A new econometric analysis released by the UK Radio Advertising Bureau (RAB) and conducted by Holmes & Cook has found TV to be the most efficient medium for brands in terms of return on investment (ROI), with radio coming in second. The extensive study – which leveraged data shared by all of the major agency groups including Havas Media, IPG Mediabrands, and Starcom Mediavest – indicates that the average ROI for brands on TV is £8.70, with radio’s ROI coming in at £7.70.
The study notes that the ROI figures relate to revenue return on investment rather than profit ROI, as the former was the most-reported measure. The study measured 2,000 separate media campaigns relating to 517 advertising campaigns and more than £2.5 billion in spending
Following TV and radio in ROI were press (£5.80) and online (£4.90), with outdoor bringing up the rear (£2.00).
Given that the study was sponsored by the RAB, it takes a close look at ROI on radio, finding the figures to vary widely by sector. The retail sector fared best, with an average return of £18.90 for each pound spent advertising on radio. Health and fitness advertisers, though, averaged just £0.90 in return for each pound spent.
Limiting the analysis to media where there were at least 5 reported observations (and where comparisons between media could be made), the study found that radio offered a higher ROI than TV for automotive, leisure and entertainment, retail, travel, and FMCG brands.
About the Data: Full – and extensive – details surrounding the study’s methodology can be found by following the link above.