Originally featured on BroadcastEngineering.com
Network TV fails to provide advertising ROI
Media advertising does the worst job of any marketing discipline in proving return on investment (ROI) and network TV is the worst of those media, says a new study from Advertising Age magazine.
Direct marketing topped the list of disciplines as best for ROI, while direct mail was cited as most accountable. Media advertising was cited by more than one in four respondents as the worst for proving ROI, followed by public relations, at 25 percent. Product placement was third with 13 percent.
In all, 222 marketing professionals filled out the online survey, which has a confidence level of plus or minus 6.6 percent.
Despite inventory sellouts and spiraling rates during the recent upfront, network television was chosen by 32 percent of respondents as the worst medium for proving ROI. Non-network TV was seen in a better light; cable was cited by only 5 percent of respondents as doing the worst job of proving ROI, while spot TV was chosen by 3 percent and syndicated TV by 2 percent. Larger spenders are more likely to blast network TV; 44 percent of advertisers with budgets over $100 million ranked it as the worst medium.
Least favored after network TV for proving ROI was out-of-home advertising (cited by 14 percent), followed by Internet and radio (8 percent each), then newspapers and magazines (7 percent each).
Overwhelmingly seen as best medium for proving ROI is direct mail, cited by 42 percent of respondents, more than a 2-to-1 ratio over the second-best medium, the Internet, at 19 percent. No other media discipline was cited by more than one in ten respondents.
Two of three respondents said the current measurement tools are inadequate to prove ROI, with larger marketers tending to express more dissatisfaction than smaller ones. A full 73 percent of respondents with sales between $100 million and $1 billion felt there aren't adequate measurement tools available. Among those with budgets less than $10 million, 65 percent felt the tools were less than adequate.
Respondents listed various tools they said would be valuable to them in determining ROI, including ongoing tracking data, Web-based analytics, segmentation information, market research on brand equity, and methods to assess lifetime value of customers.
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