Marketers have been shifting away their budgets from television advertising to digital alternatives that provide more straightforward scheduling and better targeting features. In response to this trend, the television industry is developing programmatic advertising, allowing brands to target households and schedule campaigns seamlessly.
Managers can use programmatic television advertising to increase their advertising effectiveness. One way of doing so is by timing the brand’s ads relative to that of competitors. AIM Professor Ivan Guitart and his coauthors analyze how brands can accomplish this.
The team assessed how the temporal proximity and intensity of advertising around a focal brand’s ad affects its effectiveness. They analyzed data from an online product comparison company that included more than 43,000 brand and 49,000 competitor ads.
They found that ads are the most effective when they air during hours and on television stations with no competitors’ ads. When competitors’ ads air simultaneously, and on the same station, brand ads are most effective when they outnumber competitor ads. If competitor ads outnumber those of the brand, brand ads become ineffective at driving conversions to the website.
The authors show that if the company studied in their paper had followed the two previous high-effectiveness strategies, they could have generated between 55% and 59% more conversions.