Econometric studies measure the sales impact of YouTube
Posted on 18th April 2016
Data2Decisions has released the findings of econometric studies to measure the sales impact of YouTube advertising. One of six third-party data analysis companies involved in the research for Google, Data2Decisions conducted its studies across a range of brands in the UK, US, Canada and Australia using Market Mix Modelling and Ecosystem Modelling. The evaluation was complemented by budget optimisations to understand the optimal level of investment in YouTube to boost overall ROI.
Paul Dyson, the Founder of Data2Decisions said, “We have been modelling online video for clients throughout the past five years and our experience finds higher ROIs from online video compared to TV. So it was no surprise to see this repeated in our latest studies. This does not mean all video budget should be moved into YouTube since ROIs reduce as budgets increase due to diminishing returns. However it does mean that in these cases YouTube should take a larger proportion of the budget.
“We used traditional industry accepted Market Mix Modelling techniques but supplemented these with our own Ecosystem Modelling approach, which allows 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 2 – 6x higher,” said Paul.
Findings from the Data2Decisions studies include:
1. At current budgets, online video and YouTube specifically, delivers 50% higher ROI than TV advertising
2. Online video, and YouTube specifically are effective but saturate at lower spend levels than TV
3. For the brands included in the study, the YouTube investment should be increased by between 2 and 6 times to achieve optimal returns
4. In the optimised media budgets, between 5% and 25% of the total AV budget should be invested in online video
Read our case study for Guinness UK.
For further information on the studies, or tailored advice on budget allocation, contact Data2Decisions.