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TV Advertising Effectiveness and Profitability

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Re: TV Advertising Effectiveness and Profitability

#111

Post by yupper32 »

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.

Those aren't great examples.

SpaceX and Tesla absolutely have marketing in the forum of a crazy CEO that makes the news a lot. SpaceX fancy rockets gives him a platform to spew crazy shit all the time and the media loves it.

Beats makes inferior products and yet has twice the revenue of Sennheiser. That's because of marketing.

Re: TV Advertising Effectiveness and Profitability

#112

Post by reader_mode »

scsilver wrote: post #93
reader_mode wrote: post #80

Earlier quoted context omitted.

But their supply is constantly expanding and demand is following right up. They have 0 ads and yet everyone knows about Tesla.

Elon is one giant ad, and he has equity. Just because its not defined as traditional advertising, doesnt mean they dont promote the brand. They have physical car showrooms with large tesla logos. They litterally spent millions to put a tesla in space...

But the study is about TV advertising effectiveness, and the OP mentioned it being very valuable in the auto industry. I just pointed out that the hottest brand in auto industry is spending 0 on TV or any ads for that matter.

Re: TV Advertising Effectiveness and Profitability

#113

Post by mbesto »

paxys wrote: post #3

Advertising is at its core a prisoner's dilemma. If every competitor in a certain space puts in $100 in advertising, they can all expect $0 in returns. However if a single company put in nothing they would be in a worse place because their competitors' returns would automatically become higher.

You mean zero-sum. Advertising is a zero sum game.

I can't find the tweet but someone referenced the fact that if you lump traditional and digital media together, the TAM of advertising has basically been stagnate for decades. We just think its grown because FB/Google/etc have gobbled it all up.

Re: TV Advertising Effectiveness and Profitability

#114

Post by bluGill »

edmundsauto wrote: post #46
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.

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.

#3 is because there are middlemen that don't count. The middlemen in dairy want you to buy their brand of milk. However the guy who owns the cows sells to whichever dairy gives the best deal (the big farms all have a contract with one dairy to supply only them, but there are enough small guys who sell to who ever they can). The guy who owns the cows wants you to buy milk and doesn't care what brand it is.

The same applies to the others you named: sure there are brand, but there is something large below the brand that doesn't care what brand, only that you are eating.

Re: TV Advertising Effectiveness and Profitability

#115

Post by dec0dedab0de »

sfblah wrote: post #28
Animats wrote: post #2

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

I work for a company involved in search engine advertising. While it's technically possible to track conversions, very very few customers actually do it. Some don't have a great way to track it (health-care products where there's a privacy issue, brand advertising, informational advertising, services where there's no obvious immediate call to action, etc.) Even among those who do track "conversions," I'd say under 10…

Have you considered that the marketing managers are the ones hiring the bots to meet their goals for a bonus?

Re: TV Advertising Effectiveness and Profitability

#116

Post by cbsks »

MuffinFlavored wrote: post #105
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…

> is to add PENNIES (not dollars) to their sales every day How much growth has Coca-Cola seen on their specific "Coke" line of products? How many people who don't already drink Coke, Coke Zero, or Diet Coke are going to be influenced by a (probably very expensive) TV advertisement reminding them that Coke as a brand of sugary drink exists? I feel like if they ever wanted to save millions and millions of dollars, they…

You and I certainly do not need to see any more Coca-Cola advertisements to remember that the brand exists when we are choosing what drink to buy. But there are hundreds of thousands of people born every day. If Coca-Cola stops advertising it may not impact their sales for years, but eventually they could fade away.

Re: TV Advertising Effectiveness and Profitability

#117

Post by bluGill »

MuffinFlavored wrote: post #105
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…

> is to add PENNIES (not dollars) to their sales every day How much growth has Coca-Cola seen on their specific "Coke" line of products? How many people who don't already drink Coke, Coke Zero, or Diet Coke are going to be influenced by a (probably very expensive) TV advertisement reminding them that Coke as a brand of sugary drink exists? I feel like if they ever wanted to save millions and millions of dollars, they…

The ketchup industry stopped advertising, and over the next 50 years their market share went down. Nobody knows for sure how much was stopping advertising, but nobody wants to take a chance.

Re: TV Advertising Effectiveness and Profitability

#118

Post by sumtechguy »

handmodel wrote: post #47
echelon wrote: post #31

Earlier quoted context omitted.

> 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 th…

Also Tesla does not 'need' to advertise, yet.

It is effectively advertised by everyone for Elon for near 0 dollars. Launch a rocket (different company) the article will mention Tesla for them. Talk about saving the environment guess who gets mentioned. Talk about power needs, Tesla comes up as cars are becoming a large consumer of electricity, solar, coal, nuke, etc.

His advertising is basically being done for free by companies who do not even really realize it.

Re: TV Advertising Effectiveness and Profitability

#119

Post by mbesto »

lupire wrote: post #14

Title is critically incorrect. It should be: > The ROI analysis shows negative ROIs at the margin for more than 80% of brands, implying over-investment in advertising by most firms.

I can't see the whole article, but if they don't mention advertising for brand recognition then they are missing half the puzzle (i.e. indirect effectiveness, which is almost impossible to measure).

Coca Cola doesn't shower 16-25 year males with ads because they think they'll walk out the door and go buy a can of Coke. They do it because when they have discretionary income (age 22+), they recognize the brand. This is impossible to measure precisely.

Re: TV Advertising Effectiveness and Profitability

#120

Post by bluGill »

tlogan wrote: post #63
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…

This is exactly the problem: it is impossible to measure how much advertising helps. And maybe there are some measurements but they are not known. You might be right or you might be wrong. For example, I do not see Tesla commercials on TV so I wonder if they will sell more cars in next decade if they advertise as other car companies? Is Tesla making a mistake?

> it is impossible to measure how much advertising helps

That is false. It is impossible to measure exactly, but statistics can put a range on it, confidence intervals, and other such things (which I've mostly forgotten since school). We can measure all this to close enough.

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