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Study: Forget Demographics, Pay Attention to Purchase History

May 27, 2010  •  Post A Comment

By Jack Neff
Advertising Age

Demographics have almost no effect on whether TV ads produce sales, and consumers’ purchase history is the most reliable predictor of success, according to research from TRA, which has been pairing data from set-top TV boxes with retail loyalty-card purchase data since 2008.

The gender and age of viewers has little correlation with the way those viewers respond to ads, TRA President Bill Harvey said at the Advertising Research Foundation 360 Measurement Day Workshop in Chicago.

"TV’s major sales effect tends to be among people who are heavy purchasers in your categories and occasional purchasers of your brand," Mr. Harvey said, calling such consumers the "swing voters" of package-goods marketing.

Research also suggests advertisers should not turn away from prime time, despite its higher prices, and try to substitute other segments of the day. Prime time’s sales return on advertisers’ investment generally trumps other day parts, Mr. Harvey said.

CBS was one of TRA’s earliest clients, but cable networks, package-goods agencies and media agencies are also part of its client base, and WPP’s Kantar division and Arbitron are among its equity investors. Intel Capital, the private-equity fund of the chip maker, announced a $10 million investment in TRA today as part of an $18.2 million third round of investments in the firm.

Mr. Harvey said TRA also has found a frequency of three times a week appears to maximize TV ads’ return on marketers’ investment, which he attributed to the "recency" effect of ads producing greater sales lift the closer they come to the purchase decision.
Even closer to the purchase decision, Mr. Harvey said TRA has found that trade promotion executed in concert with TV advertising produces better sales lift than either element on its own.

Price, however, doesn’t appear to be the biggest driver of trade-promotion synergies. Mr. Harvey said TRA has found a 69% synergy lift from the combination of TV with temporary price reductions, but a bigger 96% lift from a combination of TV with in-store feature and display.

But there are limits to what media choices alone can accomplish, Mr. Harvey said. The ads themselves matter most. "Data suggests 65% of TV ROI is attributable to the creative and 35% to the media," he said.##

The Value of Syndication

With the upfronts upon us, the Syndicated Network Television Association has come up with its latest study touting the value of syndication. The study is called "Young Adults: TV’s Age of Opportunity."

Some highlights:

· Syndication delivers young adult opinion leaders shopping for soft drinks/candy, technology, fashion, mobile, and particularly important to marketers as summer “officially” begins this weekend: those enjoying a night out at the movies, purchasing home videos or eating out.

· Syndie has more higher rated telecasts than first-run cable (i.e. “South Park,” “The Hills,” “Meet the Browns”)

· Syndie has more top 10 shows than Network and Cable each weekday

· Syndie’s sitcoms have reach comparable to all of Network Prime combined

· Syndication is watched “live” more than Network among young adults with DVR’s (40%)

To see a full presentation, click here.

48 Comments

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  2. this is an interesting report. the first time I am seeing a study on the ROI split between Creative and media. Do you have any history on any previous learning’s that may have been done of a similar nature?
    thank you
    Subhas Warrier

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