Online electricals retailer AO.com is to turn off TV advertising and focus on digital campaigns instead.
The online retailer will abandon TV as a medium within months, founder and chief executive John Roberts said at Retail Week Live today.
Rogers confirmed that the company plans to cancel all TV advertising for the year ahead and hire more than 100 new tech experts.
When asked by Facebook President EMEA Nicola Mendelsohn CBE about the company’s marketing strategy, he said: “We’ve made the decision for the year ahead to cancel all TV advertising. As we do more and more analysis of it, we can see the return on investment is higher when telling stories.
“If your business doesn’t provide an amazing service, then social media isn’t for you – but we empower our teams to use social media and some of the programmes we’ve done have been phenomenally successful. It’s not about selling stuff, it’s about engaging in interesting conversations – give something fun and useful first and then, as an output of that, you get a transaction. TV advertising shouts at people. It won’t work. Social media is a completely different discipline.”
And when quizzed on AO’s recent announcement to hire 50 new tech experts, Rogers replied: “We actually agreed at our board meeting yesterday to double that. I’ve never seen the demand on IT as a graph go down. So, given how ambitious we are a business in our eco-system, it’s something we need to invest in ahead of the curve. All roads lead to tech, so we should be investing in it with every pound we have, and one more.”
AO is understood typically to have had an annual TV ad spend in single-digit millions, and formerly sponsored ITV prime-time show Britain’s Got Talent – a deal worth around £6m.
Its decision reflects a wider shift, as companies increasingly adopt digital channels to engage with consumers.