TV wins for FMCG advertisers, but study 'not that helpful' for marketers

Pippa Chambers
By Pippa Chambers | 28 November 2016
 

Despite today's release of an epic $1 million “world-first study” which shows TV creates the best return on investment (ROI) for FMCG brands, Vijay Solanki, CEO of the IAB which represents the digital industry, has hit back saying the findings actually aren’t that helpful for marketers.

The study, which involved nine major advertisers Unilever, Pfizer, Lindt, Kimberly-Clark, Goodman Fielder, Sanitarium and McCain, found that TV “by far” gave the the best ROI for fast moving consumer goods (FMCG) brands in Australia, “easily beating online video, online display, radio, press, and outdoor advertising”.

The first wave of the Payback Australia study, by independent marketing analytics firm Ebiquity, found that every $1 invested in TV advertising generated a return of $1.74 and that TV was the only media in the study that generated a positive short-term revenue ROI for the nine participating FMCG brands.

The advertisers, which collectively spend more than $200 million on advertising per annum, gave Ebiquity access to three years of raw sales and campaign data.

Naturally, ThinkTV CEO Kim Portrate welcomed the report saying that when it comes to advertising and driving sales, the Australian Payback study and other global studies continue to prove that TV leads the way.

“The marketers that we talk to are trying to drive growth in really challenging conditions,” Portrate says.

“One of the few levers to grow your business is media. Advertisers in the consumer packaged goods industry – covering pharmacy, liquor and grocery – know the importance of retailer in-store promotions but they also know it comes at a cost and is short-term.”

World first study into media return on investment shows TV wins hands down for FMCG advertisers

More needed

However, ex-marketer and IAB CEO Vijay Solanki says while there is no argument that TV is important, this report “does not provide particularly helpful data for marketers” as it ignores the media multiplier effect and it speaks only about short term ROI.  

“It also totally fails to address the speed and inevitability of consumers' changing media consumption behaviour,” Solanki says.

“Indeed with the high calibre of marketers in the market, it seems unlikely that they continue to reinvest in channels and strategies that do not work for them. We’ll wait until the full report is made available before commenting in any further detail.”

The study found online video returned 72 cents for every dollar invested, online display 41 cents, print returned 79 cents, radio 71 cents and out of home 62 cents.

Richard Basil-Jones, chief executive of Ebiquity Australia ad New Zealand, says based on extensive econometric modelling, advertising on TV compared to other media types, has proven to be the “clear leader” for return on investment for the very large and important FMCG category.

“The fight for every additional percentage point in product sales is a tough one for advertisers in the FMCG category, this rigorous Australian Payback study has proven that when it comes to advertising, TV is the leader for ROI.”

Ebiquity also found that TV retains approximately 65% of its of its impact from the previous week, ahead of outdoor on 28%, online video on 23%, online display on 22%, print on 19% and radio on 17%. The results suggest recall of TV ads is stronger and lasts longer than other media.

The first part of the research will be presented officially at the ReThinkTV Marketing Forum on November 30 to be held at Doltone House, Sydney. The second and third, covering the finance and automotive sectors, will be released in Q1 2017.

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