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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