In the TV sales business we get asked a lot by prospective advertisers, “How am I going to measure whether or not my TV ads were successful?” This is the $64,000 question. No one, I repeat, no one has this formula down to a perfected science (otherwise they’d be running an ad agency boasting all 100 of the top 100 ad spenders in the world).
The Video Advertising Bureau, however, has just released a study which posed the question, “How is TV advertising spend correlated to company revenue growth?” They reviewed 100 big ad spenders from 2011-2014 (post-recession and a span of four years – a solid data set), and the results might surprise you.
- 60 of the 100 companies increased TV spend from 2011 to 2014, while 40 companies decreased TV spend
- The companies that decreased TV spend saw a 7% increase in revenue.
- The companies that increased TV spend saw a 26% increase in revenue.
In an advertising world of “could-have-influenced” and “might-have-attributed-to,” this data is about as black and white as it gets.
One could argue a “correlation is not causation” argument here, which would go something like this, “the successful companies experienced growth, generating higher profits, which gave them a bigger budget to advertise.” While this may have proven true in some cases, the observation that 58 out 60 major corporations saw a positive correlation between revenue growth and TV ad spend growth is undeniable proof that TV advertising is an integral success ingredient in a large company’s marketing strategy.
Even a digital company like Zillow admits “TV advertising still works” to reach today’s consumer, and that advertising on TV “is a great way to grow the Zillow brand.” See Zillow CEO Spencer Rascoff elaborate on the subject in this CNBC interview.