Study Re-Affirms Long-Term Sales Impact of TV Ads, But Suggests Small Players May Do Better

Less than a year after seeming to prove the long-term sales effect of TV ad spending is as strong or stronger than ever, Nielsen Catalina Solutions has found some possible caveats to that -- which could have implications for both big and small advertisers. A new study encompassing a group of 31 packaged-goods brands (far larger than the five in the study released last June) reconfirms the old assumption that long-term sales effects from TV ads are double the immediate short-term sales effects. The long-term multiple in the new study, however, averages 2.04 times the short-term effect, somewhat lower and with a narrower range than in the June study. Nielsen Catalina mashes up data from Nielsen audience-measurement panels and tools with shopper-card purchases to find the sales impact of advertising for packaged-goods brands.Results of the study were presented to the Advertising Research Foundation Re:Think 2015 conference on Tuesday in New York. The new study still finds a fairly wide range – from close to one to around three times short-term sales – for the overall effect of TV ads, including one outlier brand getting a 3.5 times multiple. The new study tweaked methodology to exclude long-term sales from people not affected by the ads in the first place, and narrowed the "short-term" time window to the scheduled flight, rather than including the long tail of airings caused by make goods. Among more intriguing findings was an inverse relationship between market share and long-term sales effect – so that smaller category players on average got a bigger bang for the buck long term than bigger players. But the correlation is a middling 0.41 (on a scale of zero to 1.0), and even 31 brands may be too small a sample to draw a firm conclusion, particularly since a smaller soda brand and small condiment brand had big effects on results, said NCS Chief Research Officer Leslie Wood. "Interestingly, dollar spend had zero correlation" with the long-term sales multiple, Ms. Wood said in an interview, so big and small spenders each got similar bang for the buck long term. Balancing those findings, brands with the biggest absolute short-term sales impact also had bigger long-term sales multipliers. And bigger categories also tended to produce bigger long-term multiples of short-term sales gains. CBS Chief Research Officer David Poltrack held out results of the study as proof that TV still works, and that advertisers are making a mistake in shifting money from TV budgets into digital, which hasn't been proven to have a similar long-term sales impact. He acknowledged that digltal advertisers and publishers have yet to fund a similar study, and that there's no reason to believe long-term sales multipliers for other media would be different than for TV. Ms. Wood said NCS hopes next to assemble a similar study looking at the long-term sales impact of digital advertising. Jim Meier, senior director-marketing finance at MillerCoors and a board member of the Marketing Accountability Standards Board, which supported the study as part of a long-term project to study the impact of sales on brand value, said that as a finance executive, the research "gives me a greater degree of comfort, but I think there's more work to be done."

Study Re-Affirms Long-Term Sales Impact of TV Ads, But Suggests Small Players May Do Better

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