A new study finds 12 large brands saw revenues increase 14.6 percent.
New research from Standard Media Index (SMI) and Research Measurement Technologies (RMT) shows that significant brands saw sales improve after a recent increase in TV advertising, following a brief period of decline in TV ad buys, as many advertisers shifted their budgets towards digital.
Working with IRI and corporate 10K data, the research from SMI and RMT Chairman Bill Harvey analyzed the media spend shifts of 100 major advertisers from the first quarter in 2017 to the fourth quarter in 2017.
According to SMI, “The analysis identified that increased TV spends a crucial 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 percent on average.
These advertisers averaged a 25.8 percent rise in their TV ad spend over the period.” While the early period of analysis saw a shift from TV contribute to digital buys, a disappointing ROI and concerns about the effectiveness and real reach from digital ads have led big brands and agencies to return to TV.
This confirms findings from the recent STRATA Survey, which found that when “comparing all advertising mediums, TV is the top choice for agencies as 48 percent say they are more focused on spot TV/cable than any other medium, a 16 percent increase from a year ago. Spot TV saw a 19 percent increase in agency focus from a year ago, while cable TV saw a 24 percent increase.”
The study results from SMI and RMT come after an increase in TV ad-spend commitments in this year’s upfront market, the annual TV showcase in which much of the coming season’s ad inventory is sold. Many marketers returned to TV after a shift to digital failed to live up to expectations, and as concern over fake web traffic and Ad blockers increased.
The concern over digital advertising is well founded. A recent WFA report warns of the potential for ad fraud to reach $50 billion per year by 2020, in large part driven by the use of “bots” to artificially inflate web traffic reports.
Ad blocking is also a real issue for digital media, as a study by PageFair conducted earlier this year showed 420 million smartphone user is now blocking ads and that the practice saw a 94 percent increase in just one year.
Despite the concern over digital and the apparent value of TV advertising to increase sales, PwC’s annual Global Entertainment and Media Outlook 2017-2020 predicts that Internet advertising revenue will surpass TV ad revenue for the first time in 2017. This is because the simple reality is that more and more people are spending more and more time online, and that means ad dollars will follow.
However, the study from SMI and RMT shows that TV is not going anywhere and that the shift to digital isn’t happening in a straight line. TV remains a potent force to connect with consumers and drive sales, and while digital is growing, TV is also continuing to grow.
A spokeswoman for P&G explained the phenomenon well to the Wall Street Journal, “For our everyday products, driving awareness is important, and while the mix may vary by brand, region and some other factors, we see TV and digital not as an ‘either or’ but an ‘and.’”