Download TV advertising performance in driving sales

How does TV advertising perform in comparison with other media in driving sales?
Advertising in general affects sales; however its elasticity is small and difficult to estimate
and is one of the most difficult, complex and controversial problems in marketing. However,
there are many studies that have examined the effectiveness of media communications.
One study in particular by Innerscope Research and the Television Bureau of Canada (2010)
found that:
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Television results in 1.8 times more Total Emotional Engagement than online video
Television had 1.4 times more next day recall than online video
Television had 5.5 times more Total Emotional Engagement than newspaper
Television and newspaper performed comparably on next day recall
Television had three times more Total Emotional Engagement than radio
Television had three times more next day recall than radio
Despite the significant rise of online advertising, TV advertising still attracts more than three
times as much revenue which suggests that the internet has affected print much worse than
TV (White and Dawson, 2008).
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Online advertising can build brands as well as click-throughs and television can drive sales
volumes as well as brand saliency (Heath, 2008).
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TV and newspaper display advertising (32% above average) have been found to drive sales
online more effectively than online advertising itself (Ling, 2008).
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In the past few years there has been a lack of evidence assessing the impact of online
communication on offline sales due to minimum data being available to provide a direct link.
However, a modeling system approach can help to reveal these indirect relationships where
they exist. Findings have revealed that consumers use the web to research items, most of
which are consequently bought in-store. Offline drivers result in a much higher conversion
rate than web visits alone (Smith, 2010).
Related abstracts
MarketShare Partners, in Collaboration with Fox Broadcasting Company, Releases Study on
Television’s Continued Importance in the Media Mix
Newscorp (2010). "MarketShare Partners, in Collaboration with Fox Broadcasting Company,
Releases Study on Television’s Continued Importance in the Media Mix." Newscorp Business Unit News.
An independent study by industry-leading marketing analytics firm, MarketShare Partners
(MSP) in conjunction with Fox Broadcasting Company (FOX) found that across a broad range
of industries, television remains a central driver of sales results for major advertisers. Similar
budget allocations to all media still results in TV having the highest efficiency in delivering
sales effects because of its direct contribution and its indirect influence on other media. TV’s
influence on the effectiveness of marketing communications throughout the purchase
funnel was also found to increase the combined total sales impact by as much as 35%. In
addition, the results of the study also revealed internet-based businesses or businesses who
sell digital media or products were often given the recommendation of adopting a higher
level of television spending to help drive sales lifts and increase online activity. The findings
of this study highlight the critical value of TV and its essential role in the marketing mix for
most major brands, further amplified by other media due to TV’s rich impact on consumer
choice and opinion.
Can Old Media Enhance New Media? How Traditional Advertising pays off for an Online Social
Network
Pfeiffer, M & Zinnbauer, M. (2010). Can Old Media Enhance New Media? How Traditional
Advertising Pays off for an Online Social Network, World Advertising Research Center
Limited. 50: 42-49.
The authors examined the impact of classic advertising channels (TV, radio, print, or
outdoor) on registrations on a website to observe whether they showed a positive return on
investment (ROI). The results demonstrated that TV campaigns have the highest efficiency
levels when compared with all classic advertising channels. Accounting for the actual market
structure, the analysis also integrated the effects of communication activities of two key
competitors, also pureplays of similar size and providing nearly exchangeable services. TV
campaigns were found to strongly affect the success of all players in the relevant category
and, thereby, increase competitors' sales. However, this effect can be reduced when the
company’s campaign is not run at the same time as the competitors. Print and poster both
showed weak efficiency levels and could not significantly increase a Web site's traffic.
Overall, classical advertising with a clear focus on TV clearly pays off and outperforms pure
search-engine marketing with regards to generating new registrations. However, this only
holds true until the point where the marginal utility, which follows an S-curve function,
starts to diminish below what search engine marketing (in this case, mainly Google adwords)
can bring in.
Multi-Platform Messaging The Medium Matters
Treutler, T., and Levine, B (2010). "Multi-Platform Messaging - The Medium Matters."
Television Bureau of Canada - Innerscope Research.
The goal of this research was to gain a deeper understanding of how different media
effectively communicate advertising messaging. The results revealed that television had:
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1.8 times more Total Emotional Engagement than online video
•
Television also had 1.4 times more next day recall than online video
•
Television had 5.5 times more Total Emotional Engagement than newspaper
•
Television and newspaper performed comparably on next day recall
•
Television had three times more Total Emotional Engagement than radio
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Television also had three times more next day recall than radio
The Total Emotional Engagement of television and online display could not be compared as
the online display ads generated less than 1% visual attention. Television had five times
greater next day recall than online display. Basic online display ads (those that are of a
standard size and contain minimal animation) generated recall at very close to the
background noise level (the level of false attributions).
Media measurement: Online and offline connectivity
Smith,B(2010), “Media measurement: Online and offline connectivity” Admap, October
2010, pp. 34-35.
The effectiveness of media channels can be distorted unless the relative contributions of
offline and online channels to sales are measured. There has been little evidence in the past
assessing the impact of online communication on offline sales because little data was
available to ¬provide a direct link. However, a modelling system approach can help to reveal
these indirect relationships where they exist. This reveals that consumers use the web to
research items, most of which are subsequently bought in-store. Offline drivers result in a
much higher conversion rate than web visits alone. Analysis of the interactions between
media channels can lead to significant gains in media budget efficiency
Empirical Evidence of TV Advertising Effectiveness
Rubinson, J. (2009). "Empirical Evidence of TV Advertising Effectiveness." Journal of
Advertising Research 49(2): 20-226.
This study examined 3 hypotheses that, if accepted, would lead to the conclusion that the
effectiveness of TV advertising has declined over time. Three hundred and eighty eight case
histories were accessed from 7 different databases to conduct a form of meta analysis to
address this issue. The results of the study did not support the acceptance of any of the
hypotheses, leading to the conclusion that impressions from TV advertising appear to be not
only as effective as ever, it is possible even increasing in effectiveness when it comes to
increasing sales. In terms of specific marketing objectives, the evidence suggests that the
impact of TV on sales lift appears to operate primarily by generating brand awareness,
suggesting that an effective marketing plan that uses TV should do so in conjunction with
multiple forms of marketing in order to impact all stages of the consumer purchase process.
Consequently, it is essential to consider the role that TV should play in the marketing mix
relative to other media.
Advertising Effectiveness in Different Media: A Comparison of Web and Television Advertising
Nagar, K. (2009). "Advertising effectiveness in different media - A comparison of web and
television advertising." IIMB Management Review.
The number of individuals watching TV and surfing the web simultaneously continues to rise,
hence, understanding the effectiveness of each media is essential. This article presents the
results of a survey comparing the effectiveness of Web and TV advertisements, which
indicate that the Web is perceived as an efficient medium for conveying information and
details. Web ads are not considered to be deceptive. However, TV ads help in changing and
maintaining attitudes towards the advertised products/services better than Web ads.
Advertising clutter in both the media generate a high level of irritation among users. Web
advertisements have come of age, and may soon be comparable to TV on all the factors of
advertising effectiveness.
The enduring anachronisms of American TV selling
White, S and Dawson C. (2008). “The enduring anachronisms of American TV selling.”
Admap 493, 18-20.
This article describes the U.S. system for selling TV time, and argues that the mounting
pressures against this system may soon become irresistible. Unlike other countries, in
America the TV airtime buying and selling system was designed by advertisers not
broadcasters, which largely explains why it has been impervious to change. TV remains the
dominant medium, and is still growing, but the basis of its advertising is under increasing
pressure from a number of fronts, including: resentment at escalating costs, the growing
power of media buying groups, and audience migration to other channels such as the
internet, DVD and video games. The three interested parties - advertisers, TV stations and
buying agencies - have different and irreconcilable objectives, and until these are resolved,
the current system will continue to struggle.
How to understand the growing range of consumer touch points
Heath, M (2008) “How to understand the growing range of consumer touch points”. Admap,
September 2008, Issue 497, pp. 27-29.
Marketers need to understand and combine all channels through which consumers
experience brands, and not merely focus on traditional media, as audience and media
fragmentation are increasingly interlinked.. This requires establishing how much of the
brand 'picture' marketers can realistically control through each channel, since there are
aspects which consumers design and build for themselves. Collecting channel preferences
from customers is not enough: marketers need a much better collaboration between agency
partners. If no-one can be expert across all channels, a 'channel generalist' is needed to
bring the specialisms together. As such, a new breed of channel planner needs to emerge,
familiar with the whole range of quantitative and qualitative toolkits, and with an
understanding of how to exploit customer data from a channel perspective.
Driving e-commerce traffic: online may not be the best way
Ling ,A (2008) “Driving e-commerce traffic: online may not be the best way”. Admap,
December 2008, Issue 500, pp. 48-49.
This article looks into which media are most effective in driving sales online which
unexpectedly, turns out not to be online advertising. Customer-addressed emails are very
effective (52% above average) but unsolicited emails are less successful (31% below
average). Marketers need to do more work, with specialists, to design effective prospect
emails targeted to those who have said they are open to offers from third parties.
Surprisingly, traditional non-intrusive media prove effective. TV and newspaper display
advertising (32% above average) and direct mail is a good alternative (16% above average).
Social networking site advertising is also unappealing (26% below average); however, the 1822 age group is an exception in rating social network ads and mobile texts highly (22% above
average).
Separate and joint effects of medium type on consumer responses: a comparison of television,
print, and the Internet
Dijkstra, M., H. E. J. J. M. Buijtels, et al. (2005). "Separate and joint effects of medium type
on consumer responses: a comparison of television, print, and the Internet." Journal of
Business Research 58(3): 377-386.
This study explores the effects on consumer responses of single- and multiple-media
campaigns consisting of television, print, and the Internet. Multiple media in a campaign are
expected to have synergy effects. We examine whether a complementarity effect is present
in multiple-media campaigns related to media differences in evoking cognitive, affective,
and conative responses. Media contribute differentially to the route to persuasion and may
complement each other in a marketing-communication campaign. The results show that TVonly campaigns are superior in evoking cognitive responses. This superiority is probably due
to the larger number of senses stimulated as well as the forced exposure associated with
television as a delivery medium. Affective and conative responses do not significantly differ
between the single-medium campaigns. Product involvement influences brand affect and
purchase intention. The analysis of covariance reveals a complementarity effect in multiplemedia campaigns compared to the Internet-only campaign. However, compared to the TVonly campaign, multiple-media campaigns are less effective in evoking cognitive responses.
For most responses, print-only campaigns are as effective as multiple-media campaigns.
A Look at the Long-run Effectiveness of Multimedia Advertising and Its Implications for Budget
Allocation Decisions
Vakratsas, D. and M. Zhenfeng (2005). "A Look at the Long-run Effectiveness of Multimedia
Advertising and Its Implications for Budget Allocation Decisions." Journal of Advertising
Research 45(2): 241-254.
Taken together, the findings about the primary and cross-advertising effects suggest
that, at least in this study, advertising in the more strategic and image-driven media
categories such as magazine and network TV tends to deliver higher primary effects, i.e.,
tends to be more efficient in increasing own brand sales. The more tactical and informationdriven spot TV, on the other hand, tends to have higher cross effects than the other two
categories. The observed pattern of differential primary and cross-effects of advertising in
the two TV media may be explained by considering the mediating effect of consumer loyalty.
Specifically, image-oriented network TV advertising may be attended to more closely by
brand loyal consumers, whereas information-oriented spot TV advertising is appealing
mainly to brand switchers, in much the same way that promotion works. This should then
explain network TV advertising’s long-term effect.
Modeling the Microeffects of Television Advertising: Which Ad Works, When, Where, for How
Long, and Why?
Tellis, G. J., R. K. Chandy, et al. (2005). "Modeling the Microeffects of Television Advertising:
Which Ad Works, When, Where, for How Long, and Why?" Marketing Science 24(3): 359366.
Most past research has focused on how aggregate advertising works in field settings.
However, the information most critical to managers is which ad works, in which medium or
vehicle, at what time of the day, at what level of repetition, and for how long. Managers also
need to know why a particular ad works in terms of the characteristics (or cues) of its
creative. The authors propose a comprehensive model to address these issues and to
evaluate the effects of TV advertising on sales, which simultaneously separates the effects of
the ad itself from that of the time, placement, length of usage, repetition, creative cues of
the ad, and type of market in which it is shown. It also captures ad decay by hour to avoid
problems of data aggregation. There is no other model in the literature that currently does
such an in-depth and comprehensive analysis of advertising effectiveness.