The 5 Truths of TV Advertising Effectiveness


Question:  Is TV advertising less effective today than 15 years ago?

If you think you know the answer, read on. Digital and social media are having a transformational effect on Marketing content, organizations and processes. This being said, what’s often ignored is what we know about TV advertising effectiveness in the here and now. 

The 5 TV Advertising Truths

I recently wrote about “The 5 Myths of TV Viewership,” and this post forms a book-end with that earlier one. Like TV viewership, there are many myths about how and whether TV advertising actually works in the current environment. Here are the 5 most prevalent ones–some of which you might find surprising:
MYTH:   TV Advertising Takes a Long Time to Work
TRUTH #1:   Advertising Works Fast, When it Works

Part of the mythology of TV advertising is the “3+” frequency myth. That is, it takes a minimum of 3 repetitions of an ad for it to move a consumer down the purchase funnel. For CPG, this is simply not true. 

The advertising response curve is "convex"—the greatest marginal response is from the first exposures.

Numerous single source tests have demonstrated that when TV ads work, they work quickly to build sales (Rubinson, Journal of Advertising Research).  In fact, the TV ad effectiveness curve is generally convex—e.g. early airings have the most impact, and additional airings decrease in effectiveness (Taylor, Kennedy & Sharp: Journal of Advertising Research). When ads work, they tend to work quickly. 

MYTH:  When TV Ads Work, They Have Large Impact
TRUTH #2:  Ads Generate Small Impact Over Time

The question “What sales impact is my ad having?” has been studied rigorously since the advent of single source data (e.g. BehaviorScan or other panels which track the single variable impact of advertising on purchase behavior). On average, for the CPG categories studied, every $1 invested returns about $.10 (Taylor, Kennedy & Sharp Journal of Advertising Research). The sales return on an invested TV ad dollar has varied between .06 and .14 over the past 20 years (Hu, Lodish, Krieger & Hayati Journal of Advertising Research). And the sales lift is larger in year 2 than year 1. 

MYTH:  DVR’s are Killing Ads
TRUTH #3:  Ad Impact is Similar With or Without DVR’s

Yes, it’s hard to believe, but the evidence suggests that DVR homes have about the same recall of TV ads as non-DVR homes (du Plessis, Journal of Advertising Research). 

 

There’s likely a range of reasons for this phenomenon, including people with DVR’s watching higher engagement shows, DVR’s increasing total TV viewing time, etc. Interestingly, research shows that consumers have the same recall and understanding of your ad when fast forwarded as when viewed in a normal manner, if they have already seen it normally once (du Plessis, Journal of Advertising Research).   

MYTH:  Digital Ads are More Likable Than TV Ads
TRUTH #4:  TV Advertising is More Likable

People assume that because the web is a “lean-forward” medium, ads in this environment are naturally more engaging  and well liked. Research shows that this is not the case. On average, TV ads are liked better than digital ads (Moult & Smith, Journal of Advertising Research). Here I should also say that likability doesn’t necessarily translate to effectiveness. 

MYTH:  TV Ads are Declining in Effectiveness
TRUTH #5:  TV Ads are as Effective Today as 15 Years Ago

This is perhaps the biggest myth of all—that TV ads are losing effectiveness over time. Falling TV ratings and the rise of social media and mobile are hurting TV ad effectiveness, right? Wrong. The research on this topic, across time and geographies, strongly suggests this is not true. As noted earlier, advertising demand elasticities have fluctuated over the past 15 years, but are not declining (Rubinson, Journal of Advertising Research). So, TV advertising is as effective (or ineffective) as ever. 

Future of TV Advertising

So, if TV advertising is still effective, what’s the future of TV advertising? I’d suggest it will be in three areas: 

1. Cross Media – The rise of digital and social media has created numerous new means and forms to advertise and engage consumers. Research clearly shows that the impact of a TV ad is even higher when a consumer has been exposed to your brands ad on the web, and vice versa. Thus, CMO’s should focus on building cross media campaigns that continue to leverage TV as appropriate, but in new combinations with new social media and digital initiatives (for more on social media marketing, see “How the Future Social Web will Transform Marketing”). 

Social media has entered the traditional marketing ecosystem.

2. New TV Ad Forms – As TV evolves from network to networked TV, new advertising form factors are cropping up. iTV is already in place and many brands are experimenting with this new approach. Additionally, Shelly Palmer and others have proposed new ad forms such as speed bumps, telescoping ads, etc. which are being enabled by “networked” TV. Marketers need to keep an eye on these new ad forms and be ready to experiment, learn and adjust. 

3. Earned Media – There is vast opportunity for brands to understand how to use paid media to drive earned media. However, this is a nascent and poorly understood area that deserves much greater experimentation. Nonetheless, understanding how paid media drives earned, earned drives paid, and how they influence one another is fertile ground for future advertising model innovation. 

So, back to our original question: “Is TV advertising less effective than 15 years ago?” The answer is a clear “no,” just as you should answer the question “Shouldn’t we completely forget about TV advertising and just concentrate solely on new media?” 

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12 Responses to The 5 Truths of TV Advertising Effectiveness

  1. Social comments and analytics for this post…

    This post was mentioned on Twitter by kelvin8048: The 5 Truths of TV Advertising Effectiveness http://bit.ly/4sAcQo

  2. Youssef says:

    Great post, thanks!

  3. Robert Clark says:

    I am entrenched now in Interactive TV and Advanced Advertising research and applications development managing discussion groups (LinkedIn) and apps developer communities (OEDN). Development resources are being leveraged, but I wouldn’t go so far as to say the capabilities are being delivered generally by Broadcasters or Pay-TV (Cableco, Satellite and TelcoTV)operators. It would interest me to hear your further view Randall on its progress. Perceptions are as important as reality.

    • beardrs says:

      Robert — Thanks for reading the blog and taking time to comment. Interactive TV is certainly a promising space with much potential. I did a blog post on the topic some time back: https://randallbeard.wordpress.com/2009/08/24/itv-digital-marketing-frontier/. I think there is great promise in iTV, but to date it’s largely unrealized. This has to do with many factors, but chief among them are: lack of awareness among marketers; open questions about consumer acceptance; and challenges in managing the executional complexities of iTV. That said, there are companies like Unilever and TD Ameritrade which have aggressively experimented with the medium. My personal belief is that TV will become increasingly “networked” with the web, and this will inevitably drive more interactivity. What forms that takes and how successful they will be remains to be seen. Randall

  4. Matt says:

    I’m wondering if you can post a reference to “Research clearly shows that the impact of a TV ad is even higher when a consumer has been exposed to your brands ad on the web, and vice versa”. I’d love to see the study you’re thinking of. Thanks.

    • beardrs says:

      Hi Matt — Thanks for the comment and reading the blog. Nielsen IAG measures ad effectiveness for both TV and digital ads. The day after recall, on-line panel methodology allows measurement of the same ad among consumers who’ve seen the ad on TV only, web only, and TV+web. In virtually every case that I’ve seen, the TV+web performance is higher than either TV or web individually. In my experience, many companies are using the web to extend reach, but this data would suggest that maximizing overlap between TV and web may actually be more effective. Randall

  5. Anshul Gupta says:

    Surely the rise of social media has threaten the territory of TV world but, there is still some time left for it to be totally replaced. Especially in the third world countries; where internet is still an issue to grapple with.

    Read: The Rise of Social Media: Statistics (http://ideas8bottom.blogspot.com/2010/05/social-media-for-business-31-stats-and.html)

    And you would understand the situation better.

    -Thanks

    • beardrs says:

      Anshul — Social media certainly changes many of the rules of Marketing and its impact will only get larger over time. Having said that, there is way too much misinformation about the state of TV and TV advertising. I’d just make two points. In the U.S., people watch more TV than they did 10 years ago. This is because of more channels, more TV’s per home, more ways to watch TV (e.g. DVR’s), and higher quality viewing. The web and mobile media have been largely additive to TV, not a replacement for. Second, most academic studies suggest that TV effectiveness has not significantly declined in the past 10 years. This doesn’t mean it will always be what it is today. In fact, I think it will change dramatically as TV’s become wireless, and increasing amounts of TV content are delivered via the web and mobile.For me, the bigger issue and challenge is how traditional “paid” advertising works together with “earned” media to create strong brands. And this is a space that most Marketers are just beginning to understand. Randall

  6. Kingshuk Haque says:

    It was indeed a good read. Nicely illustrated the long lasting category (e.g. TV).

  7. Duncan Smith says:

    Mindlab International conducted a study for Astra (the satellite people)to look at how people would respond to targeted advertising embedded in programme content using hybid TV technology. The pilot study was presented at the 2010 Broadcast and beyond conference. Mindlab’s site http://www.themindlab.co.uk and the report is at: http://themindlab.org/astra_hybrid_tv.pdf

    • beardrs says:

      Duncan–Thanks for reading the blog and taking time to comment. I read thru the study you referenced and agree that interactive TV shows a lot of promise. I wrote about this in a previous post “Is iTV the next Digital Marketing Frontier?” The big issues with iTV are: 1) the complexity and cost of Marketers implementing it; and 2) consumers willingness to engage and interact with the content. If these barriers can be addressed, then I do think that, as your research shows, there is great potential in this area. Randall

  8. tv links says:

    It’s nearly impossible to find knowledgeable people on this topic, but you sound like you know what you’re talking about!
    Thanks

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