Why many Internet brands should advertise on TV, in 5 charts

While all the attention is focused on search term or last site visited, maybe Internet-based companies should be focusing on an older, more staider place to shift their ad dollars: the idiot box.

A new study from Cable Television Advertising Bureau shows via data that more internet companies like eBay and Netflix are putting ad dollars onto the television, and are finding a direct, positive correlation between TV spend and website traffic. “I was surprised at how direct the corollary was between dialing up TV spend and finding increased revenue,” said Sean Cunningham, CEO, Cabletelevision Advertising Bureau. “This corollary is very real.”

What CAB dubs “pure-play internet brands” have increased TV investment by more than one-third in the past five years.

Of the 75 Internet brands analyzed by CAB, 63 exhibited a direct, positive correlation between TV spend and website traffic. Using data from Nielsen Adviews, the CAB crunched numbers on TV spend between February 2013 and April 2014 and found that for 38 advertisers, increased spend meant 33 percent more unique visitors to the websites.

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An analysis of some of those advertisers shows, for example, that Priceline, which decreased TV spend 25 percent in the six months preceding April 2014, found a 24 percent drop in the number of unique visitors coming to its site. In compairson, Ancestry.com spent 22 percent more, and found 21 percent more people coming to its site.

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Another report, created by Deloitte, also found that TV ads were the primary generator of website traffic.

One interesting trend that Cunningham of CAB pointed out was how television was being used by these brands as beyond what he calls an “introductory phenomenon just to establish a brand,” something that many people would expect is de rigueur for an online brand. “It had to have paid out over multiple years.” To figure that out, the CAB crunched a TV spend vs. revenue analysis of 12 different categories. Below is the 12-company total, which shows that revenue per dollar spent on TV increased exponentially.

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