New research from Thinkbox in the UK focuses on the effectiveness of TV advertising investment for new to TV advertisers.
Media response curves from the research capture the sales impact at different budget levels and show the relationship between spend in a given advertising channel and potential sales from that investment. As spend increases, the marginal impact you will get back from that investment will eventually become smaller as it starts to reach the same people and have less effect – i.e. saturation.
Some channels are highly effective at low spend levels but saturate quickly, as in the example of the dark blue line.
Other channels saturate much more slowly, which means that they have greater potential to drive growth (e.g. pink line).
Some channels are highly effective at low spend but saturate quickly as they have limited reach and scale. People spend lots of time watching TV and it reaches lots of people, meaning it hits diminishing returns at higher levels of spend than other channels. For brands whose key objective is growth, TV becomes essential once the effect of other channels has saturated. These curves are important for media planning and optimisation and can be used to maximise profit from marketing.