Online advertising delivers substantially higher ROI and sales uplift than TV and achieves reach equal to press and outdoor, according to new research.
GfK’s Media Efficiency Panel (MEP) evaluated eight major FMCG ad campaigns to accurately measure the effects of cross-media advertising on short-term sales and to assess the return on marketing investment.
The key findings show:
Online is on average more efficient than offline at delivering short-term sales ROI. The GfK MEP revealed an average ROI of 75p for all online activity compared to 66p for press, 53p for outdoor and just 43p for TV.
Online now competes with press and outdoor when it comes to reach. Digital campaigns reach on average 33 per cent of the online population while press reaches less than 40 per cent and outdoor just 30 per cent.
Online consistently delivers higher sales uplift than offline. Average uplift on a single contact with an online ad was nine per cent, compared to six per cent for outdoor, seven per cent for TV and eight per cent for press. Google Search proved the biggest driver (41 per cent).
Significant exclusive reach by digital campaigns to consumers not exposed to TV advertising. A minimum of 25 per cent of consumers exposed to at least one online ad were never exposed to TV ads while 46 per cent of those exposed to ads on YouTube and other online videos had no contact with corresponding TV ads.
Online video delivers distinct sales uplift. Online video delivered an average ROI of 81p – almost twice that of TV advertising based on current spending. For adverts on YouTube the ROI was 84p.
This research comes in the wake of online increasing its share of advertising budgets. Online ad spend reached 27 per cent of the total market share in the first half of 2011 compared to just three per cent spent on online in 2003.
Babita Earle, Digital Strategy Director at GfK, said: “With online advertising spend set to increase significantly over coming years, it is vital that media planners have quality information and data so they can fully understand the best ways to optimise ad spend, both online and offline. The findings of this new study will help marketers re-evaluate their budgets to take advantage of the efficiencies delivered by online.”
She continues: “When executed appropriately online can play a significant and unique role in the marketing mix – both complementary to television, print and outdoor, but also distinct from it. Where it is utilised well, online is a very efficient means to connect with hard-to-reach consumers who tend to escape traditional advertising channels. There is little question that online should be part of future media campaigns to reach new and incremental audiences more efficiently.”
Shuvo Saha, Industry Director FMCG & Healthcare, Google: “The UK Media Efficiency Panel has for the first time enabled FMCG advertisers to link their digital media investment directly with in-store sales. The studies that GfK have undertaken with some of our major advertisers have proven the sales effectiveness of search, display and YouTube activity in integrated multimedia campaigns and provided invaluable insights about consumer behaviour across offline and online channels.”
The Impact of Online Advertising report can be found on GfK Digital’s website: http://www.gfknop.com/your_issues/digital/index.en.html