Sales Grow Faster for Advertisers Upping TV Spend

New evidence showing the positive sales effects gained by major brands through increased TV advertising will be presented at ARF’s Audience Measurement conference on June 14, 2016

The research by Standard Media Index (SMI) and RMT Chairman Bill Harvey found that there were significant spikes in sales for major brands that had initially reduced their TV spend in favor of digital, but had now shifted dollars back to the medium over a two year period.

Highlighted in the study were three CPG companies that together averaged a sales increase of 4.68 times the incremental TV ad spend after they switched dollars back to TV.

Working with IRI and corporate 10K data, SMI and Harvey’s research analyzed media spend shifts among 100 major advertisers from Q1 2014 to Q1 2016 and sales results for all CPG and a dozen non-CPG advertisers in this pool.

The analysis identified that increased TV spend was a key factor in driving sales for a dozen of the fastest-growing advertisers (including seven CPG brands and five non-CPG brands), which saw their revenues jump by 14.6% on average. These advertisers averaged a 25.8% rise in their TV ad spend over the period.

The study’s full findings will be presented at the ARF conference in New York, where SMI’s CEO James Fennessy and Harvey will quantify the increasing “switchback” from digital to TV by number of advertisers, product type, and examine overall ROI impact.

ARF Audience Measurement Tracking Actual Media Shifts & Their ROI Effects SMI CEO James Fennessy & RMT’s Bill Harvey 12:00 p.m. Tuesday, June 14 2016 Studio Three & Four, 2nd Floor

The research builds on recent reports that many advertisers who pulled back on TV commitments to switch to digital are now reversing their strategy, citing declines in return on investment.

It addition to shining the spotlight on media companies’ changing spending habits, the upcoming session will cover a range of insights including a breakout of digital’s subtypes and how each one is growing, and an overview of SMI’s soon to be released full-market national TV product.

SMI captures 80% of total U.S. agency spend exclusively from the booking systems of five of the six global media holding groups, as well as leading independents. It reports monthly on actual spend data and is the clearest picture of the flow of dollars across the sector.