Are TV commercials really effective? What are the effective ways to evaluate them?

For companies, getting the public to know and understand their products and services is a very important marketing strategy. Even though many companies understand that television commercials are effective in raising awareness, they refrain from investing in television commercials due to the high advertising and production costs.

Meanwhile, in recent years, online advertising has become more prevalent with the spread of the Internet. The number of companies using online advertising is on the rise, as it is possible to start with a small advertising budget and the effectiveness of advertising can be easily visualized using methods such as cookies and third-party delivery.

However, simply asking "Should we stop TV commercials and focus exclusively on digital?" is a bit premature and wasteful, considering current user behavior. This is because TV usage is still the highest among all age groups, and it is common to see people using TV and the Internet at the same time, such as posting on Twitter while watching a drama or variety show. So how should we evaluate TV commercials?

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General methods for evaluating TV commercials

It is difficult to measure the impact of TV commercials on business results. Conversions are not directly visible with TV commercials, as they are with online ads. That being said, it is not realistic to ask detailed questions of every TV viewer across Japan. For this reason, TV commercials are generally evaluated in the following ways:

How to compare numbers before and after a commercial

This is a method of investigating how much change has occurred from the past average figures during or after the broadcast period of a television commercial, and calculating the difference.

• Changes in the number of searches for company/product names
• Changes in website traffic
• Changes in retail store traffic
• Change in number of items sold

Methods of investigating individuals through investigation companies, etc.

Since it is not possible to survey everyone who has watched a TV commercial, this method involves surveying a certain percentage of data to infer overall trends.

• Consumer survey
• Investigating TV viewing logs and web behavior history from smart TVs and other devices belonging to authorized consumers

What is an effective way to evaluate TV commercials?

We have listed several methods for evaluating TV commercials, but which method is the most accurate in evaluating the effectiveness of TV commercials? In fact, none of these methods are accurate enough on their own. To improve accuracy, it is necessary to use multiple evaluation methods and examine the accuracy of the changed values. However, there are still issues that do not take into account the vagueness of human memory, or external factors such as the season, weather, and competitors' marketing strategies. In this case, an effective method is to analyze the correlation between various factors, such as advertising strategies and external factors, and the results.Statistical evaluation methodI

A highly accurate method for evaluating TV commercials using statistics

So how can we use statistics to analyze the effectiveness of TV commercials? In this case, one method is "path analysis." For example, a "simple regression analysis" of the relationship "as the number of searches for listing ads increases, the number of conversions increases." However, it is common for companies to implement multiple measures simultaneously to increase the number of conversions.

Therefore, in addition to listing ads, it is also necessary to add analysis such as "as the number of accesses via display ads increases, the number of conversions increases." Since there are two strategies, listing ads and display ads, in order to determine the relationship with the number of conversions, it is necessary to use multiple regression analysis rather than simple regression analysis. In this example, the multiple regression analysis has one objective variable, the number of conversions, and two explanatory variables, listing ads and display ads. "Path analysis" is an analytical model that has multiple objective variables and multiple explanatory variables.

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The reason why multiple objective variables are necessary is because if there is only one objective variable, it is not possible to know how each measure affected the results. Let's consider the previous example. Since listing ads generally have a high conversion rate, it may be reasonable to assume that they have a strong influence on the result of increasing the number of conversions.

On the other hand, what about display ads? They may have an impact on the number of conversions, but they may also contribute to an increase in the number of searches for paid ads. In this case, the objective variables for display ads are conversions and paid ads.

In this way, if you use path analysis after considering in advance what impact a TV commercial will have on results, you will be able to analyze the TV commercial as accurately as possible.

To perform more accurate analysis

We have given an example of analysis using path analysis, but to improve the accuracy of this method, it is necessary to collect as much data as possible, not only on all the marketing measures implemented by the company, but also on the season, weather, competitors' marketing measures, etc., and analyze each of them multiple times. However, it is an extremely difficult task for a company's analyst to analyze all of this. In many cases, problems such as excessive man-hours, calculation errors, and omissions in calculations will occur.

We provideMarketing Mix Modeling (MMM) analysis service called "MAGELLAN"is a tool that solves these problems. By loading all the marketing measures implemented by a company and daily data on their results, as well as as much information as possible about competitors, seasons, weather, etc. into MAGELLAN, it can automatically analyze and visualize the effectiveness of TV commercials. Some of the visualized analysis results are shown in the figure below.

This calculates and graphs the degree of influence of each measure and external factor on the results using a common indicator called the contribution value. MAGELLAN allows you to compare offline ads such as TV commercials and transportation ads with online ads such as listing ads and display ads using a common indicator. Furthermore, it calculates the "How much did it contribute to the outcome?This will allow for a fair comparison using the same indicator, "

My Feelings, Then and Now

Compared to digital advertising,Cost-effectiveness is hard to seeAs a result, investment in TV commercials is being curtailed. However, TV commercials are simply less visible, and in reality they still have a large influence. Stopping TV commercials is likely to have an impact on business results in the short, medium and long term, such as a decrease in the number of brand-name searches and a drop in brand recognition.

The direct effects of offline advertising, such as TV commercials, flyers, and transportation ads, are difficult to see. However, by using a statistical evaluation method such as MAGELLAN, it is possible to properly evaluate offline advertising, which may be underestimated.

This allows you to compare all marketing initiatives on a flat basis and optimize your results.The best investmentIt will be possible to do so.

Author information

XICA Co., Ltd. Marketing Team