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Cutting Tv Advertising Hurts Sales www.cablespots.tv Published Daily For Subscription call 1-888-884-2630 Fax: 866-870-6989 [email protected] $250 Per Year Tuesday, March 8, 2016 Copyright 2016. CUTTING TV ADVERTISING HURTS SALES LOST SALES THREE TIMES AD ‘SAVINGS’ ADVERTISER NEWS There’s been growing evidence that digital advertising Just as McDonald’s sales got a boost when it produces significantly lower ROI than television for introduced all-day breakfast, Burger King may have consumer packaged goods (CPG) brands. Now hit a home run with its recent introduction of hot dogs. independent research by 84.51° spells out just how much Nation’s Restaurant News reports that in a conference it costs CPG brands in sales when they shift TV budgets to call the CEO of Carrols (BK’s largest franchisee) noted digital in an attempt to “save” money. The study, conducted an “overwhelming response” to the menu addition, saying along with TiVo Research, found that most of the brands “We are selling between 80 and 120 grilled hot dogs per studied lost about three dollars in sales for every one dollar store per day” even before the start of advertising for the they had reduced television ad spend. new item……In a related note, NRN says lower prices for The study analyzed 15 random brands that had reduced beef have led restaurants to offer lower prices (such as TV spending by at least 25% between 2013 BK’s 5 for $4 deal and Wendy’s 4 for $4 deal) or and 2014. The brands analyzed by 84.51° (a to use a higher quality of meat than previously consumer engagement consultancy owned by offered. One purchasing exec expects more of Kroger) covered a variety of categories including the same with meat prices due to fall another 10- beverages, candies, snacks, ingredients and 23% this year, depending on the cut of meat…… others. The research was sponsored by cable Automotive News says February was the network owners Turner (part of Time Warner) industry’s most fleet-heavy month in almost six and A+E Networks. years. We had reported last week about General Reduced TV ad spend led to a combined Motors’ decision to cut back on fleet sales in $94 million loss in return for 11 of the 15 brands, order to concentrate on more-profitable sales, accounting for 69% of the 2013 incremental but fleet sales were up 39% for Fiat Chrysler, sales attributed to TV advertising. Brands 42% for Ford and 54% for Nissan……Cadillac averaged a 25% weekly reach, leaving 75% open to has a big launch coming up next month: the XT5 crossover competition. And reduced TV ad spend resulted in reach replaces the SRX, which accounts for almost 40% of all and frequency declines for 11 of the 15 brands, leading to Caddy sales in the U.S. While overall Cadillac sales trail the drop in sales and ROI. luxury imports by a significant margin, the SRX was second On average, the 11 brands spent $3.1 million less on in the midsize luxury crossover segment and was up 29% television advertising during the comparison period. At the last year to over 68,000 sales……Abercrombie & Fitch same time they lost an average $8.6 million in sales. had a 1% increase in same-store sales for the quarter that Average quarterly frequency fell from 11.6 to 6.8 per ended on 1/30, the first positive since the third quarter of household. Previous TiVo Research studies have found 2012. It expects flat to slightly positive comps this year…… that a frequency of three per week is typically optimal for American Eagle had a 4% same-store increase and maximizing ROI on TV spend. The report notes that three expects mid-single digits gains this year. There’s some exposures per week equates to a 39 average frequency thought however that same-store gains for surviving stores per quarter—“dramatically higher than the 6.8 average may have been helped by the closings of other stores…… found in this study.” Although same-store sales for domestic Ace Hardware On average, the brands reached less than 7% of their members were up 4.6% last year, the co-op says most of purchasers in the optimal 3-5 weekly frequency range, its stores have missed fourth quarter sales opportunities. leaving 93% of their markets open to being picked off by At its spring membership meeting CEO John Venhuizen competitors. “This number was low to begin with in 2013 told attendees Ace has spent exactly $0 on national TV (8.4%), but declined further in 2014 as a result of reduced advertising in December over the last 89 years, but this year TV spend,” the 84.51° report stated. has budgeted over $13 million for November-December The conclusion from the report: “Cutting TV budgets television. He also suggests members look for new and may seem like an easy way to save money, but as this innovative merchandise, saying, “If all we sell is the same study shows, brands stand to lose more in sales than they undifferentiated crap you can buy online, we’re dead”…… stand to gain in media savings.” Research firm Acosta reports health and beauty care sales 84.51° also urges comprehensive ROI analyses for all at grocery stores are improving after years of decline, with Continued on Page 2 about 18% of the $84 billion market done there. PAGE 1 www.CableSpots.tv CABLENET CHATTER PROGRAMMATIC AD BUYING MOVING IN-HOUSE NBC Sports Group has partnered with Premiership A survey conducted by the Association of National Rugby on an exclusive multi-year U.S. media rights Advertisers (ANA) and Forrester finds that the number agreement. Per the deal, which begins with the 2016-17 of marketers using programmatic ad buying has exploded season, NBCSN and NBC Sports Live Extra will combine since a previous survey in 2014, with 79% of respondents to present more than 75 Aviva Premiership Rugby saying they have made programmatic buys in the past matches each season, highlighted by “Game of the Week” year—more than twice as many as in the 2014 survey matchups……Freeform picked up a fourth season of the (35%). That growth has come despite serious concerns original comedy series Young & Hungry. Production on the among marketers about digital ad fraud and a perceived new season begins this week. Season to date, Freeform lack of transparency. As a result of their concerns, 31% says Young & Hungry is cable TV’s #1 scripted original of respondents said they have expanded their in-house series in its time period in target Adult capabilities to manage and oversee 18-34 and Adult 18-49 demographics… programmatic ad buying. …E! has ordered a second season of Programmatic buying in the past Hollywood Medium with Tyler Henry. In Orange County, a college year was highest for online display, The series follows the 20-year-old go-to student ate In-N-Out for 30 online video, mobile display, and mobile clairvoyant of celebrities, Tyler Henry, straight days and only gained video. In the next year, the media as he brings his clients messages from two pounds. That’s right, he with the most anticipated growth are beyond. The network recently extended went from 398 to 400. social video, social display, mobile the season one order with two additional video and television. Respondents episodes and is currently airing new to surveys in both years indicated episodes every Sunday at 10:00 pm Conan O'Brien the leading benefits of programmatic (ET). Hollywood Medium with Tyler buying were better targeting and real- Henry premiered Sunday, January 24 time optimization. as E!’s most watched unscripted series On the negative side, almost 70% launch in three years with total viewers, excluding spin- of respondents cited higher bot fraud in programmatic offs. The series has continued its momentum averaging buys as a concern. At the same time, varying numbers nearly 900K P18-49 and 1.6M total viewers in L3s…… of respondents said a lack of transparency regarding the Craig Robinson has been cast as a recurring guest star costs associated within the programmatic supply chain, a in the second season of USA Network’s drama series Mr. lack of inventory and data transparency, and a dearth of Robot. Robinson will star as “Ray,” a neighborhood local information about whether an agency reaps financial gains who reaches out to Elliot in his time of need……Jessica from the media seller by using the client’s funds all posed Camacho, who currently co-stars in FOX's series Sleepy challenges to the overall programmatic experience. Hollow, has been cast in the Discovery miniseries Harley “While programmatic buying indeed offers benefits, it and the Davidsons to air later this year. Camacho will suffers from complexity and a lack of transparency,” said portray “Reya,” a strong and fearless member of an early Bob Liodice, president and CEO of the ANA. “And that is Harley-Davidson motorcycle club. She joins a cast that wasteful,” he added. currently includes Michiel Huisman, Robert Aramayo, Bug Hall and Stephen Rider…...Worlds collide as GETTING SKINNY IN OHIO the voice cast of the 1980s Turtles, Cam Clarke, Rob Cincinnati Bell is the latest MVPD to roll out a “skinny Paulsen, Barry Gordon and Townsend Coleman, join bundle” product, declaring that “It’s time to love TV again forces as Leonardo, Raphael, Donatello, and Michelangelo, with MyTV!” The new offering launched yesterday gives respectively, in ''Trans-Dimensional Turtles,'' a new episode consumers customized, genre-specific bundles. The basic of Nickelodeon's Teenage Mutant Ninja Turtles debuting service for $18.99 per month (for the first 12 months) Sunday, March 27, at 11:00 am (ET).
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