Increasing evidence from various studies and reports indicate that online video is a compliment to TV versus a replacement when it comes to advertising and branding efforts (Source: State of the Video Industry Q4 2012). Sticking with the theme from last week’s blog which discussed how media is bought and measured in the TV and online world, the question of how (or whether) ROI is measured is an obvious one. However, the results and answers to this question are less than obvious.
Given ROI metrics for TV are still being developed 70 years after the first ad was broadcast, it begs the question why online is held to higher standards at a fraction of the cost (Source: gigaom.com, nielsen.com)? Does the receptiveness of the consumer mindset and time and place have something to do with it? Perhaps; as most consumers are watching TV after work hours and online during work hours, although tablets and mobile could challenge that theory. A logical reason could simply be that those in the advertising industry have learned from their mistakes and do not want to repeat history without proven ROI for all future advertising mediums.
Regardless of the reason, TV advertising has been shown to produce higher yields for a percentage of campaigns but the return cannot necessarily be guaranteed for all. A three year study by Deutsche Bank indicates that although in half of the advertising campaigns the return did not sufficiently cover the media cost, the gain from the other half more than offset the cost (Source: wpp.com). However, additional recent research by Accenture indicates that 82% of TV ads generate negative ROI, and a recent study by Simulmedia using data from Nielsen and Kantar Media shows that in the majority of cases, TV ads are only seen by 20% of marketers’ targeted audience (Source: Financial Times).
Online advertising on the other hand, has a targeted audience focus with immediate measurable results, but some would argue it lacks the reach of TV, while others would argue scale is the internet’s strength (Source: gigaom.com, techcrunch.com). Platforms such as Facebook with over 1 billion active monthly users are quickly gaining ground, but the industry has yet to settle on the most effective online advertisement type or strategy, which is completely dependent on the brand or advertiser goal (Source: facebook.com). From keyword advertising to banner ads to video, and paid, owned, earned, and social media strategies, the options are vast.
Research any of these methods and you will find multiple studies indicating online keyword campaigns increase offline sales results, to online banners are dead, and that video is the new TV (Source: inc.com, forbes.com, tech crunch.com). How can a marketer not be confused? Out of all the data, one theme is ringing through loud and clear. The proven use of sight, sound, and motion in the TV world is quickly becoming the preferred method of choice online as well with video advertising projections continuing to increase year over year (Source: MediaPost). Advertisers have even gone so far as to say that online video is just as effective if not more than TV advertising, but they also said that more definitive ROI and success metrics are still needed (Source: TechCrunch, Brightroll Report).
Facebook seems to have found a way to close the loop through their partnership with Datalogix, a Nielsen competitor (Source: BusinessInsider.com). The way it works is after a user views or clicks on an ad on Facebook, the retail store collects the user/consumers email and home address information, which allows the brand or advertiser to cross-reference that information with a report Facebook provides, ensuring the user/consumers anonymity, and confirming the online and offline link. The question now remains whether the conversion percentage and overall yield is higher online compared to spend.
About Preview Networks
Preview Networks is a content marketing platform for brands and content aggregation and syndication platform for publishers. We provide the tools for brands to centrally distribute and manage marketing and PR content across media destinations, devices, and commerce platforms; allowing media partners to automate content acquisition delivering audience and advertising revenue growth.