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ROI camparison between online and conventional channels such as TV

Research firm Gfk have tried to compare a series of campaigns across different channels and found that online was at last out performing TV. Of course this is a difficult comparison to make as the same message finds different people in different moods across the channels and tailoring a different message would make the results invalid. The have tracked multiple campaigns across the different channels to try to reduce this risk. The key report of the findings by MediaPost was:

In addition, online now competes with press and outdoor when it comes to reach, GfK found. Digital campaigns reach on average 33% of the online population, while press reaches less than 40% — and outdoor just 30%.

What’s more, online consistently delivers higher sales uplift than offline, according to GfK. Average uplift on a single contact with an online ad was 9%, compared to 6% for outdoor; 7% for TV; and 8% for press. Google Search, meanwhile, proved the biggest driver: 41%.

The nice thing about the published uplift numbers is that it gives a way of assessing what the different channels are likely to be worth to you. They also point out that 25% were reached by online advertising but not by television. If a TV CPM were costing you $20 your might be willing to pay some proportion of $120 for a Google Search CPM. However there are only a limited number of people being reached by effective Google Search CPMs so your budget is then going to sill over into display advertising at some discount on $25 until you weren’t reaching as many additional people and were spilling over into the world of outdoor and TV advertising.

Even if people don’t believe these numbers if gives some heart to only advertising based sites that advertisers are going to read reports like this and start to be willing to increasingly spend more significantly on display advertising.

If you are advertising online yourself it’s worth noting that the short term sales uplift was over five times greater with Google Search (Presumably discriminatingly spent) than with display advertising. The long term brand benefit tends to still be discounted.    Send article as PDF   

Posted in Business Models.

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