Study challenges criteria for TV spot buying

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Market researchers Information Resources Inc. and MMA/ Carat said preliminary results of a new study of TV advertising's impact on sales indicate that nearly half the $14 billion spent annually on spot TV is wasted, while only about one-fourth is actually well-placed.

Citing a new Adworks 2 study, they told an Advertising Research Foundation conference that using the brand development index for a TV market as the only determinant for buying TV time is "simplistic" and unreliable. A BDI will identify markets where a brand has above or below average sales. It results in spending 43% of ad dollars in high BDI markets where the sales response to TV advertising is low. Only 24% of buys result in high sales response in high BDI markets, they said.

The two companies said other findings show that sales of heavily promoted brands may be less responsive to TV advertising; that a positive relationship exists between prime-time weighted plans and sales response; and that there appears to be no direct relationship between "share of voice" and sales success, or between base price elasticity and TV sales.

Copyright March 1998, Crain Communications Inc.

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