TV Advertising Effectiveness and Profitability

Post by marrone12 » Wed, Jul 28, 2021, 12:04 AM UTC

rangersanger wrote: post #147

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…

Okay, I agree with everything you've said. In a "Data driven" organization, how do you prove that your brand marketing is working in order to protect it? A new leader comes in and says "this isn't adding value, you cant prove it's adding value, I'm cutting it unless you can prove it." What's your response?

Post by ErikVandeWater » Wed, Jul 28, 2021, 12:15 AM UTC

paxys wrote: post #6

DSingularity wrote: post #4

Earlier quoted context omitted.

Ouch. Never thought of it this way. I know it’s borderline anti-American — but when you have such compelling incentive structures at what point should we demand government regulation? If 80% of advertising is not helping consumers discover products — arguably the primary functional purpose of advertising — then isn’t this in a way an economic sickness wasting the resources and stifling innovation?

It's bizarre to me that the government hasn't stepped in to regulate/ban medical advertising in America. Nobody wants it – not consumers, not doctors, not even the drug manufacturers themselves.

Post by sumedh » Wed, Jul 28, 2021, 12:39 AM UTC

reader_mode wrote: post #71

slg wrote: 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.

Post by rasz » Wed, Jul 28, 2021, 2:50 AM UTC

bluGill wrote: post #117

MuffinFlavored wrote: post #105

Earlier quoted context omitted.

> 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.

Post by Spivak » Wed, Jul 28, 2021, 3:45 AM UTC

1123581321 wrote: post #7

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.

It’s partially a prisoner’s dilemma. Advertising reduces search costs for buyers to a certain point, after which it raises them again due to a glut of similar messaging. There is a moderate point at which buyers are hearing about enough potential options and are able to conduct a more effective search for products/vendors/sellers, and the cost is reasonable for the sellers (it reduces their sales costs, gets their ec…