When we run a heavy TV schedule, we see a lift in sales and product awareness. We need to run two weeks of digital to get the reach of one day of broadcast. TiVo Research found a direct correlation between a decrease in TV ad spend and a decrease in sales and a long-term research report from Accenture Strategy showed similar results; not only does advertising on multiplatform TV have a measurable, long-term impact on driving incremental sales, but also significantly enhances the impact of digital advertising.
So if you are considering shifting more spend to digital next year, add back television. Advertising is more likely to be encoded in long-term memory if your audience encounters unified creative messaging in multiple media, especially when it is the media, that has the proven ability to emotionally and rationally connect with your audience through premium, high-quality audio visual content. Related Posts. People who live on opposite sides of a DMA border tend to be similar in terms of product preferences and other factors that may affect demand.
So if a firm ran a commercial in one DMA but not the neighboring DMA, the researchers could check whether sales in the ad-exposed side of the border rose.
The median elasticity across all products was 0. This figure was an order of magnitude lower than several estimates from previously published meta-analyses; those studies had suggested sales increases ranging from about 9 to 24 percent for every doubling in ads.
One possible reason for the disparity is the bias toward publishing case studies with positive results, Tuchman says. Tuchman speculates that this difference may be due to the fact that consumers today might not pay as much attention to TV ads. Many people now read their phone or tablet during commercial breaks.
The researchers also estimated how many brands saw any positive effect of TV ads on sales at all. The team then wanted to calculate ROI—that is, how much firms actually profited from the advertising after accounting for the expense of buying the ads.
This analysis presented some challenges because it required two additional pieces of data: the cost of each ad and the profit margin on each item. The team estimated ad expenses based on average-advertising-costs data. They also calculated ROI for each brand multiple times, considering a range of realistic profit margins based on industry reports.
Regardless of which profit-margin value they used, the picture looked bleak. The weekly ROI was negative for more than 80 percent of products. Given these dismal returns, how could firms not be aware that the money they lavish on commercials is largely wasted? Because local TV stations are fewer, audiences are spread into larger segments of people who will see your ad.
Also, the widespread appeal of TV may make consumers more receptive to TV advertising compared with other media. Many audiences are interested in and attracted to creative, well-made TV advertisements as demonstrated in the popular hype over Super Bowl commercials.
Other advantages of advertising on television are the ability to target specific audiences and expand reach by encouraging further engagement on social media. Advertisers can target their audience by purchasing ad spots during shows their intended demographic is likely to be watching.
Toy manufacturers may want to advertise during Saturday morning cartoons, for example, while a local bar and grill may want to advertise during sporting events. Business owners can choose to advertise with independent or local TV stations to further narrow the demographic focus.
Both reach and brand awareness can be expanded as advertisers encourage viewers to engage with their product while using additional technology and social media outlets.
Over 70 percent of television viewers use an additional device such as a tablet or smartphone while watching TV and are often engaged with friends online at the same time. Advertisers can encourage engagement by instructing viewers to enter a sweepstakes online or visit their website. Viewers are also more likely to text friends about a product they just saw advertised or search for more information on a product in which they are interested.
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