SMI: Fresh Data on How TV Affects Advertiser Success

I presented the findings at the ARF39s Audience Measurement conference on June 14 in conjunction with Research Measurement Technologies39 chairman Bill Harvey who worked with SMI on the special studySome first quarter 2016 statistics show why the digital rivalry is of such concern in that period 36 of all advertising dollars devoted to screens went to digital media with traditional TV making up the other 64 Two years earlier in first quarter 2014 the digital percentage was considerably less 26 and TV made up 74 according to SMI dataIn the new study we analyzed the spending and sales data of 100 top advertisers using information from SMI along with sales data from the market research firm IRI and 10K filings Our study shows that there were significant increases in consumer sales for advertisers whose spending followed certain buying patterns amp8211 most notably those who had decreased their TV spend over the last two years but then increased it againWe focused on clients in a dozen different advertising sectors comparing data for calendaryear 2015 results with those of the first quarter of this year Within five of the sectors a significant number of brands have increased their TV spend after a period when they relied more heavily on digitalamp160 They includeAutomotiveFinancial ServicesTechnologyTelecommunicationsTravelOne category was absolutely flat in terms of TV ad spend amp8211 quick service restaurants QSR which has maintained a media mix with an average 79 of all ad spend devoted to TV Sales data were available for only one QSR and it showed sales increase of 51Six categories continue to use less television spending than in the past Among them areConsumer ElectronicsConsumer Packaged Goods CPGEntertainmentFashionRetailPrescription PharmaceuticalsThree CPG companies switched back to greater TV spending after diminishing it bucking the category39s overall downward TV trendamp160For those three CPG companies we saw a dramatic impact on consumer salesamp160when comparing first quarter 2016 data with the same period in 2014Company A started flowing more money back into TV during Q4 2015amp160and its sales increased 3 in Q1 2016amp160when compared with the same period in 2014 For every dollar the company reinvested in TV it got back 471 in increased salesCompany B generally has raised its TV spending from the beginning of 2015 onwards with the exception of two periods Q2 2015 and this year39s Q1 As a result it increased sales 4 and got back 567 for every dollar reinvested in TV spendingCompany C switched gears during Q4 2015 and as a result of reinvesting in TV during that period and Q1 2016 it increased sales73 or 367 for every new TV dollarAveraged together the three companies gained48 in sales amp160or 468 per dollar of TV spendingWe sliced the data in other ways as well and the companies that added back TV all showed outstanding results no matter how we looked at the dataamp160SMI divided the advertisers into groups based on whether they increased decreased or maintained their TV spending or digital spending Then we looked at how the companies39 sales were affectedAmong CPG advertisers there were only two groups where sales increased for 100 of the companies involved Those advertisers that once lowered TV spending and then increased it later on and those who decreased digital spending and increased TV spending during full year 2015 and first quarter 2016The group with the next best results included CPG companies that increased both digital and TV spending In those cases 60 of the companies enjoyed increased consumer salesWe also looked at the results for 10 advertisers for which we could get sales data from 10K reports that don39t fall in the CPG category breaking them into the same spending groups They included retail automotive technology quick service restaurants and entertainment brands Only one spending group enjoyed 100 positive sales results for all companies involved Those that had once lowered TV and then increased it againStay tuned for more news on this same frontamp160 SMI is launching a new product shortly that will give greater granularity on national media spendingamp160 That information will undoubtedly help sellers add more fuel to the fire as they show network TV39s importance in the media mixamp160The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated bloggers amp160amp160

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SMI: Fresh Data on How TV Affects Advertiser Success

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James Fennessy

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