Shifting up to 15% of TV Ad Spend to Online Builds More Effective Reach at a Lower Cost, According to New Research from IAB

Previous Viewing of Digital Video Ads Increases Brand Recall By 33% for Aligned Television Campaigns

PHOENIX--(BUSINESS WIRE)--With brand marketers always looking to get the most out of their advertising budgets, the Interactive Advertising Bureau (IAB) today released “A Comprehensive Picture of Digital Video and TV Advertising: Viewing, Budget Share Shift and Effectiveness,” a Nielsen research study commissioned by the IAB investigating how moving dollars from TV ad budgets to digital media – especially digital video – affects reach and costs. Shared at the sixth IAB Annual Leadership Meeting, “Big Data & Big Ideas: Friends, Enemies, or Frenemies?,” at the Arizona Biltmore in Phoenix, the report reveals that a 15 percent shift in media spend to digital will drive a distinct increase in advertiser reach across verticals.

“Big Data & Big Ideas: Friends, Enemies, or Frenemies?”

The study benchmarked how real TV schedules across key advertiser verticals perform as money moved to digital. To accomplish this, the research examined 18 real TV schedules across advertiser verticals. Categories included Consumer Packaged Goods (CPG), specifically Health & Beauty and Food & Beverage, as well as non-CPG verticals such as Technology, Automotive, Retail, Finance and Telecom. Findings pointed to various benefits from a 15 percent shift into digital:

• On average, CPG reach grew 3.4 percent (3.4 reach points) among persons 18 and older (P18+) when 15 percent of ad spend moved into digital
• In all other categories beyond CPG, schedules consistently averaged an incremental reach of 6.2 percent (or 6.2 reach points) at the same reallocation of 15 percent of budget to digital among P18+
• Across verticals, the 15 percent share shift results in more reach at lower costs per point, dropping from an average of $67.6K to $63.0K
• Corresponding CPMs decline from $13.82 to $12.31

Not only did shifting TV ad budget to digital result in increased reach, but that reach was more effective. The combination of digital advertising and television commercials was found to be a particularly potent mix, with duplicated reach shown to be more effective on key brand effect metrics than either platform alone. Research demonstrated that planning and running video ads online prior to TV boosts brand recall for that same ad playing on television by 33 percent. There were similar gains when it came to online display ads, with consumers 25 percent more likely to recall the brand if they had seen the display ad before seeing the ad on TV.

“This study documents that brands need both online media, especially digital video, and TV to reach consumers effectively,” said Sherrill Mane, Senior Vice President, Research, Analytics and Measurement, IAB. “It’s eye-opening to discover that viewers actually have an easier time naming the brand behind a TV commercial if they have had the opportunity to be introduced to the creative first on a digital screen. Marketers and media planners clearly need to start thinking about their digital buys – whether video or display – before they forge ahead with a traditional television buy, in order to optimize reach and effectiveness.”

Looking specifically at digital video – whether in short-form or full episodes – online video ads scored higher impact than TV ads when it came to general recall, brand recall, message recall, and ad likeability. Full episodes online are particularly effective. For example, general recall is 39 percent higher for video ads during a full episode online than on TV. Brand recall, message recall, and ad likeability of ads during a full episode online are almost double those of a TV commercial.

This trend is consistent within all ad categories, with Hospitality, Finance, Retail, Restaurants, Food & Beverage, and Pharma noted as the top performing sectors for brand effectiveness in ads that appear during full episodes online.

While TV viewing is flat, total streams viewed and time spent streaming continue to grow for online video. In addition, light TV viewers are watching more online video with the lightest TV viewers streaming twice as much as heavy TV viewers (7 hours per month vs. 3 hours).

Age is also a factor, with the coveted 18-34 demographic continuing to increase their time spent with online video. They are also the largest group of streamers, with roughly 4 in 10 video streamers being 18-34. Gender plays a small role too. More women stream online video than men, but men spend more time viewing and watch more streams. The exception is long form videos, which women stream more than men.

Another key element addressed by the study is ad receptivity, with findings showing that the average digital video viewer watches 87 percent of the video ad. Mid-roll ads enjoy the highest completion rates.

“A Comprehensive Picture of Digital Video and TV Advertising: Viewing, Budget Share Shift and Effectiveness” was made possible through the sponsorship of Microsoft Advertising and Yahoo!.

To read the entire study, please visit www.iab.net/dvtvstudy.

Methodology

For this study, Nielsen conducted a comprehensive analysis of 2011-2012 census, and survey-level TV and online data deployed from the following Nielsen solutions: Nielsen Cross-Platform Homes panel, a single-source opt-in panel measuring TV and online behavior; Nielsen VideoCensus/Video Analytics census data; Nielsen TV/Internet Fusion Data; Nielsen Brand Effect surveys measuring resonance of TV and digital ads.

About the IAB

The Interactive Advertising Bureau (IAB) is comprised of more than 500 leading media and technology companies that are responsible for selling 86% of online advertising in the United States. On behalf of its members, the IAB is dedicated to the growth of the interactive advertising marketplace, of interactive’s share of total marketing spend, and of its members’ share of total marketing spend. The IAB educates marketers, agencies, media companies and the wider business community about the value of interactive advertising. Working with its member companies, the IAB evaluates and recommends standards and practices and fields critical research on interactive advertising. Founded in 1996, the IAB is headquartered in New York City with a Public Policy office in Washington, D.C. For more information, please visit www.iab.net.