NEW YORK – Consumer brands that cut their TV advertising budgets will lose a much greater amount in sales, according to a new report from TiVo Research, a subsidiary of TiVo Inc.
TiVo Research and customer engagement consultancy 84.51˚ worked with media properties including A+E Networks and global media company Turner to track 15 consumer packaged goods (CGP) brands. The study found that for 11 of the 15 CPG brands analyzed, sales returns dropped by a combined $94 million when TV spend was cut year-over-year. This accounted for 69% of the 2013 incremental sales attributed to TV advertising. In 2014, the average on-air brand was reaching only 25% of its purchasers in an average week (down from 35% in 2013), leaving 75% open to competition.
In addition:
– All 15 brands posted reach declines, and nearly all brands that decreased spending also saw a decrease in return;
– For every dollar decline in ad spend, the 11 brands lost three times that amount in return. The correlation was disproportionate in favor of higher TV spend; and
– Reduced ad spend resulted in reach and frequency declines for 11 of the 15 brands, which led to the drop in sales/ROI.
"In today's multi-screen content universe, consumer brands are reallocating advertising dollars to digital spend, however, our research found that TV advertising is more effective than ever," said TiVo Research VP of research Betsy Rella, in the study’s news release. "This study confirms a direct link between TV advertising spend and ROI for brand advertisers."
"We see marketers constantly struggling to find the most effective advertising media, with many cutting their TV advertising efforts," added 84.51° head of brands Nishat Mehta. "We wanted to better understand the effects of changes in TV spend. These results will help the industry make more informed decisions about optimizing their media planning."
The study was based on a combined data stream of 84.51°'s in-store sales with TiVo Research's viewing data for over 2 million households. Both data panels are combined to create an anonymized matched panel of over 400K households with both exposure and purchase data, providing a single source view of the consumer. The two panels are matched via Experian, which connects the information from 84.51° and TiVo anonymously on the backend.
