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TV Tops in Generating Incremental Sales

Linear TV advertising drives the highest incremental sales per exposed household, according to a new study on return on advertising spending.

The study, entitled “Yes, Advertising Works, Now What’s MY ROAS Across Media Platforms?” was conducted by Nielsen Catalina Solutions, working with the Advertising Research Foundation, CBS, Meredith Corp., Sequent Partners and others and presented at the ARF’s audience measurement conference in New York.

The study reported benchmarks that allow marketers to compare the return they should expect from every dollar of spending in various media. Nielsen Catalina looked at spending over 11 years and 1,400 campaign for 450 brands from seven product categories.

The study found that linear TV advertising generated 33 cents worth of incremental sales per household exposed, the highest of any media. TV was followed by magazine, digital video and mobile, which were all within 3 cents.

Mobile drives the highest incremental sales per thousand impressions, at $26.52. Digital video follows at $23.48 and linear TV at $20.56.

Magazines show the highest return on advertising spend, generating $3.94 for every dollar spent. Unlike the other benchmarks, ROAS is impacted by the cost of media. Display ads were generated the second highest level of sales at $2.63, followed by cross media at $2.62 and linear TV at $2.55.

“New data – like these benchmarks – is a step towards creating the most effective campaigns possible,” said David Poltrack, chief research officer for CBS. “While the report focuses on averages, the real story is in the range of ROAS and the dynamics of advertising return as campaigns increase in scale. There is a big difference between the 'average' and the 'best' return and these new analytical tools will help advertisers beat the 'average' and approach the 'best' outcome.”

The report found that different product categories have different ROAS. Expensive, frequently purchased items, like baby and pet products, have higher ROAS than less expensive products such as food and beverages.

Creative genres also play a part. Promotional campaigns did well and ads with recipes had lower returns.

"The insights we've uncovered by comparing ROAS and incremental sales across media types are invaluable,” said Leslie Wood, Chief Research Officer, Nielsen Catalina Solutions. “While there is no 'best' media, and choices should be driven by strategy and message, advertisers can leverage this data to inform their media decisions."

(Photo via Pictures of Money's FlickrImage taken on Sept. 17, 2015 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.