Brands underestimate TV ad effects

3 September 2014

NEW YORK: Many brands may be guilty of underestimating the long-term impact of their television advertising, according to a study from CBS, Kellogg's and Nielsen Catalina Solutions.

For around two decades, marketers have relied on a rule of thumb stating that if an advertising test was successful during its first year, the impact over the next two years would generally double the initial result.

This assumption was drawn from the well-known "Adworks" study published by research firm IRI in 1991, based on its analysis of various campaigns run by consumer-packaged goods brands.

David Poltrack, chief research officer at CBS Corporation and president of CBS Vision, suggested the persistence of this hypothesis, despite the seismic changes occurring in the media ecosystem, was worrying.

"I was fortunate enough to be a member of the team that funded that study," he said. (For more, including detailed results of this study, read Warc's exclusive report: CBS/Kellogg's/Nielsen Catalina redefine impact of TV advertising.)

"And I continue to be amazed about how the advertising industry has continued to be comfortable using the multiplier of two times the short-term impact to estimate the long-term impact of their advertising campaigns."

In moving on from the "two-times multiplier", CBS worked with Kellogg's and Nielsen Catalina Solutions to bring the data on the long-term effects – defined as more than a month – of TV ads right up to date.

Their analysis – first discussed at the Advertising Research Foundation's (ARF) Audience Measurement Conference – revealed that the long-term lift in sales across categories including boxed-dinner products, soft drinks and toothpaste was between 1.8 and 4.5 times higher than the initial spike in demand.

Commercials for Special K, a cereal made by Kellogg's, were also shown to have a long-term impact some 3.5 times greater than the short-term results recorded among exposed consumers.

Poltrack asserted that these findings had the potential to exert a profound impact on the marketing industry, given its previous reliance on data from 20 years ago.

"We believe that it will begin the process of correcting a practice that has resulted in the undervaluing of the contribution of advertising to the bottom line," he said.

"That is: the failure to properly account for the long-term brand equity building power of a continuous program of television advertising."

Data sourced from Warc