Do TV ads impact sales... at all?

Written By Ethan Decker

For most brands, TV advertising’s impact on short-term sales is ... basically zilch. 

That’s according to a big new study of over 250 leading US grocery brands from 2010-2014.

The researchers use a truckload of variables from Nielsen RMS, Homescan, and Ad Intel datasets. It’s an impressive study that uses some advanced analytics.

Applied Brand Science - Ad Elasticity.png

Key findings:

  • For the average brand, increasing advertising 10% will lift sales about 0.3%.

  • Week-to-week ROI on advertising is negative for two out of three brands.

  • For half of brands, over the course of the year, advertising is profitable.

HOWEVER, some thoughts:

  • There’s lots of bad advertising — but some good too. That’s to be expected.

  • Ads mostly help brands tread water since competitors are advertising too.

  • The real impact of good advertising is long-term, not short-term.

Shapiro, Hitsch & Tuchman, (2019). Generalizable and robust TV advertising effects. SSRN.

Ethan Decker
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