Study Confirms Broad Reach + Quality Content Drives ROI

By Thought Leaders Archives

Recently, Coke and P&G said they were rethinking their media strategy. P&G is going to focus more on "reach and continuity" adding that they see better sales results advertising in broad-reach primetime TV shows. According to Coke's CMO good old-fashioned TV has the highest ROI.

So what happened to data-driven targeting? I think what the sales data shows, or at least reminds marketers of, is the power of large-scale quality content.

Our research at ABC supports this conclusion. Working with Accenture last year, we analyzed $12 billion of actual media spending with actual sales data. We broke out spending on different media types over three years. We looked at the effectiveness of each media type and at the interaction between different media types.

Here is what we found:

  • Multi-platform TV advertising – for example Grey's Anatomy watched live on linear television, or on demand on any device – had measurable long-term impact. Over a three-year period, multi-platform TV advertising drove substantially more incremental sales than any other medium we measured, and its impact in Years 2 and 3 was larger than Year 1.
  • Multi-platform TV has a halo effect on search, display and short-form video advertising. Having multi-platform TV in the mix helps other media work harder.
  • The marginal returns of an incremental dollar spent on multi-platform TV diminish at a much slower rate than a dollar spent on search, display or short-form video.
  • Long-form digital video, such as that Grey's Anatomy episode on mobile, desktop or connected TVs, is the most effective form of digital advertising. (Grey's Anatomy stars Justin Chambers and Camilla Luddington are pictured at top.)

A whitepaper with all the detail on this study is available on ABCAllAccess.

Premium video gives advertisers an environment of sight, sound, motion and emotion to deliver their message. Running in a quality show or environment signals product quality to consumers. It's why the most expensive advertising of the year is on the Academy Awards or the Super Bowl -- even though those shows both deliver a broad, not targeted, audience.

Indeed, the ABC-Accenture study validates the value of broad-reach and quality programming. The most effective medium measure was multi-platform TV, which is almost entirely transacted on a broad demographic basis, not data-driven targeting.

Is it possible that highly targeted advertising is proving to be less effective for brands? The strategy shifts at P&G and Coke certainly suggest it is possible. The researcher Byron Sharp, who wrote How Brands Grow, demonstrates empirically that a brand's sales growth comes from "light buyers." Targeted media is nearly always directed at existing buyers or look-alike models of existing buyers. That's an approach that doesn't capture the light (or future) buyer who is crucial to lifting sales. What John Wanamaker thought of as "waste" is actually an investment in attracting light buyers and building a brand.

As many have noted, broad advertising in quality content seeds a brand's message in our culture. It creates a cultural understanding of what kind of person you are by what kind of products you purchase. Are you a laid-back person who likes to relax at the beach? Do you want people to think of you that way? Then bring Corona to the party, because that brand's beach-oriented ad creative has established that connection with their brand, and therefore with you -- if you drink Corona. 

This concept is important. The advertising says something about the brand, and the brand you choose says something about you. Your car, your beer, your phone, your handbag all say something about you, and what they say is very much informed by advertising.

This is where targeted advertising misses. For a brand's identity to be part of our culture, for people to think of Corona as the "chilling out on the beach" beer, it must be a common, widely held understanding. The message has to be internalized not just by the person choosing Corona, but by everyone else, too.  For a brand to justify a premium or be selected over a generic competitor, it must offer value based on its performance as well as its brand equity. And the only way to create a widely understood image is through mass, not targeted media.  Mass reach is the competitive advantage of multi-platform TV in general and broadcast TV in particular. Mass reach is how a brand's message becomes part of our culture. And mass reach is driven by broadly appealing, high quality content. This is why sophisticated marketers like P&G and Coke choose to build their brands in the most premium, broad-reaching environment, multi-platform TV.

Now with all of that said, not every brand is a badge, and we are still doing a lot of work around data-targeted sales at ABC. We see the marketplace momentum around data-driven targeting, and it clearly has a place in the marketing mix. None of us want be the ostrich with its head in the sand. We have to embrace data-targeted advertising but with a clear understanding that there are challenges and limitations.

We think about ads in broad-reach quality content and data-targeted advertising as two ends of a spectrum. We don't think it will be all or nothing in the future.  A smart marketing mix will leverage both tactics, which means our industry needs to invest on both fronts.

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