TiVo's research division released a new report suggesting brands are pennywise, dollar-foolish when they move their advertising dollars out of television.
For its study, done weeks before TV's big upfront ad selling season, TiVo partnered with "engagement consultancy" 84.51° (a wholly-owned subsidiary of The Kroger Co.). A+E Networks and Turner Networks sponsored the study.
The study found that of 15 brands which cut TV ad spending, the majority experienced significant sales declines. The study did not say if the money these brands didn't spend on TV went to other platforms like digital. In other words, it's unclear as to whether the study is merely saying that if these brands advertise less, they'll sell less goods.
In any event, the backers say its a win for TV over upstart digital platforms.
"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 Betsy Rella, VP of research for TiVo Research. "This study confirms a direct link between TV advertising spend and ROI for brand advertisers."
The study found that 11 of the 15 brands that spent less on TV advertising lost a combined $94 million in sales. For every dollar they didn't spend on TV advertising, they lost three in lost sales, the report said.
Each of the brands spent, on average, $3.1 million less on TV advertising and saw sales decline $8.6 million.
"While advertisers are evaluating new and different ad tools and platforms, some TV budgets have shifted without the benefit of fully understanding the effects and quantifying the value of those shifts," said Mel Berning, president and chief revenue officer for A+E Networks. "Among all the platforms in which media companies can engage and integrate advertisers, this study has further proven that television continues to provide both better return on investment and accountability for our ad partners."
- read this TiVo press release
- read this AdWeek story
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