and outperforms digital and offline channels at driving key performance metrics like sales and new accounts. The study also showed that networks' premium digital video delivered higher than average returns when compared with short-form video content from nonpremium publishers.

Among the study's key findings:

• MarketShare analyzed advertising performance across industry and media outlets like television, online display, paid search, print and radio advertising and found that TV has the highest efficiency at achieving key performance indicators, or KPIs, like sales and new accounts. When comparing performance at similar spending levels, TV averaged four times the sales lift of digital.
• TV has maintained its effectiveness at driving advertiser KPIs over the last five years. In a study using data from a luxury automaker, TV was the only medium to maintain its effectiveness (a 1.5 percent decrease in five years) while the other advertising media—both online and offline—declined more than 10 percent.
• TV marketers can optimize their spend by leveraging data sources, including high-frequency consumer interactions like website visits and inbound calls, to improve TV advertising performance.
• Premium online video from broadcast and cable networks out-performs video content from other publishers.

"We really wanted to do the study to better understand how TV's effectiveness—not average rating, but effectiveness—at driving key KPIs for advertisers has changed over time, " said Howard Shimmel, chief research officer at Turner Broadcasting. Shimmel added that when he sees reports about advertisers moving "big-budget shares out of television, we think that might be driven by the assumption that TV's effectiveness is being diminished."

On the agency side, Eric Blankfein, chief of Horizon Media's Where group, said that while many clients want to migrate their budgets to video, "because of that lack of consistent measurement, we're not sure how effective those dollars are performing in the digital space. So, it was very important from our perspective to start to quantify business performance relative to TV advertising."