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Scalability: why TV's on top

Scalability: why TV's on top

We all know the importance of a scalable business plan in a company’s early days. A vital part of this is a scalable marketing plan. A recent study on behalf of Screenforce* shows that even at higher investment levels TV advertising brings in incremental ROIs. Furthermore, standard ROI comparisons between advertising media now require a rethink.

What is scalable marketing?

Scalable marketing is essentially a communications plan which has the ability to grow and perform consistently under expansion once ROI has been established. Often scalable marketing has some level of automation or features measures that can be effectively outsourced once they have been mastered internally.

Perhaps the best way to understand what scalable marketing is to define what it is not. PR or trade shows, for example, are difficult to scale. Building quality relationships with the press or at trade events is something that takes time and is best undertaken by a small number of people. There are only ever a select number of publications who are interested in your company’s news, or trade events organised each year. Even though they are powerful, one-on-one conversations aren’t scalable.

Why is scalability important?

Start-ups have the greatest need for scalability because they are the ones with the biggest potential for growth. They are the organisations that have to be more careful with the limited resources they have and the ones that need to pivot quickly as the market reacts to their product.

This is not to suggest unscalable methods are unimportant. Indeed many commentators believe that in the earliest stages, startup founders should be focusing on the „grind“ – answering questions online, reaching out to micro-influencers and manually building a relevant social audience. One of the best examples here is AirBnB – the company realised the value of a professional photo in renting a property so in the early days AirBnB staff went out and took professional pictures of properties themselves.

But when a company starts to grow, so should its marketing strategy – and the ROI needs to increase. This is where scalable marketing methods come in.

TV: A scalable channel

Surely the ultimate scalable channel is digital? The variety of target-group specific environments and frequency of impressions is infinite. The opportunity to automate is extensive. And if one ad results in 10 customers, theoretically 10 ads will convert 100 customers, right? Multiply your spend further and suddenly you’re converting thousands of customers.

If you look purely at classic ROI, digital looks enticing. In many studies researching media effectiveness and efficiency by comparing the ROI of different channels, Facebook, YouTube or even Search often achieve a higher ROI than TV. But only looking at ROI is somewhat misleading. Returns from smaller digital measures are often compared to higher TV investments. Media ROI is scalable to different degrees. The decisive factor is not the ROI at a given investment level, but the incremental ROI that each additional advertising Euro brings.

This is the conclusion of the “Beyond ROI” study which Screenforce has undertaken with facit Research. Based on eight campaigns from the retail and finance sectors, the study shows that the effect of TV advertising is particularly scalable. Even with high investment, the additional revenue generated by TV advertising shows clear increases. The effect of other media reaches saturation much faster and higher investments hardly achieve any incremental ROIs.

Source: Facit Research and Plan.NetBI on behalf of Screenforce

Every growth company should consider how to grow its marketing, and as a result, its turnover. With higher investments, the unrivalled scalability of TV is a great place to start.

*Screenforce is an initiative of 12 TV marketers in Germany, Austria and Switzerland for television and video. Read the study Beyond ROI here.