Who’s the winner when directly comparing digital and traditional channels? A recent MediaPost report broke down average Return on Ad Spend (ROAS) of different media channels, providing a glimpse into the hard numbers behind the channels.
How was average ROAS calculated?
This report looks at the average ROAS per $1 spent, meaning the gross revenue generated by a single dollar of ad spend, benchmarked across 200+ campaigns measuring a total of over $500 million in media spend.
Why it matters.
Amid economic uncertainty, marketers face greater pressure to prove real business results from their ad budgets. Knowing which channels have the higher ROAS can help marketers make a notable impact on their businesses’ bottom lines by driving more shoppers to their stores, boosting sales, or growing their market share.
So when it comes to ROAS, which wins? CTV or linear television? Let’s compare and find out, then take a quick look at the one channel that offers a higher ROAS than all others.
CTV vs. Linear Television
As a digital channel, CTV offers measurability, targeting, and omnichannel integration that traditional TV just can’t match, all at a lower CPM. Even when a traditional TV ad drives someone to the store to make a purchase, that sale can’t be easily tracked and attributed back to a specific ad. Traditional TV ads can’t be targeted to precise, behavior-based audiences; they just appear in predetermined markets and time slots. Finally, traditional TV is more difficult to integrate in a full-funnel approach with other channels, while CTV can be utilized along with other channels like Digital Out-of-home, Digital Audio, or Mobile easily in GroundTruth Ads Manager.
But how do they stack up in ROAS? See for yourself:
That’s right. For every dollar spent, the CTV’s average return on ad spend was nearly $6, almost three times higher than that of Linear TV. Sure, Linear TV can offer a lot of impressions, but is it worth the cost, especially as ad budgets are being stretched thin? CTV platforms allow marketers to reach the same number of people in a much more targeted fashion at a lower cost. What’s more, CTV viewership is growing fast. Today, more than 75% of total video streaming hours are spent on ad-supported channels, up from 58% just last year.
ROAS alone might make a compelling case for boosting CTV budgets, but add in the audience targeting, lower cost, and access to digital metrics, and it becomes an obvious choice for marketers trying to get the most from their budget.
Digital Audio is the Biggest ROAS Winner
Digital Audio is in a unique position in today’s media landscape. Though it accounts for just 2.4% of total advertising spend, US population spends more than 11% of their total daily time with media listening to digital audio, revealing a severe advertising underinvestment and an opportunity for advertisers to take advantage of this untapped channel.
In the US alone, over 228 million listeners tune in for an average of 1 hour and 24 minutes every single day, and advertisers are discovering that listeners are very receptive. A fast-growing CPG brand observed a 50% increase in sales lift over baseline after adding digital audio ads to their media mix.
As ROAS goes, Digital Audio is a clear winner. Of all the media channels discussed in MediaPost’s article, Digital Audio offered up the highest overall ROAS, clocking in at $10.73 for every $1 invested.
Why? Chalk it up to targeting, measurability, and omnichannel integration. For example, the Digital Audio offering in GroundTruth Ads Manager offers precise location targeting, access to digital metrics, direct attribution to real-world sales and foot traffic, and easy integration with other programmatic media channels available in our platform, such as CTV, Mobile, Desktop, and DOOH. Our Digital Audio advertising platform allows marketers to serve ads to highly engaged audiences through streaming music platforms, streaming radio stations, and podcast platforms.
Audiences are always evolving. What worked last quarter may not this quarter, and as marketers feel the pressure to deliver with their ad budget, it’s important to invest where it matters. ROAS may not be the sole indicator of a channel’s efficacy, but when you need your campaign to drive real business results, it’s among the first places you should look.
Interested in building a campaign using CTV, Digital Audio, or a blend of both? Create a GroundTruth Ads Manager account today and launch your first campaign in minutes (no minimum spend required!) or if you’d prefer to chat more, reach out to us.
