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Commercial TV Isn’t Quite Dead Yet

Randy Sukow Mar 7, 2016

And here I thought TiVo was all about being able to skip over the commercials.

According to a new study by TiVo Research, a subsidiary of the DVR folks, TV commercials still do a very good job of driving sales in spite of the lengths some people go to avoid them. The study found that companies cutting their TV advertising budgets for consumer packaged goods (CPG) brands tend to see significant declines in sales. It analyzed 15 CPG brands that cut their TV budgets over a period from 2013-14 and found that 11 of them experienced decreased sales.

“Sales returns dropped by a combined $94 million when TV spend was cut year-over-year. This accounted for 69 percent of the 2013 incremental sales attributed to TV advertising. In 2014, the average on-air brand was reaching only 25 percent of its purchasers in an average week , leaving 75 percent open to competition,” according to a press release from TiVo Research and 84.51°, a consulting firm that participated in the research. The study also found that for every dollar reduced in the TV advertising budget, CPG brands lost three times as much in sales.

“In today’s multiscreen content universe, consumer brands are reallocating advertising dollars to digital spend, however, our research found that TV advertising is more effective than ever. This study confirms a direct link between TV advertising spend and ROI for brand advertisers,” said Betsy Rella, VP, Research for TiVo Research.

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