TV Advertising Effectiveness and Profitability • Hacker News Board

Re: TV Advertising Effectiveness and Profitability

#41

Post by hammock » Tue, Jul 27, 2021, 7:09 PM UTC

mjburgess wrote: post #36

andreilys wrote: post #32

Earlier quoted context omitted.

And for these reasons hard if not impossible to measure or control for confounders - but that doesn't mean it doesn't work!! One of the ways that advertisers and marketing people stay employed is they say that the output of their effort and money spent is not quantifiable.

Indeed. When I walk into the store there are a very limited number of colas on offer: a can of pepsi, a can of coke, etc. What exactly is the advert for ? My choice has largely been made.

A lot of marketing money is "paid" (simplifying here, but I can expand if desired) to get that shelf space from the store, as well, in ways that you probably didn't know/haven't thought about.

Re: TV Advertising Effectiveness and Profitability

#42

Post by zhdc1 » Tue, Jul 27, 2021, 7:09 PM UTC

echelon wrote: post #31

hammock wrote: post #27

There is a fundamental misunderstanding (intentional or not) with these types of studies and claims. Limited-time promotions, e.g. a 10% off sale, work on short timescales that are easily measured. You can easily say what the ROI is of an advertised promotion, and it is often positive. (Side note, these promotions have a more-difficult-to-measure detrimental effect on your long-term profitability, closely related to…

> Source: Been on the leading edge of marketing and advertising for over 12 years Would you say that might be a source of bias? Look at SpaceX and Tesla. They barely advertise and have huge brand recognition. I'd buy Sennheiser over Beats. Krispy Kreme over Dunkin. Costco. My partner loves Zara. I don't have a high opinion of brands that advertise.

Academics divide awareness into status (perceived quality) effects and reputation (actual quality) effects. Paid marketing influences both, but there are other ways of getting your name out there, and some companies are better at it than others.

> I'd buy Sennheiser over Beats

Sennheiser has a higher reputational quality than Beats, but most people know of Beats because of Beats' affiliations (status) and their large marketing budget.

Re: TV Advertising Effectiveness and Profitability

#43

Post by handmodel » Tue, Jul 27, 2021, 7:11 PM UTC

mjburgess wrote: post #36

andreilys wrote: post #32

Earlier quoted context omitted.

And for these reasons hard if not impossible to measure or control for confounders - but that doesn't mean it doesn't work!! One of the ways that advertisers and marketing people stay employed is they say that the output of their effort and money spent is not quantifiable.

Indeed. When I walk into the store there are a very limited number of colas on offer: a can of pepsi, a can of coke, etc. What exactly is the advert for ? My choice has largely been made.

I think I have the opposite reaction from the same data. The reason I can't get my own sugar water on a grocery store shelf is because the grocery store doesn't want to give space to something that only sells half as well. And, they are humans too, so I'm sure they are biased by the ads/perception of what they think other people want.

I think a lot of the long-term bonus of ads is to simply build a moat that other competitors find difficult to surmount.

Re: TV Advertising Effectiveness and Profitability

#44

Post by retzkek » Tue, Jul 27, 2021, 7:11 PM UTC

rhizome wrote: post #38

retzkek wrote: post #19

Earlier quoted context omitted.

There's at least one group that likes drug ads: the advertising industry. High-dollar clients with long commercials (to fit in all their required disclaimers), and they're probably the ones with the connections to the appropriate regulators. Personally I absolutely despise drug commercials, there's not much that will make me change the channel, mute, or turn off the TV faster. Is there a more blatant display of the f…

It's not even attributable to "capitalism," per se, because the US and New Zealand are the only places on Earth where they are legal. I may be blinkered as to global laws, so maybe I'll just say the Western Earth.

Sure, that's fair, I suppose I was specifically thinking of US-flavored capitalism, which is undoubtedly its own beast.

Re: TV Advertising Effectiveness and Profitability

#45

Post by wisemanwillhear » Tue, Jul 27, 2021, 7:12 PM UTC

hammock wrote: post #27

There is a fundamental misunderstanding (intentional or not) with these types of studies and claims. Limited-time promotions, e.g. a 10% off sale, work on short timescales that are easily measured. You can easily say what the ROI is of an advertised promotion, and it is often positive. (Side note, these promotions have a more-difficult-to-measure detrimental effect on your long-term profitability, closely related to…

> Brand advertising, in contrast, works on a spread-out scale of years or decades. When Coca-Cola runs a polar bear ad at Christmastime they don't do it to increase sales of Coke that week, nor should it be measured that way.

Curious... A year ago, an older lady gave our daughter a little Coca-cola polar bear stuffed animal. It seems their advertising dollars are still having an "influence".

Re: TV Advertising Effectiveness and Profitability

#46

Post by edmundsauto » Tue, Jul 27, 2021, 7:12 PM UTC

mjburgess wrote: post #36

andreilys wrote: post #32

Earlier quoted context omitted.

And for these reasons hard if not impossible to measure or control for confounders - but that doesn't mean it doesn't work!! One of the ways that advertisers and marketing people stay employed is they say that the output of their effort and money spent is not quantifiable.

Indeed. When I walk into the store there are a very limited number of colas on offer: a can of pepsi, a can of coke, etc. What exactly is the advert for ? My choice has largely been made.

1. You may already have a brand, but many don't - so they want people to switch.

2. People who don't drink soda need to get hooked somehow!

3. Increasing consumption. Think about the "Got Milk?" campaigns of the 90s - they weren't saying "drink XYZ brand milk", they were looking to increase milk consumption.

I think #3 is probably the biggest factor, tbh. That's why you see ads for cotton, milk, beef, avocado, etc.

Re: TV Advertising Effectiveness and Profitability

#47

Post by handmodel » Tue, Jul 27, 2021, 7:13 PM UTC

echelon wrote: post #31

hammock wrote: post #27

There is a fundamental misunderstanding (intentional or not) with these types of studies and claims. Limited-time promotions, e.g. a 10% off sale, work on short timescales that are easily measured. You can easily say what the ROI is of an advertised promotion, and it is often positive. (Side note, these promotions have a more-difficult-to-measure detrimental effect on your long-term profitability, closely related to…

> Source: Been on the leading edge of marketing and advertising for over 12 years Would you say that might be a source of bias? Look at SpaceX and Tesla. They barely advertise and have huge brand recognition. I'd buy Sennheiser over Beats. Krispy Kreme over Dunkin. Costco. My partner loves Zara. I don't have a high opinion of brands that advertise.

I think its fair to say that the reasons a rocket company does not need to advertise dont apply to companies that people buy weekly/monthly on a grocery store shelf.

Besides, the advertising budget of other government contractors/satellite companies is also close to zero.

The better question is "If I ran Pepsi today - would I drastically lower the advertising budget". I'm not sure what my move would be but I don't think looking at short term ROI of TV ads would be informative.

Re: TV Advertising Effectiveness and Profitability

#48

Post by wyldfire » Tue, Jul 27, 2021, 7:13 PM UTC

ohazi wrote: post #11

Animats wrote: post #2

TV ads. Where you can't measure response rate directly.

Also where "modern" "smart" platforms decide it's acceptable to chop up a video into a dozen slices and insert the same. exact. ad. in between each segment, causing half the viewers to swear off that brand for life?

I don't know if it's for a lack of bidders, or if the ads are that way by design. Some of what you're paying for is brand identification and repetitive commercials are one way to get that. Despite however annoying it might seem. The pool being advertised to will consider the advertised brand when 'Good/Service Need X' arises, whereas they likely would not without the ads.

Re: TV Advertising Effectiveness and Profitability

#49

Post by nickff » Tue, Jul 27, 2021, 7:14 PM UTC

handmodel wrote: post #43

mjburgess wrote: post #36

Earlier quoted context omitted.

Indeed. When I walk into the store there are a very limited number of colas on offer: a can of pepsi, a can of coke, etc. What exactly is the advert for ? My choice has largely been made.

I think I have the opposite reaction from the same data. The reason I can't get my own sugar water on a grocery store shelf is because the grocery store doesn't want to give space to something that only sells half as well. And, they are humans too, so I'm sure they are biased by the ads/perception of what they think other people want. I think a lot of the long-term bonus of ads is to simply build a moat that other co…

I think you're overlooking a couple of grocery-specific issues.

Many major retailers will require that new brands invest a certain amount of money in advertising product to their region/market before stocking the product. It's also common to 'lease' shelf space to manufacturers.

Re: TV Advertising Effectiveness and Profitability

#50

Post by btilly » Tue, Jul 27, 2021, 7:14 PM UTC

hammock wrote: post #27

There is a fundamental misunderstanding (intentional or not) with these types of studies and claims. Limited-time promotions, e.g. a 10% off sale, work on short timescales that are easily measured. You can easily say what the ROI is of an advertised promotion, and it is often positive. (Side note, these promotions have a more-difficult-to-measure detrimental effect on your long-term profitability, closely related to…

And how do you measure the value delivered?

If you're not measuring value delivered, how do you know that you're actually delivering value? Remember, you're the person that you can most easily fool.

Fields as diverse as active fund management and psychic readings have been filled with practitioners who were wrong about the value that they thought that they were delivering. I have no particular reason to believe that brand management isn't another.