Recent findings from the “Profit Ability 2: The New Business Case for Advertising” study shed light on the remarkable efficacy and value of audio advertising in today’s dynamic media landscape.

Conducted under the auspices of Thinkbox and bolstered by data from industry giants such as Ebiquity, EssenceMediacom, Gain Theory, Mindshare, and Wavemaker UK, this extensive study provides a fresh perspective on advertising profitability in the post-COVID era. The study covered £1.8 billion of media investment in the UK across 10 media, 141 brands, and 14 categories.

Profit Ability 2 analysed the profit generated by advertising at different stages as its effects build over time. It examined four speeds of payback:

  • Immediate payback – within one week
  • Short-term payback – up to 13 weeks – i.e. includes immediate payback
  • Sustained payback – week 14 through to 24 months
  • Full payback – total payback 0-24 months

A comprehensive new study on advertising effectiveness has demonstrated that advertising serves as a lucrative catalyst for business expansion, showcasing that all advertising formats yield positive returns, particularly when considering their long-term effects.

Audio’s Remarkable Performance

Despite television’s continued dominance in ad spend, the study uncovers the unique power and value of audio advertising. Representing 6.2% of total advertising investments, radio and streaming platforms generate a 6.9% share of full payback, underscoring audio’s distinct ability to deliver consistent returns over time.

Financial Metrics Speak Volumes

Delving deeper into the financial specifics, the return on investment (ROI) metrics paint a compelling picture of audio’s superiority as an advertising medium. The full payback ROI for audio stands at an impressive £4.98, meaning advertisers see nearly five pounds in return for every pound spent over the analyzed period. This figure firmly positions audio ahead of Broadcast Video On Demand and several digital formats, including online display and video, paid social, and generic pay-per-click ads, sparking excitement and motivation to explore the potential of audio advertising.

In terms of short-term gains, audio boasts an ROI of £2.47, surpassing all television and digital competitors. Moreover, regarding sustained payback, which measures long-term impact and brand building, audio contributes 6% to the profit volume, highlighting its role in maintaining consumer engagement over time. With an 8.2% share in short-term payback, audio advertising demonstrates an impressive ability to drive immediate consumer action.

Source: Thinkbox website

Key Findings from the study

  • Profitability Across Media: The study reaffirms that advertising is a profitable driver of business growth across all forms of media, especially when considering sustained effects.
  • Time Matters: 58% of advertising’s total profit generation occurs beyond the first 13 weeks, highlighting the importance of sustained campaigns.
  • TV Dominance: Television continues to dominate in full payback and is responsible for 54.7% of the full advertising-generated profit, with an average full profit ROI of £5.61 for every pound spent.
  • Audio’s Effectiveness: Despite its relatively modest share of total advertising investment, radio and streaming yield a 6.9% share of full payback, emphasising audio’s effectiveness in delivering solid returns over time.

As the advertising landscape continues to evolve, audio advertising is poised to play an increasingly prominent role. Its ability to deliver immediate returns and sustained brand impact makes it a valuable addition to advertisers’ media strategies, offering a balanced approach amidst digital shifts and changing consumer habits.

The Profit Ability 2 study underscores the potency of audio advertising in driving business growth and emphasises its significance in today’s multi-channel advertising ecosystem. Audio advertising is a compelling choice as advertisers seek effective ways to engage audiences and maximise ROI.

Source: Thinkbox website