YouTube ads ‘getting better ROI than TV’

21/04/2016

More than three-quarters (77%) of campaigns on YouTube have "a higher return on investment than TV", according to new research.

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The Google-owned video site carried out a “meta-analysis" of 56 case studies across eight countries that "shows how online video contributes to offline sales and proves that it should play a bigger part in the media mix".

Key takeaways:

● Research shows YouTube drives higher ROI than TV at current spend levels.

● Increasing spend on YouTube can better optimise the media mix.

● Google can supply richer and deeper data to plug into an advertiser’s media mix modelling tools for increased transparency into YouTube ROI.

YouTube cited campaigns for several brands, including Mars, which got " double the ROI of TV for each pound spent reaching the main shopper", and Danone, which had "an ROI two to three times higher for YouTube than TV for every euro spent".

The research was carried out with a range of partners including BrandScience, Data2Decisions, GfK, Kantar Worldpanel, MarketingScan and MarketShare and used a variety of robust methodologies to understand the correlation between media exposure and offline sales.

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Lucien van der Hoeven, General Manager EMEA at MarketShare, a Neustar Solution, said: “We at MarketShare were proud to contribute our analytics to this major data study, addressing one of the most pressing marketing issues of our day.

“We found [in our projects] that while TV maintains a powerful impact in the digital age, digital video is under-invested in several categories we measured in the UK, France and Germany. In every case it was key to understand not only how each medium performed on its own but, most importantly, how to orchestrate the optimal combination of various media channels for maximum impact.”

Sally Dickerson, Global Director of BrandScience, added: “We find online video to be particularly effective, short term and medium term, versus other online tactics, and always an enhancer of “total video” ROI. Where we have been able to drill down further and isolate the impact of YouTube versus other online video, we find YouTube to be more effective in ROI terms, for both online and offline purchased products”

Key findings

Specific examples from the meta study illustrate key findings

● Mars UK ran a Snickers campaign in summer 2015. The campaign tested the mix of TV and online video activity in order to see whether the media plan across channels and devices was optimised to maximise in-store sales. The results showed that YouTube delivered more than double the ROI of TV for each pound spent reaching the main shopper.

● Danone’s French campaign for Danette desserts saw an ROI two to three times higher for YouTube than TV for every Euro spent with 7% of the sales attributable to the online video activity. The brand noted that YouTube particularly increased sales among light purchasers of Danette, accounting for 66% of sales within this segment.

These are just some of the stats showing that marketers are under-investing in YouTube and so failing to maximise sales. Marc Zander, UK/Global Media Director for Mars Chocolate, said: “This test highlights the importance of YouTube as a medium as part of our overall media strategy. YouTube clearly has a role to play in our ongoing media plans in addition to TV."

Marie Mathieu, Mediacom Connection Planner in charge of Danone, added: “This study really strengthens our global approach to optimise video communications to complement our TV communications.”

Ad effectiveness on the web is different to television

“This is the story of ad avoidance,” explains Danny Meadows-Klue, Chief Executive of the Digital Strategy Consulting group. “In today’s cluttered media landscape people are bombarded with commercial messages, and screen out the things they’re not interested in. Ever since the arrival of the remote control there has been ad skipping, but with the proliferation of media, people have become highly “marketing literate”. From outdoor posters to newspaper, direct mail to radio, people have simple learned how to tune out.” Meadows-Klue has been tracking ad effectiveness since the mid 90s, running the first online advertising effectiveness research studies with Millward Brown in the UK and across Europe.

“The YouTube research tells the truth about TV: we watch the shows, but we skip the ads. It’s an uncomfortable truth for a media planning industry that has been reluctant to let go the simplicity of the flawed model of GRPs, but the reality is that brands are paying to be in front of a disengaged audience.”

Contrast that the TV ad experience to that of the web, and it’s easy to see why brand effectiveness and purchase intent scores are much higher: “You have a lean-forward media channel, people are actively engaged, and the ads appear a moment after there’s been a focused activity like clicking to watch a film. It’s a different level of consumer focus, and attention – and that’s the online effect.”

Mars and Danone are among the big TV brands that are fundamentally questioning the main media channel that helped build their brands to top the magic $1bn in sales. They join the likes of Unilever and P&G who have made big switches away from traditional channels in favour of where the audiences have moved to and where marketers know they can get cut through.

Maximise Sales By Optimising The Media Mix

As part of the meta study1, a forecast was created for 17 of the campaigns to demonstrate how shifting a portion of media spend into online video would improve the efficiency of the media mix. In more than 80% of these cases, the ‘recommend to spend’ on YouTube was more than double that of historic levels to optimise the media mix.

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The forecast for Diageo’s Guinness UK campaign illustrates this point – the brewer’s optimised media mix to achieve maximum ROI included a fourfold increase in planned YouTube investment.

Paul Dyson, Founder of Data2Decisions said: “We have been modelling online video for clients throughout the past 5 years and our experience consistently finds higher ROIs from online video compared to TV. So it was no surprise to see this repeated in the studies we conducted with Google. We used traditional industry accepted MMM techniques but supplemented these with our own Ecosystem Modelling approach allowing us to separate out YouTube from other online video platforms. This produced the same findings we have found in the past – higher YouTube ROIs with optimisations across a range of clients suggesting spend should be 2 - 6x higher.”

Source: YouTube


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