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TV Advertising Effectiveness and Profitability

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Re: TV Advertising Effectiveness and Profitability

#191

Earlier quoted context omitted.

The third sentence of your link: "The value of a company’s brand name, solid customer base, good customer relations, good employee relations, and proprietary technology represent some reasons why goodwill exists." The first three are directly tied to advertising and brand-building. You call it "BS" for some reason (you seem not to believe in it), but it is a real thing and we have financial methods to account for it.

>we have financial methods to account for it. Could you go over some of them or point to some resource? I'd love to learn more!

== The Intangible Valuation Renaissance: Five Methods [0]

== 3 methods for valuing intangible assets [1]:

1. Under the excess earnings method, valuators forecast the after-tax cash flow that the asset is expected to generate. This method can be the most complex (and costly), but is also usually the most accurate.

2. Under the relief from royalty method, valuators forecast the revenue that the asset is expected to generate, then apply a comparable industry royalty rate and subtract taxes.

3. Under the cost method, valuators determine the cost to develop the asset (i.e. labour and materials), plus a reasonable return on that investment. This method is often used for early-stage companies where forecasts are difficult to prepare or in instances where information doesn’t exist to use the first two methods.

== Financial Valuation: Applications and Models [2]

"Coverage includes state-of-the-art methods for the valuation of closely-held businesses, nonpublic entities, intangible, and other assets, with comprehensive discussion on valuation theory, a consensus view on application, and the tools to make it happen."

[0] https://blogs.cfainstitute.org/investor/2019/01/11/a-renaiss...

[1] https://www.bdc.ca/en/articles-tools/change-ownership/sell-b...

[2] https://www.wiley.com/en-us/Financial+Valuation%3A+Applicati...

Re: TV Advertising Effectiveness and Profitability

#192
Freakonomics has an episode that talks with one of the authors and summarizes a lot of the discourse that's happening on this thread [1]. Note that it's a two parter, one for TV and one for digital. It does a good job grabbing the economist's view trying to measure the ROI and the advertiser's view, as discussed by hammock.

[1] https://freakonomics.com/podcast/advertising-part-1/

Re: TV Advertising Effectiveness and Profitability

#193

Earlier quoted context omitted.

>we have financial methods to account for it. Could you go over some of them or point to some resource? I'd love to learn more!

== The Intangible Valuation Renaissance: Five Methods [0] == 3 methods for valuing intangible assets [1]: 1. Under the excess earnings method, valuators forecast the after-tax cash flow that the asset is expected to generate. This method can be the most complex (and costly), but is also usually the most accurate. 2. Under the relief from royalty method, valuators forecast the revenue that the asset is expected to gen…

Many thanks my dude

Re: TV Advertising Effectiveness and Profitability

#194

Earlier quoted context omitted.

== The Intangible Valuation Renaissance: Five Methods [0] == 3 methods for valuing intangible assets [1]: 1. Under the excess earnings method, valuators forecast the after-tax cash flow that the asset is expected to generate. This method can be the most complex (and costly), but is also usually the most accurate. 2. Under the relief from royalty method, valuators forecast the revenue that the asset is expected to gen…

Many thanks my dude

Absolutely. It’s a very interesting industry as the idea of valuing “data assets” gets more mainstream.

Re: TV Advertising Effectiveness and Profitability

#195

Earlier quoted context omitted.

But it's hard to refute the case that it's not true. I haven't watched TV in years nor have I seen Coca Cola bear in a time longer than that but I'm still acutely aware of Coca Cola's brand. Another example where this is more clearly felt is consumer goods. I always buy Tide - I couldn't tell you why until someone pointed it out to me. When I went to college and had to buy detergent there was easily 10 brands of dete…

I always buy Tide because my mom used to work in the Clorox lab, and the techs there all agreed that Tide was the best.

What about Tide made it better?

Re: TV Advertising Effectiveness and Profitability

#196
post #28

Earlier quoted context omitted.

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?

I love this idea, but I sincerely doubt it.

Re: TV Advertising Effectiveness and Profitability

#197
post #60

Earlier quoted context omitted.

>Brand advertising, in contrast, works on a spread-out scale of years or decades...The actual effect that a brand advertisement has, is to add PENNIES (not dollars) to their sales every day, for the next 100 YEARS. It's a long-term investment. And for these reasons hard if not impossible to measure or control for confounders - but that doesn't mean it doesn't work!! Car brands are the obvious example of brand adverti…

And yet the most valuable car company in the world (for whatever that's worth) spends 0 on advertising and sells everything they can produce.

Is that actually true? As in, their line item for marketing is 0? Not advertising, marketing.
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