Online video delivers 50% higher ROI than TV ads claims YouTube with econometric findings

YouTube is using Ad Week Europe to underline the change in consumers’ media consumption patterns with a study claiming that online video ad units deliver up to 50 per cent more return on investment (ROI) when compared with TV.

To add credibility to its claims that online video adds a higher ROI than TV, the online video sharing service has paired with Dentsu Aegis Network-owned consultancy Data2Decisions to apply Market Mix Modelling and Ecosystem Modelling techniques of analyse the sales impact of YouTube, as well as identifying the optimal level of spend through budget optimisation simulations.

The analytics firm concluded that brands should invest more of their media budgets on YouTube. Specific points in the study included:

1. At current budgets, online video delivers 50 per cent higher ROI than TV advertising - this also holds true for YouTube

2. In the studies completed so far, the YouTube investment should be increased by between two and six times

3. In the optimised media budgets, between five per cent and 25 per cent of the total AV budget should be invested in YouTube

Paul Dyson, founder of Data2Decisions, added: “We have been modelling online video for clients throughout the past five years and our experience consistently finds higher ROIs from online video compared to TV.

So it was no surprise to see this repeated in the studies we conducted with Google.

“We used traditional industry accepted MMM techniques but supplemented these with our own Ecosystem Modelling approach allowing us to separate out YouTube from other online video platforms. This produced the same findings we have found in the past – higher YouTube ROIs with optimisations across a range of clients suggesting spend should be two-to-six times higher.”