At the ARF Audience Measurement 2016 Conference held June 12-14, SMI CEO James Fennessy and I presented the first hard data on spending across TV and Digital by the top 100 advertisers since the beginning of 2014 through Q1 2016. For the 19 advertisers in the CPG category we also analyzed ROI data in relation to media shifts, courtesy of IRI. We were also able to get published quarterly sales data for 10 Non-CPG advertisers in retail, automotive, QSR, technology, entertainment and also relate media shifts to ROI for those.
I had categorized the top 100 into 5 types:
A – Had lowered TV to fuel Digital, now putting back some from Digital into TV
B – Continuing to lower TV via shifts to Digital
C – Increasing TV and Digital
D – Digital down, TV up
E – Decreasing TV and Digital
Looking at the 39 of the 100 advertisers who had been lowering TV to shift monies into Digital, 15 (type A) of them were already shifting some dollars back into TV by Q1 2016. The categories coming back strongest to TV are automotive, financial, technology, telecom, and travel. QSR stayed unchanged over the 9 Quarters at 79% TV. Categories where the original siphoning TV for Digital is generally continuing are consumer electronics, CPG, entertainment, fashion, retail, and prescription drugs. Of course, there are advertiser-by-advertiser differences within product categories.
For example, within CPG, not a category that has as a whole showed a move back to TV, three CPG advertisers did show the A pattern of return to TV. All three showed sales lifts during the period after the putbacks started, averaging +4.8% sales lift. The incremental sales were on average $4.68 for every incremental $1.00 TV dollar.
Some advertisers had begun to individually notice ROI declines which caused their movement back into TV, according to anecdotal evidence. Then when ARF in March 2016 came out with its first Ground Truth results, indicating that the optimal mix of TV and Digitalwas 78% TV, this may also have influenced other advertisers to turn back, since as of Q1 2016 SMI data show that the average such mix among the top 100 is only 64% TV, 14 points shy of the optimal point.
Looking at the results for all CPG advertisers in the top 100 spenders, types A, C and D which all involve TV increases, showed sales increases of +4.8%, +4.0%, and +7.9% respectively. Types B and E where TV is decreasing showed sales increases of +4.7% and +1.1% respectively. All advertisers in types A and D (where TV is going up and Digital down) showed sales increases, whereas the sales patterns within the other types were mixed, some up, some down.
Looking at Non-CPG, all 4 in type A (TV returners) increased sales, averaging +8.8%. By contrast, those continuing to deplete TV in favor of Digital went down in sales averaging -3.1%.
As previously reported, we ranked the 29 advertisers for which we had sales data by their sales increase, finding a dozen substantially higher than the others, averaging +14.6% in sales growth. At first we tried to explain this based on the types of Digital they are using, but other than being ahead of the others in the use of pure play Digital video and lower than in the others in the use of search, the differences were extremely minor and not likely to drive major sales differences. Then we looked at TV and it jumped out us that these 12 fastest sales growers had increased TV spend by an average of +25.8%.
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The lessons of the first set of ARF Ground Truth data predicted these sales results, indicating that media synergy was strong and therefore Digital and all media should be used along with TV, but with incremental budgeting, not taking hardworking TV dollars away for these new adventures. It seems they were right. Good thing Ground Truth is just getting started, we need it!
The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage.com/MyersBizNet, Inc. management or associated bloggers. Top photo courtesy of freedigitalphoto.
Bill Harvey has spent over 35 years leading the way in media research with pioneer thinking in New Media, set top box data, optimizers, measurement standards, privacy standards, the ARF Model; and inventions such as ADI/DMA, addressable commercials, passive peoplemeters, media/purchase singlesource by Big Data matching (4 U.S. patents assigned to TRA, Inc.). Co-Founder of Next Century Media and New Electronic Media Science, third party research companies serving 70+ of the top 100 advertisers, as well as most of the major cable and satellite operators, networks, agencies, and other research companies; first to turn set top data into TV audience data to media research standards; leader of standard setting process in media measurement through ARF, 4As, ANA; former executive of Arbitron, Interpublic, Grey Advertising, and OpenTV. Inventor of addressable commercials and passive peoplemeter concepts, consulted on PPM and ScanAmerica with Arbitron, developed first automated marketing mix modeling system for General Foods. Initiated and spearheaded the writing of the industry privacy principles for the ANA, 4As, and ARF joint task force CASIE (Coalition for Advertiser Supported Information and Entertainment). Co-Founder of TRA, the first company to merge singlesource and Big Data. First named inventor on TRA’s three U.S. patents.