A report by Google that analyzed ad campaigns in eight countries shows that YouTube ads were a lot more effective than television ads when it comes to driving sales in 80 percent of the cases studied. They concluded that advertisers should allocate as much as six times more of their advertising budgets to YouTube than they do at the moment.
For the report, researchers analyzed 56 case studies from brands in six industries over the past three years. One of the companies that Google hired to carry out the analysis was MarketShare. The firm’s Lucien van Hoeven said: “We found 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.”
Some of the other research companies that participated were BrandScience, GfK, Kantar Worldpanel, and Data2Decisions.
The study was published today to coincide with the Advertising Week Europe that is currently being held in London. It also supports research that was released yesterday indicating that online videos bring a 50 percent higher return on investment than TV ads.
YouTube gave several examples that illustrate its point. For example, yogurt company Danone noted a return on investment that was two or three times higher from YouTube compared to TV for each euro it spent, while chocolate brand Mars noted double the return on investment for each pound it spent to reach the main shopper on YouTube compared to TV.
Last year, Google told advertisers that they should shift almost a quarter of their TV budgets to YouTube if they wish to reach younger audiences.
TV industry fires back at report
The report has drawn the ire of the TV industry. Thinkbox’s research and planning director Matt Hill points out that TV advertising can build brands better than other options and also generates the most profit.
His firm also believes that brands that increase their YouTube spending could find it working against them because most of the site’s viewing is done by a fairly small audience and the type of content found there is significantly lower in quality than that which advertisers typically want their name to be associated with.
A study commissioned by Thinkbox in 2014 showed TV was “the best profit generator”, bringing in £1.79 for each £1 spent on advertising during the years between 2011 and 2014.
Nevertheless, YouTube continues to draw in high-quality advertisers in bigger numbers each year, and the trend shows no signs of letting up.
