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Automotive brands get biggest ROI from TV advertising, new study claims

A new study commissioned by ThinkTV has found automotive brands get a sales return of $8.90 for every dollar invested in television advertising, well ahead of closest competitor radio, which returns $5.00 and out-of-home, which returns $1.40.

The study was based on three years of raw sales and campaign data for four automotive advertisers who collectively spend more than $150m on advertising per annum – out of the automotive category’s $700m annual media spend – and found all media channels provided automotive advertisers with a positive return on investment.

The findings contrasted with ThinkTV’s study last year on the FMCG category, which claimed only television had a positive ROI ($1.74), compared to print (79 cents return for every dollar invested), video (72 cents) and radio (71 cents).

Richard Basil-Jones, managing director of the Asia Pacific arm of Ebiquity – which conducted the study – said when it comes to the automotive category “advertising works. End of story… just some works better than others”.

The study found ‘social’ had a ROI of $1.60, on par with print advertising and ahead of online display ($1.50) and out-of-home ($1.40).

Basil-Jones noted the study had worked hard to try and unpack digital media, but said it came with its challenges.

“With over $700m invested in advertising in 2016, it is a crucial growth level for the car manufacturers. When the marketing world is placing greater focus on business outcomes, this extensive econometric modelling for the auto category has proven how critical TV is to the media mix. When it comes to the Australian automotive sector, TV is a critical factor in driving sales.

“We have worked hard to understand the return on ‘digital’ media in more detail. We are able to provide an ROI measurement for online display and social activity, as we had both impressions data and spend. However, we were unable to provide an average online video ROI as the same level of detail was not made available by all participants.”

Speaking at Mumbrella’s Spends and Trends breakfast back in 2015, Fiat Chrysler’s chief marketer Mark McCraith, who was at the time in charge of brands including Jeep, Fiat and Alfa Romeo, said: “I’ve never sold a car via social media”.

“It is an avenue for a lot of complaints which does at least take the pressure off our call centres, I guess,” he said.

“We are yet to see social media show the ability to drive a lead and thus sell a car from activity we have done.”

The ThinkTV study also found media spend accounted for 12% of new car sales – 81% of which was driven by television.

Kim Portrate, CEO of ThinkTV, noted the power of TV in driving new sales, particularly as the automotive brands were dedicating 53% of their media budget to television, but it was accounting for 81% of new sales. Comparatively, radio gets 8% of media spend, driving 6% of sales, and digital drives 5% of new sales, based on a 17% spend.

“Ebiquity’s extensive econometric modelling shows that TV is the clear winner in terms of effectiveness for brands looking to grow sales. At $8.90 for every dollar invested, TV’s performance is head and shoulders above the average media ROI for other media, which is $2.37. When it comes to advertising driving sales the Australian Payback study and other global studies continue to prove that TV leads the way,” she said.

At Mumbrella360, ThinkTV will reveal the results of a huge survey of over 1,500 media and marketing professionals – one of the biggest exercises of its type ever undertaken in Australia. The results of the research will be presented by Osher Gunsberg.

More details – including how to book tickets – are available on the Mumbrella360 website.

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