Though past studies have shown television advertising to be a strong driver of sales, a recent analysis from researchers at the University of Chicago and Northwestern University seemingly proves otherwise.
As described in Chicago Booth Review, the study found that, in fact, TV marketing's actual effect on sales was only about one-fifth as much as calculated in previous studies, which typically analyze only statistically significant positive sales results. That is, while past research might have an organization expect to see a 5 percent increase in sales after doubling TV advertising, in actuality, the increase would likely only measure about 1 percent.
The researchers concluded that their findings prove most organizations can benefit from advertising less, but conceded that maintaining a current TV advertising budget is preferable to completely eliminating it.
"Even though advertising may have a small effect, it may still be profitable when you consider each company's particular circumstances," said co-author Bradley Shapiro, PhD, an associate professor of marketing at the University of Chicago Booth School of Business.
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