A new study makes the case that cutting TV advertising can lead to a decrease in sales and return on investment.
The research, sponsored by TiVo, A+E Networks, Turner and conducted by engagement consultant firm 84.51° looked at 15 random consumer-goods companies that had reduced TV spending between 2013 and 2014. It found 11 of those brands saw a sales drop by a combined $94 million, Adweek reports.
The average marketer reduced its ad budget by $3.1 million, resulting in $8.6 million in lost sales, Broadcasting & Cable reports. In other words, for every dollar cut from the TV budget, the 11 brands lost three times that amount in return, according to the study.
The brands ranged from beverage, snack, candy and ingredient companies. Out of the four brands that didn’t see a sales drop, two decreased their ad spending in line with a decline in spending by their competitors, and the other two reallocated their TV spending by buying highly-targeted networks, according to AdWeek.
The research highlights concerns that that some companies are shifting advertising funds aways from television.
“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, vice president of research, TiVo Research. “This study confirms a direct link between TV advertising spend and ROI for brand advertisers.”
The findings will be presented at the Advertising Research Foundation’s (ARF) Re!Think conference on March 14.