CBS: The Best Way to Build Brand Equity? More Television Advertising

My questions to advertisers are: Do you know how effective your TV campaign is? Do you know its ROI? If you do, do you know the loss in effectiveness when you reduce the size, scope and reach of that campaign by cutting back TV to move money into digital?

I see two very specific trends that are not only counter-productive to the advertising industry but also are eroding the equity of major brands. These trends are:

1. "Leaning The Mix" which actually refers to getting rid of the fat in cooking. In regard to media, this has come to mean buying less expensive ad inventory by either buying cheaper TV or cutting back on TV in an attempt to save money. That is not trimming the fat; it is cutting out the meat.  The supposed savings come at the expense of reach and impact, ultimately hurting the brand.

2. The Move to Digital -- siphoning off TV funds to fund digital campaigns -- is another area fraught with brand risk for advertisers. Let me explain. Many of these new digital opportunities have offered advertisers extraordinary marketing tools and CBS is a major player in digital media.  However, all of the research points to the fact that the last place to fund digital is from the TV line of the budget. Digital, from search to Internet video, is most efficient when it is supported by a TV campaign. Funding digital by reducing a TV campaign immediately starts out at a handicap; less people are impacted by your digital ads because less people see your TV ads. We have found that digital is most effective when it is used in combination with TV.

Pre-recession in 2007, 24% of marketing dollars went into advertising. Today it is 21.5%. So there is less spending overall on advertising. Marketing efforts are going somewhere else. If you can capture back the money from some of these less effective undertakings to fund digital, you don't have to reduce your TV budget. We are advocating the execution of digital campaigns in the context of an overall campaign that includes reach-producing TV advertising. You should then measure the results by using the new analytic tools that demonstrate the true impact of TV in combination with digital.

Let's take search as an example. When you invest money in search, you are tapping into the normal process of consumer adoption. That is, the customer becomes aware of the product or service via advertising, develops an interest in it, and that interest motivates them to seek to learn more about it through the use of search. Awareness and interest are generated via TV advertising leading to digital search which drives interest into desire, and eventually to a purchase. If you cut TV, there is less TV exposure working to drive search.

During the 2008 recession, advertisers were challenged by their CFOs and, under financial pressure to reduce budgets, looked at their media mix and thought that they had too much TV.  It was not that they shouldn't advertise at all on TV but that they were spending too much on TV on a percentage basis. The financial people were demanding proof that all of the advertising either delivered positive returns or budgets would be lowered. Media buys at 1000 GRPs, for example, were expected to get the same number of GRPs but for less money. The pressure was on.

Media costs during that time continued to rise so that even getting the same amount of media year to year was challenging. So the media mix changed -- less primetime TV, more cable, more run of schedule -- in order to get more GRPs. This was an efficiency based approach. The problem is, though, that the power of TV is not primarily in its efficiency but in its reach. One simple truism in advertising is that no matter how efficient advertising is, it won't work unless people see it. Buying less premium inventory can reduce the CPM but at the cost of lower reach. And we now can prove this through single-source measurement.

In the formative days of media buying, advertisers used to do their own custom research with marketing mix modeling. But the industry lacked a full compendium of data as well as the comprehensive framework to do a full analysis of ROI. Today, advertisers can analyze all types of campaigns because the data is more complete and the databases are larger and more stable. We can now combine sophisticated research techniques with enhanced data bases to measure ROI with more precision. Now that we have all of this innovative knowledge at our fingertips, we as an industry need to move from "counting the house" (totaling up impressions) and focus more on actual campaign results through the full sales cycle.

I have seen a great deal of change in my 46 years as the head of research at CBS and from my studies as an adjunct professor at both NYU and Columbia. Through the years I have conducted and collaborated on a great deal of analysis on how advertising contributes to the marketing process. What I continue to find is that TV is unrivaled in its marketing and sales abilities. Based on this experience, I would recommend that you employ the new analytical tools available today before assuming that you have too much television advertising. You may well find that you do not have enough.

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