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  • TV still takes up most of people’s media day…and because it’s as popular as ever and is still loved by the masses it is still the key media for driving the fame, talkability and emotional connections between consumers and brands. It is the best place for your brand to be seen by all at the same time and therefore create those day after Watercooler moments. It gets brands talked about, gives them kudos and universal meaning. It forms the hub of mixed media campaign – amplifying the work of other media and driving people online.
  • …and if we look over time, TV viewing has remained unchanged. Despite all the hype that traditional television is dead – the data proves that this isn’t the case at all.
  • TV programmes remain the second most talked about subject after friends and family and this position has remained unchanged for the last 10 years.
  • …and the DTR has enhanced TV in people’s lives. It has helped people to love TV more and make it their own. People in DTR homes are watching more TV as they can better tailor it to their needs. As they are watching more TV they are watching more TV advertising. Research carried out by Thinkbox on how viewers engage with TV showed that if people do fast forward through the ad break (and a lot didn’t!) viewers concentrate even more on the screen and still talk about what is zipping past their eyes. Sponsorship bumpers are seen to work even harder in this environment as viewers are looking for the bumper to know to stop zapping as they have nearly reached the programme. The bumper therefore becomes even more closely associated with the programming.
  • The importance that TV still has in people’s lives means they are investing in better ways to enjoy their TV experience.
  • Consumers are starting to celebrate the set in the corner of the room again. Consumer activity shows that all the new functionality acts as a support, not a replacement for broadcast TV. TV content is working on these new platforms, extending people’s experience of it and any brand that is associated with TV content therefore also spends more time with the consumer.
  • Together all these different platforms give ITV a unique ability to interact with viewers. To take just one example, last year’s final of Britain’s Got Talent got almost 13 million viewers , 3 million of whom voted . Even more spectacular, Paul Potts winning performance is – as far as we can tell – the most downloaded clip on YouTube worldwide. There were more than 500 different videos uploaded, with total views topping 30million plus.
  • Continuing with the Britain’s Got Talent example this chart shows there are various ways that a viewer can interact with one of ITV’s programmes…. A viewer could read Piers Morgan’s blog on her mobile or email clips to her friends via or watch a lunchtime catch-up show on ITV2. She could be watching exclusive backstage videos on or sharing mobile clips with her friends. Indeed, there are no doubt some people interacting with the programme in all of these ways. This 360 degree viewer experience around water cooler type shows are now a reality and ITV can deliver them better than any of our commercial rivals.
  • When looking at the consumption of TV related content online we can see that it is the younger consumers who are leading the quest for more TV content.
  • ...and it is understandable that they are the ones leading in downloading and sharing TV content as from the figures here we can see they are spending more time with TV than other media. Despite all the hype that the younger audiences are spending more time on the internet at the expense of TV, they are still spending much more time (nearly 3 times as much) per day with the TV. Thinkbox research shows that online access and TV viewing work well together for the younger audiences with nearly half of them surfing the net and watching TV at the same time.
  • Whilst the younger audiences are spending more time with TV than the internet, they are also much more positive about TV advertising… Recent work carried out on TV and Youth audiences by Other Lines of Enquiry shows that 8-21 year olds are almost 3 times more likely to enjoy TV ads than adults. They accept advertising as part of commercial TV and talk about TV ads with enthusiasm. When asked what their favourite adverts were – 805 of the ads mentioned were TV ads.
  • And we also deliver strong reach against 15-34’s. Every day 3.9 million 15-34s watch ITV1 - easily outstripping the Sun and Facebook. Once again ITV2 performs well reaching 1.5m 15-34’s every day.
  • Their viewing of TV hasn’t dwindled over the years….
  • Their TV attention hasn’t dwindled over the years…
  • Whilst it is easy enough to look at media return in isolation, it goes without saying that the knock on effect of one will have an impact on the effectiveness of the others. Medicom’s DART tool highlights this…. The agency measures how effective different media channels are at generating response. Each channel has its own phone number so the cost per customer can be measured and so the value of each channel assessed (blue bar). So, for example, the cost per customer is £40 for DRTV and around £5 for search However, it doesn’t take into consideration the effect of one media channel on another. TV has a big effect on other media, particularly search. We know that when a TV spot has been transmitted, there is a huge surge in search so if we only look at the costs assessed in the blue bars on this chart, we are missing the real effect of TV because of its influencing role. Mediacom did an econometric analysis on the response data, that built in the effect that different media channels have on each other . Once adjusted, the cost per customer for DRTV was significantly reduced to £12 per customer (the red bars) and infact brought down the cost for all other media too because of the huge role it plays. So it’s important to look at how TV effects the response in other media in order to assess the true vale of the investment made.
  • TV works exceptionally well with online...driving people to websites. You don’t know they are out there until you hear about them on the TV!
  • Another clear example here on TV driving people online is for There is a clear relationship between the periods of TV advertising spend and the unique visitor numbers. More and more online brands are now realising the power of TV.
  • With the onset of digital meaning tighter targeting opportunities and an increase in commercial impacts, TV is getting more efficient over time. The IPAs work demonstrated that the average increase in market share where TV is the lead medium in the 80s was 6 points back in the 1990s but this has jumped to 8.5 in the noughties. ITV, like many others, has realised the importance of this with ITV2, ITV3, ITV4 – taking advantage of the library of quality content we have and new commissions to better target and entertain our wide range of audience demos.
  • In addition the cost of using TV has fallen in real terms. According to the IPA, the relative cost of buying TV is now as low as the 1980s meaning it’s never been a better time to plan or buy a TV campaign.
  • And ITV has also seen reductions on cost, with CPTs lower than they were in 2001.
  • The IPA’s Marketing in the Era of Accountability research demonstrated that the most effective campaigns of all are those emotional ones that work by getting the brand talked about, connected with, and made famous. Such campaigns outperform others on almost every metric - especially price sensitivity and profit. Being seen to be bigger than you are and punching above your weight was a key driver of large business effects from bottom line sales to profit and loyalty. Of course, creating emotional brand connections and making brands famous are what TV advertising’s all about!! Let’s consider the success of 118 118 campaign… Over half the budget went on TV in the March 2003 campaign, and By Aug 2003 the moustached characters were national icons. In the month leading up to the 192 switch off 16.9 million calls were received. In the month after 118 118 took over 53.4 million calls were received! It was the most recalled ad since 1997 and the £11.5 million adspend generated a £45.4 million income. And the Honda Cog campaign – another talked about creative… Launched in March 2003 in ITV’s Grand Prix this ad got tongues wagging immediately. It was downloaded 2.3 million times from Honda’s website and soon became advertising legend. It was shot 606 times to get right and won 37 awards. The overall Power of Dreams campaign (which included the cog) saw worldwide sales increase from 2.6 million to 3.2 million a year. UK sales went up 28% and even sales of used Hondas increased. Following are a few clips to remind ourselves of some of the great adverts that have been on our screens over the last few years…
  • The voice and images of the M&S food ads definitely appealed to people’s emotional side of thinking about eating the mouthwatering food and as M&S said in the clip, they literally wanted people to want to lick their TV screens! For their food range M&S chose to exclusively use TV to enforce their premium positioning.
  • Whilst the M&S food ad is a great example of connecting with our emotional side, the Cadbury Gorilla ad is a great example of creating talkability and buzz. TV created that talkability and drove the viewers to watch the ad again on Youtube.
  • … and the 122 second Hovis ad is a fantastic example of successfully engaging people emotionally and also creating buzz!
  • Also in the IPA study, brands that invested in shouting louder than their competitors were seen to increase their market share. From various studies that the IPA analysed (aswell as their own) they came to the rule of thumb that for every 1 point of market share a brand seeks to gain, its share of voice needs to be around 10 points above its market share. For very successful brands they can expect to see the market share grow by 2 points for every 10.
  • …and if they aim to shout louder using TV ( which as we have seen makes other media work harder ) then their market share will increase at a greater rate.
  • TV Works methodology Dec 2003 Single source piece of research covering: FMCG purchasing TV viewing Conducted independently by TNS 3000 homes nationally 5 million purchases / 28 FMCG product categories = 243 brands 3 years of data to December 2003 / Results analysed in terms of purchase occasions ------------------------------------------------------------------------------------------------------------- Immediate Benefits This chart shows from ITV’s TVWorks Study that TV advertising is effective at all stages of a brand’s lifecycle. Within the first 4 weeks of advertising, launch brands see significant increases in sales and high interest categories see above average increases too. Although established brands see smaller % increases, these are significant in value terms due to the size and volumes already sold.
  • On a larger scale the Morrisons Xmas campaign is a great example of the immediate benefits on TV advertising…
  • Morrisons’ increase in new customers over the Christmas period emphasises how low loyal consumers are most effected by TV advertising and are the ones that drive the increases in sales. Low Loyal Brand Buyers respond most to TV advertising because: they know least about the brand TV advertising has the most to say to them These buyers are important since they may become the core buyers of your brand in the future.
  • As low loyal consumers drive the increases in sales after TV advertising, they are also heavily effected when that advertising stops.
  • The tvWorks study also highlighted the long term significance of TV advertising: Effect of TV advertising works way beyond the first month after the ad seen. For every brand bought, as a result of advertising, a consumer is likely to make 4 more repeat purchases than expected of that brand within the year. Looking at the effect of advertising in the first month alone under-values the power of TV advertising by excluding these extra purchases. Over the long-term advertising builds brand equity and value… One of the main findings from PWCs Payback Study (to be discussed in the next few slides) was that TV pays back over the long-term. In fact 45% of TV’s revenue effects are delivered after the first year of investment, with the overall effects still being felt even into the third and fourth years after investment. The TV results aren’t that surprising when you consider the long term emotional associations that come with TV advertising. For example, most of us can remember fantastic advertising from decades ago and virtually all of us still think of chocolate puddings in relation to M&S, bouncing balls with Sony and white horses with Guinness even though the ads are all over 2 years old.
  • The aim of PWCs Payback Study was to “provide an assessment of relative marketing effectiveness in the UK from an economic and financial perspective.” The project involved a mix of Econometric Modelling and Conjoint Analysis through 41 brand surveys. Econometric: Analysed volume sales across 10 years using regression/correlation analysis to attribute changes in sales to media spends. Conjoint Analysis/Brand Surveys: Asked people about their brand and willingness to pay choices to determine a hierarchy of importance people attach to each element of a brand – can therefore calculate the underlying brand strength and what price premium they can command over and above what they would be able to charge if they were a generic or commodity brand. Then correlated the brand values with the marketing investments made in the last 5 years to see which media is associated with creating the most financial value. 10 Year + Period: Looked over 10 years of data as from previous studies it has become apparent that real payback is not just short-term sales uplifts which can be unprofitable but it is at least sustained revenue gains from advertising investment. It’s the long term effects that generate real business value…
  • There are two main ways to identify and define long term payback. The first is in Longevity . The longer a brand lives, the longer the brand specific cash flows roll in and so shareholder value can be maintained. If we look at this cereal market example from the study you can see that you need to look over a period of years to really unlock the value of a brand. Over the course of a decade, many brands were born and died. Only 11% of the brands born in 1991 remain ‘alive’ today. Those brands that have lived the longest perfectly correlated with TV Share of Voice and TV spend taking the greatest % of their media spend.
  • The second way to define payback is BRAND VALUE . 60-80% of the FTSE 100 shareholder value is in the brand itself – in the intangible, the ‘magic’ that TV has helped to create. Where the payback lies in terms of brand value is in the difference between what would be paid if a product was not advertised and was just a commodity (like these value baked beans) and what IS paid for a well known and highly advertised brand. If you just have a commodity product, the sales and profit are limited. Not as many people desire it and they don’t want to pay a lot for it. If a product becomes a brand – more people desire it and a higher price can be commanded. This willingness to pay for brands was again perfectly correlated with TV spend. The higher the brand value the higher proportion of media budget went into TV.
  • Looking at the brand leaders (those with the highest brand value scores) for each of the categories and their overall media investment, you can see that they all (bar the 5 Series) used a disproportionate amount of TV than the average. TV was an endemic part of driving not only sales, but overall brand equity as well as providing more pound for pound value in terms of bottom line revenue than any other media
  • So, what else did PWC find? Overall, they found that TV is the most efficient driver of revenue with every £1m invested generating a £4.4m increase in revenue. This obviously differed massively by category and brand so returns fluctuate between 3.19 and 5.9m but overall return is nearly five times the investment which is great news for practitioners. The only other media which showed a significant level of return was press, with an average return of 3.5 million for every £1m invested. No other media showed significant levels of return. This could be down to variations in data or adequacy of the campaigns, but the most likely explanation is that investment in other media offer shorter-term returns and benefits rather than creating long-term value.
  • Anchor Butter increased their TV spend by 305% year on year and their ITV1 spend by 263%. They increased their share of advertising budget into ITV1 from 15% to 31%. This change is strategy helped lead to a 14% increase in sales – an extra £8.9 million . Those customers who were highly exposed to ITV1 contributed 90% of the additional sales value (£8 million). Those hardly exposed to ITV1 at all only contributed 10%. ITV1 has worked hard for the Anchor brand.
  • A potential recession tends to focus attention on the need to understand the long term impact of advertising and to ensure full accountability… This is a simplified model here shown at an IPA Breakfast Conference in October 2007 but what is shows is the average pattern of recovery after recession depending on different advertising spends. Growth is much faster when conditions improve if advertising is maintained or increased. Advertising presence (particularly on TV) during this time sends a strong signal to the consumer of a company’s commitment and confidence in their business and the trust or equity consumers have in the brand can be established and maintained by consistent communications. This is a time to take advantage of the competition reducing their share of voice. As their share may be less it is financially easier to shout above them! If consumers are becoming more choosy on what they spend their limited budgets on – then it is even more crucial to persuade them that your brand is the right brand!! The strengths of TV advertising in driving awareness and fame, driving sales and long term brand equity and value mean that CUTTING TV spend, even in a period of recession, can have a detrimental effect on a brand.
  • We all know that people remember advertising. Take this advertising awareness line – it goes up when the advertising starts and is still well above the pre-advertising level for some months after the advertising has finished. The same is true of sales – people can’t always go out and buy a product immediately after seeing the advertising. It may not be until the end of the month that we actually see a response to our advertising. BUT – people also forget advertising and forget about brands and choose competitors. (Remember the cereal market example with few brands that had lived longer than 10 years and the average lifespan being 4 years). Ultimately, if advertising is halted or significantly reduced then a brand will be impacted negatively in the long term. The short term savings will soon be outweighed by the longer term losses and difficulty in recovery as consumers have bought different brands / elsewhere.
  • This chart taken from ITV’s TVWorks Study shows the effects on FMCG brands when TV advertising is stopped. On average sales decline by 13%.
  • Let’s remind ourselves of this chart again… Of all advertising media, TV has the longest impact due to its mass reach, popularity and way it is consumed – bypassing the conscious part of the brain straight into the long term memory area and stimulating the emotional areas too. With this in mind, it’s not surprising that to cut TV spend will have an even greater effect on the success of a brand when market conditions recover.
  • Continued TV investment helps maintain brand thrust, particularly in times of economic instability. Brands can build market share at a lower cost than when the market is growing. It sends a strong signal to consumers and maintains brand equity Ultimately, any reduction in short-term financial performance is soon outweighed by increases in revenue and profit when market conditions start to improve, leaving businesses more buoyant and in a better position to compete in a stronger market. Research conducted by the London Business School showed that the most successful companies maximise long-term shareholder value by maintaining their advertising investment when the economy slows down and their weaker competitors cut back.
  • Fame Ratings 2005 Methodology pioneered by BBH in the US and licensed to ITV in the UK 130 Brands 3,180 Face-to-face interviews in home Conducted by NOP World ---------------------------------------------- OMD Metrics quantifies the effect of every strand of marketing activity, from spots to sponsorship, word of mouth to leaflets, direct response to brand/Corporate activity and integrates the results forward into future communications and business planning PIMS - Analysis of competitive strategy. Part of business culture: numerous strategy books draw from the fundamental PIMS principles. Their approach clearly quantifies how non-financial measures like customer value and market structure drive performance. Pravda - A joint initiative from PIMS and OMD, sourcing marketing data at a more granular level. Pravda allows examination of how communications strands impact on Key Performance Indicators (KPIs) such as market share, sales growth, long-term profitability, consideration and spontaneous awareness.
  • Methodology Each panel household was given set top meters to record their TV viewing and a bar code scanner to collect the details of all grocery products brought into the home. All brands within the 28 FMCG categories which had been active on TV were selected giving a database of 243 brands. Thus there was no bias in the brands chosen and it was “the world as found”. The research looks at the effects of advertising in the first month after it was seen. The effect of TV is calculated by comparing the number of purchase occasions of brand X in homes that saw advertising for that brand in the last 28 days with the number of purchase occasions of brand X in matched sample homes that did not see advertising. So, if the homes seeing Brand A's advertising are responsible for 210 purchase occasions of Brand A, and the homes which did not see Brand A's advertising are responsible for only 200 purchase occasions, the difference is +10 in favour of the group that saw TV advertising. This represents +5% incremental uplift on the "expected" level of purchasing of 200 and is attributed to the effects of TV advertising. The uplift can be attributed to TV advertising because the effects of price promotion, previous brand loyalty & weight of viewing have been removed by the matched sampling.
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    1. 1. The Case for TV: <ul><ul><li>TV is as popular as ever </li></ul></ul><ul><ul><li>TV amplifies other media and works across platforms </li></ul></ul><ul><ul><li>TV remains the most effective medium </li></ul></ul><ul><ul><li>TV pays back </li></ul></ul>
    2. 2. TV is as popular as ever! Source: IPA Touchpoints Hub Survey (other media) and BARB for TV – Monthly Reach by Hour Monthly Reach by Hour
    3. 3. TV viewing hours unchanged for 15 years Source: BARB/TNS Infosys – Individuals Average Daily Hours Viewed
    4. 4. TV is constantly on the consumers radar! Source: Television Opinion Monitor Q1-Q2 2007/ Sample – UK adults (1224) Bringing up Children 24% Crime, Law and Order 25% Cost of Living 26% Family and Friends 34% Sport 25% Television Programmes 29%
    5. 5. The DTR has enhanced TV viewing <ul><li>Sky+ homes watch 20 mins more TV per day and 21% more commercial TV than non-Sky+ homes </li></ul><ul><li>Most viewing is still live (88%+) in pvr homes </li></ul><ul><li>Most time-shifting programmes watched on same day as recording </li></ul><ul><li>42% of time-shifted breaks viewed at normal speed </li></ul><ul><li>DTRs increase commercial impacts by 5%! </li></ul><ul><li>Thinkbox 2007 Engagement Study found a much higher concentration on the TV screen when commercials are being Fast forwarded </li></ul>Source: BARB, ACB/LBS and Skyview, Thinkbox
    6. 6. <ul><li>One flat-screen TV sold every six seconds </li></ul><ul><li>Over 3 million sold in 2006 </li></ul><ul><li>Average screen size growing by an inch per year </li></ul><ul><li>45% of new TVs bought in last year cost £500+ </li></ul>Consumers are investing in TV The ‘celebration’ bit...
    7. 7. TV and ad content delivered via the internet Hard disk based on demand and interactive services & advertising EPGs, Sky Active menus Interactive TV services and ads Server based on-demand services and ads Personal Video Recorders (PVRS) Video On Demand (VOD) Internet Protocol TV (IPTV) Interactivity Guides & Interfaces Mobile TV Server, broadcast and download based mobile content services New Functionality Supporting TV Viewing
    8. 8. ITV has the unrivalled ability to create viewer response and engagement Source: BARB/ ITV Consumer/YouTube (Youtube average 647,000 views per video), ITV Interactive Tracker 30 million+ Top 20 video views of George Sampson on YouTube: 4,850+ George Sampson videos on YouTube: 1 million+ Red button interactions: 16.1 million TV ratings for final of Britain’s Got Talent: 1 million Approx. competition entries to win tickets to the shows: 50,000 Approx. applications to enter the show’s auditions:
    9. 9. 0800 On bus read Piers Morgan’s blog via BGT WAP site 0900 Catch-up on latest goss in Friend’s Reunited BGT group 1100 E-mail clips to my friends from 1300 Lunchtime catch-up show on ITV2 1930 Share mobile clip in pub with friends 2100 The show! 2145 Vote via Red Button. Please don’t let Paul go out just yet. 2200 Talent Extra on ITV2 1630 Watch exclusive behind-the-scenes video on 1500 Watch best clips on BGT branded You Tube channel 1800 Receive email newsletter with link to show preview TV content works across many platforms ITV 360° - The Viewer Experience
    10. 10. Engagement with TV Content Online % Done in last 6 months Source: nVision Research – The Future Of TV - Base: All Internet users aged 15+, 2007
    11. 11. The young are still spending more time with TV Source: TV – BARB 01Jan-12Oct08 / Press – TGI Q3 2008 / Radio – RAJAR Q2 2008 / Internet – Comscore Aug 2008 1534 - Daily Minutes Viewed / Visited * Each bar is based on the people viewing, listening or accessing each medium.
    12. 12. … and they are less ad averse % Agree Source: Other Lines/TGI
    13. 13. 15-34s - Daily Reach Source: TV – BARB Weeks 1-41 2008, 3+ mins reach / Press – TGI Q3 2008 / Internet – Comscore Aug 2008 Reach in millions Page
    14. 14. 16-34 viewing has remained consistent… Weekly Reach in Millions Source: BARB/TNS 2003-2008
    15. 15. … and they are switched on for just as long Average Daily Hours Viewed Source: BARB/TNS 2003-2008
    16. 16. TV Amplifies Other Media
    17. 17. The true return of each medium needs to be identified… Source: Mediacom / Thinkbox Event / Example Client
    18. 18. TV can drive consumers online “ You may not believe this but last week I stood in front of a major media agency and 50 or so of their clients and sold TV. I told them that TV & search are highly compatible & that money should be taken from below the line and pushed back into TV alongside (obviously) massive growth in search. This is a common theme of mine as we see huge spikes in query volume following TV exposure both editorial & ads.” Mark Howe, MD Google Media Sales
    19. 19. Media Spend - £ Unique Users – 000’s Source: Comscore and NMR Ad Dynamix TV Spend and Unique Users Relationship
    20. 20. TV is becoming more effective over time The launch of multi-channel is making it easier to reach consumers Average market share gain (% points) where TV is the lead medium Source: IPA - Marketing in the Era of Accountability
    21. 21. TV prices have continued to fall in the last 7 years Real CPT (1985 = 100) Year Base 100 = 1985 Source: IPA - Marketing in the Era of Accountability The rise of multi-channel means more competition making TV more cost efficient
    22. 22. ITV1 prices have continued to fall in recent years Real CPT (2001 = 100)* ITV Costs indexed against 2001 Year Base 100 = 1985 Source: ITV Salesnet, CPTs indexed on 2001 figures
    23. 23. TV Pays Back !
    24. 24. Thinkbox: Payback in the Third Age of Television
    25. 25. The Main Drivers of TV Effectiveness and Value <ul><li>Amplification of Other Media </li></ul><ul><li>Fame and Awareness </li></ul><ul><li>Emotional and Implicit Associations </li></ul><ul><li>Immediate Benefits and Long Term Value </li></ul>
    26. 26. The Power of Emotion and Fame
    27. 28. Case Study : <ul><li>2006 - £45 million advertising campaign </li></ul><ul><li>Food category – exclusively TV </li></ul><ul><li>Every execution outperformed branding and recognition tracking norms </li></ul><ul><li>National stampede on hot chocolate puddings ! </li></ul><ul><li>Food sales up 8.4% </li></ul><ul><li>Halo Effect - UK sales up 9.1% </li></ul>Source: Guardian, Campaign, Marketing, Telegraph, FT Nov-Dec 2007 IPA Grand Prix and Gold Winner 2006
    28. 29. Case Study : <ul><li>Started in August 2007 </li></ul><ul><li>Initially multimedia – then 100% TV </li></ul><ul><li>Youtube received 500,000 page views in the first week ad went on air </li></ul><ul><li>By end November 2007 had been viewed over 6 million times </li></ul><ul><li>Weekly sales up 9% year on year during period on air </li></ul><ul><li>Exceeded revenue growth targets of 4-6% </li></ul>Source: Guardian, Campaign, Marketing, Telegraph, FT Nov-Dec 2007
    29. 30. Case Study: Hovis <ul><li>TV’s longest commercial: </li></ul><ul><li>122 seconds </li></ul><ul><li>Launched in Coronation Street </li></ul><ul><li>3 fold increase in buzz around the brand </li></ul>Source: Media Week 14Oct08
    30. 31. Source: IPA - Marketing in the Era of Accountability Oct 2007 % Brands that shout louder grow faster!
    31. 32. TV enhances campaign efficiency Market share % point gain per 10% point excess share of voice Source: IPA - Marketing in the Era of Accountability
    32. 33. TV leads to greater business successes % Reporting very large business effects over the last 26 years Source: IPA - Marketing in the Era of Accountability
    33. 34. Immediate Benefits and Long Term Value
    34. 35. % Increase in FMCG purchasing within 4 weeks Source: TNS Mediaspan, database of case studies, 1995-2002 On average, TV Advertising generates a 4.4% sales uplift within 4 weeks Avg: 4.4% New brands Established brands For large established brands & staples, % sales growth is much smaller but in £s is significant TV advertising works very well to drive sales of launch brands Brands in high interest categories e.g. Toiletries, Ready meals tend to show higher than average % sales growth
    35. 36. Case Study : <ul><li>December 2007 campaign – 2 weeks ITV1 Wales only </li></ul><ul><li>Budget under £15,000 </li></ul><ul><li>Campaign seen by 1.3 million adults </li></ul><ul><li>Footfall raised by 20% when most Cardiff retailers struggling </li></ul>Source: ITV Wales – December 2007 “ This was the first time we’d been on TV for over 10 years and the help and service we received from ITV throughout the entire process was second to none. We worked with a production company who produced a high quality product at a very good price and the results were fantastic. Although television is a more expensive option it was well worth it .” Mark Nott, General Manager Gloomy Christmas promises miserable new year for retailers
    36. 37. Case Study : <ul><li>£14 million national TV campaign </li></ul><ul><li>Christmas ad featuring Lulu, Denise Van Outen etc </li></ul><ul><li>Strongest Xmas results ever delivered </li></ul><ul><li>Double level of growth than Tesco, Sainsburys, Waitrose </li></ul><ul><li>4 million more shoppers attracted over 6 weeks to 06Jan08 </li></ul><ul><li>Year on year sales up 9.5%, and operating profit up 50% </li></ul>Source: Telegraph, Guardian, IGD Retail Analysis Feb 2008
    37. 38. Low Loyal Consumers respond most to TV Advertising % increase in purchasing in first 4 weeks Source: tvWORKS, Jan01-Dec03, saw at least 1 spot in prior 28 days, loyalty reflects spend on brand as % of spend on category, low loyal = 0-10%, medium loyal = 10-39%, high loyal = 40-100% tvWorks Contribution to Sales Uplift 57% 27% 15%
    38. 39. Low Loyal consumers are most effected by the absence of TV Advertising Sales index Minimum days elapsed since advertising was last seen Source: tvWORKS, 2 years to Jan03, loyalty reflects spend on brand as % of spend on category, low loyal = 0-10%, high loyal = 40-100%, the sales index compares the amount of purchasing of the brand at each point in time to the amount of purchasing at the control
    39. 40. The effects of TV last for a longer term <ul><li>Nearly 45% of TV’s revenue effects are delivered after the year of the investment. </li></ul>Source: PWC/Thinkbox – Payback Study Oct 2007
    40. 41. Thinkbox and PWC analysed long term effectiveness Source: PWC/Thinkbox – Payback Study Oct 2007 Car Insurance Auto x 3* Hair-care Fruit Juices Cereal *lower medium, upper medium, premium exec 706 brands, 10+ years of data, 41 brand surveys, 7 categories (significant spend, various price points) volume, pricing & ad data
    41. 42. Longevity is key to long term value. Most brands are short lived. Source: PWC/Thinkbox – Payback Study Oct 2007 Take the cereal market as an example… born post ’91 & dead pre ‘06 born post ’91 & alive post ‘05 born pre ’91 & dead pre ‘06 born pre ’91 & alive post ‘05 11% 4.1 years 7.2 years 8.9 years 14.5 years Lifespan 49% 25% 15%
    42. 43. Brand value is just as important as longevity Source: PWC/Thinkbox – Payback Study Oct 2007 49p 400m per year 31p 1m per year
    43. 44. TV core medium for nearly all leading brand value owners £m Source: PWC/Thinkbox – Payback Study Oct 2007
    44. 45. TV investment delivers a clear increase in revenue On average a £1m increase in TV investment yields a £4.5m increase in revenue Source: PWC/Thinkbox – Payback Study Oct 2007
    45. 46. TV and ITV1 has clearly helped the Anchor Butter brand to grow… £3.9m £6.5m (+68%) <ul><li>Anchor sales up 14% from £65.6 million to £74.5 million </li></ul><ul><li>Those highly exposed to ITV1 accounted for 90% of the increase in sales value…. </li></ul><ul><li>…spending over a third more on Anchor than those with very little exposure to ITV1 </li></ul>Source: NMR Own Costs and TNS Worldpanel Sales for Anchor BUTTER Brand Set (Highly exposed to ITV1 = would see 90% of any advertising exposures as calculated by weights of viewing by daypart/dayand frequency) Anchor Share of Spend 2007 vs 2008 ITV1 spend up 253%
    46. 47. TV Pays Back! <ul><ul><li>Immediate effects on sales at all stages of a brand’s lifecycle </li></ul></ul><ul><ul><li>4.4% increase in FMCG sales within the first 4 weeks of TV advertising – with 4 more repeat purchases </li></ul></ul><ul><ul><li>Lead medium for most successful brand value owners </li></ul></ul><ul><ul><li>Delivers its value over a much longer time frame (45% after year 1) – which is financially useful </li></ul></ul><ul><ul><li>A £1 million increase in TV investment yields a £4.5 million increase in revenue </li></ul></ul>Source: PWC/Thinkbox – Payback Study Oct 2007 / tvWorks Dec 2003 / IPA Marketing In The Era of Accountability 2007
    47. 48. TV remains central in the lives of consumers and in the success of brands <ul><li>TV still as popular as ever and so drives emotional associations between brands and consumers </li></ul><ul><li>TV amplifies other media works on many platforms </li></ul><ul><li>TV pays back… </li></ul><ul><ul><li>Immediate sales benefits </li></ul></ul><ul><ul><li>Long term brand and shareholder value </li></ul></ul><ul><li>ITV remains the nation’s most popular commercial channel </li></ul>
    48. 49. The Case for Continuous TV Advertising
    49. 50. Consumers are making careful brand choices, staying in more and watching more TV so now is the time to take advantage of, and get an advantage with, TV advertising 41% going to pubs or restaurants less Source: GfK NOP July 2008 38% cutting down on travel plans
    50. 51. Effects of Advertising During Recession Source: Profit Impact of Marketing Strategy, IPA Breakfast Conference 18 Oct 2007, Data2Decisions Share % change in first 2 years of recovery Advertising during recession
    51. 52. People remember advertising… … and people forget advertising 30 20 10 0 250 0 GRPs 1½years Advertising awareness
    52. 53. No TV Advertising for a year produces a 13% decline in Purchasing Minimum days elapsed since advertising was last seen Sales index Source: tvWORKS, 2 years to Jan03, the sales index compares the amount of purchasing of the brand at each point in time to the amount of purchasing at the control (when advertising had been seen in the last 28 days).
    53. 54. The effects of TV last for a longer term <ul><li>Nearly 45% of TV’s revenue effects are delivered after the year of the investment. </li></ul>Source: PWC/Thinkbox – Payback Study Oct 2007
    54. 55. £m TV Helps Maintain Brand Thrust <ul><li>During a recession… </li></ul><ul><li>Build market share at lower cost </li></ul><ul><li>Strong signal of commitment and confidence in brand </li></ul><ul><li>Increased revenue & profit when conditions improve </li></ul><ul><li>Increase/maintain ad spend = maintained shareholder value </li></ul>Source: Paddy Barwise/London Business School, ‘Advertising in a Recession’, 1999.
    55. 56. Appendix – extra charts
    56. 57. Fame Metrics 2006 - Objectives <ul><li>A continuation from the Fame Ratings project of 2005 pioneered by BBH and licensed to ITV </li></ul><ul><li>Statistical analysis of the 110 brands rated in the 2005 Fame Ratings project: </li></ul><ul><ul><ul><li>Market share </li></ul></ul></ul><ul><ul><ul><li>Communications spend </li></ul></ul></ul><ul><ul><ul><li>Purchase frequency </li></ul></ul></ul><ul><li>Test effects of brand fame on profitability and market share </li></ul><ul><li>Explore the roles of different media in driving fame </li></ul><ul><li>3 key industry specialists used: OMD Metrics, PIMS and Pravda </li></ul>
    57. 58. TVWorks Study <ul><li>Single source piece of research covering: </li></ul><ul><ul><li>FMCG purchasing </li></ul></ul><ul><ul><li>TV viewing </li></ul></ul><ul><li>Conducted independently by TNS </li></ul><ul><li>3000 homes nationally </li></ul><ul><li>5 million purchases </li></ul><ul><li>28 FMCG product categories = 243 brands </li></ul><ul><li>3 years of data to December 2003 </li></ul><ul><li>Results analysed in terms of purchase occasions </li></ul>