An independent study was conducted to address the short-term effects of reducing TV spend on brand sales. The driving force behind the study was the decrease in sales that resulted when budgets are reallocated and brands spend less on Television advertising.
11 of 15 consumer packaged goods brands that cut TV spending in 2014 experienced a drop in sales
totaling a $94MM. loss.
For every dollar cut from the TV budget, sales fell $3 dollars.
Companies that cut their TV ad spending reached fewer potential customers. This reduced ad spend
resulted in reach and frequency declines. Their commercials reached 25% of their purchasers, down
from 35% in 2013. This left 75% of those customers available to competitors.
The decline in reach and frequency led to a drop in sales/ROI. The average brand reduced their ad
budget by $3.1 MM, resulting in lost sales of $8.6 MM
Cutting TV budgets may seem like an effective way to save money, but as the study shows, TV is
powerful and brands stand to lose more in sales than they stand to gain in media savings.
Download the Full Report HERE (PDF)