ThinkTV research proves value of Facebook

Facebook head of CPG Dan Sinfield
By Facebook head of CPG Dan Sinfield | 7 August 2018

Last week Think TV fronted a session entitled ‘Not all Reach is Equal’, where Dr. Karen Nelson-Field presented the next iteration of the Benchmark Research series. This third tranche of research set out to demonstrate that the residual impact from an ad exposure on television means that it remains in consumer memories for longer than if it is viewed on Facebook or You Tube.

Towards the end of presentation, but not included in follow-up materials or subsequent marketing the effect of relative media costs of TV, Facebook and You Tube was included. The effect of costs, as acknowledged by Karen when presenting has been the most requested omission from the previous rounds of research with the relative value of the channels being a critical element to measure ROI and effectiveness.

As with previous versions, the research provides a number of interesting hypotheses and questions for media planners, creative agencies and advertisers to consider:

Facebook is as effective as TV at driving ROI

For the first time ThinkTV research includes cost and ROI through estimated CPMs by channel. The summary of the research was that Facebook has a comparable ROI when CPMs are a third the TV CPM. Being a third of the cost of TV for Facebook is relatively common and we would suggest doing this comparison is a good exercise to go through for advertisers with their media agency. When we looked at our own recent Facebook campaign, managed by one of Australia’s largest agencies, our findings were that the CPMs on TV when compared with Facebook CPMs (across the same broad demographic) were over five times less than that of TV.

An important caveat that the research made is that no targeting was applied to the CPMs on any channel. Adding basic demographic targeting stereotypically increases costs in a very pronounced manner on TV.  As an example, targeting men is 129% more expensive than targeting all adults when comparing WARC’s most recent TV cost database. Adding targeting to Facebook and other digital platforms has a much less dramatic effect on CPMs, as audiences can be bought to target individuals within a demographic at scale with no wastage.

Adding frequency of messages diminishes returns

The research suggested that when cost parity between TV, Facebook and You Tube is achieved it is not as simple as buying more impressions through Facebook, as this will drive frequency which will show diminishing returns and lessen the ROI. Whilst I fully subscribe to this principle, it does not take into account the different ways in which TV and digital can be bought.

With TV you optimise to an agreed frequency level but you still deliver higher frequency to heavier viewers as such these impressions have diminishing returns. When buying on Facebook or other digital platforms you can buy to a reach target and cap your frequency, so the level of diminishing returns can be managed and in turn the level of ROI is controlled.

This conversation will continue to rage and pieces like the Think TV Benchmark Research are great ways to challenge the way that we do things, but it is critical that we evaluate all aspect of the research to identify the right way to solve advertiser’s challenges.

Having spent 20 years in media agencies working closely with all media channels especially TV, I am a big believer in the combined power of using multiple channels.

Modern day brand building has never been more complex and it’s well recognised that a blend of the right channels across different platforms (often with TV and Facebook mobile) delivers a more effective outcome.

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