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SevenOne Media, which sells all the TV and Internet video advertising for ProSiebenSat.1 Group’s German TV stations, believes it has the world’s first sales modelling tool that puts an exact monetary figure on the value of TV advertising to brands and therefore its Return on Investment. And after using the model on selected brands the company has declared that television advertising delivers a high Return on Investment (ROI), driven by increased long-term brand loyalty.
According to Guido Modenbach, Managing Director at SevenOne Media: “Using our model we can determine the influence of TV advertising on brand loyalty and therefore the success of a given brand for the first time ever. This will provide convincing arguments that the TV share of a campaign media mix should be increased and that continuous TV advertising pays off. We are helping to establish a crucial KPI [Key Performance Indicator] in the market.”
SevenOne Media has been working with the independent market research think tank GfK Association to develop what it calls ‘The ROI analyzer’. This fuses TV usage data from 5,100 households of the AGF/GfK television panel with the purchasing data from the 30,000 households of the GfK ConsumerScan. It then performs elaborate statistical processing to determine the extent to which exposure to TV advertising spots occurred before each individual purchase, covering both the short-term and long-term impact of the ads.
GfK also claims this kind of model is a world first. The companies will be studying 300 brands by Spring 2013. With the knowledge it acquires, SevenOne Media will be able to advise its advertising clients and agencies about the degree of buyer loyalty for each brand, leading to individualised campaign analyses, including how campaigns can be optimised.
SevenOne Media also believes ROI Analyzer will make an important contribution to basic TV research. “We will present generalised findings that will show why some brands achieve a high ROI and others a low ROI. Those insights will enable us to study factors such as spot creation, merchandise group specifics and other factors,” reveals Modenbach.
Modenbach, along with Gerald Neumüller, Director of Research at SevenOne Media, will be outlining the results of the pioneering study at the Future TV Advertising Forum in London later this month. They will explain the data pools and modelling they used and outline their arguments for why TV creates loyal buyers and why it is essential for the long-term success of brands.
The model measures the gains in loyal buyers. “Based on our calculations, we now know that television advertising is the most important lever in marketing when it comes to making buyers out of non-buyers and then making those buyers into loyal buyers,” Modenbach said this week. “It is possible to project buying patterns and hence the sales development of a brand in the future. TV advertising increases brand loyalty in the long-term and so can generate sales effects for years after we analyse a given advertising campaign.”
One of Germany’s leading TV sales companies (and a ProSiebenSat.1 Group subsidiary), SevenOne Media completed the first part of its study in September. The results of the first test series show that the very high long-term ROIs for the individually evaluated brands is independent of the creative and qualitative style of the spots used, and independent of the selected format lengths or the TV media planning strategy.
In a previous study in the early 2000s, SevenOne Media linked TV exposure data to purchase data using a single source panel by Nielsen that no longer exists in this form today. This provided a lot of experience in ROI analysis. The approach taken at that time illuminated the short-term effects (one month) with only a few variables, so could only measure TV’s actual selling power to a limited extent.
Find out more about the Future TV Advertising Forum here.