Want to Improve Your Business Revenue? Buy More TV Ads

There is one surefire way for companies to increase their business performance: up their TV ad spending. A new study from the Video Advertising Bureau looked at the correlation between TV investment (based on Nielsen-measured national cable and broadcast media) and key financial indicators. It focused on 100 large parent companies with significant media spending in nine advertising categories: automotive, CPG, entertainment, financial, pharma, restaurants, retail, travel and telco. Sixty of those companies increased their TV spending between 2011 and 2014, while the other 40 spent less. "2011 is really the point when we get out of the down economy, so we really didn't want to compare anything against hard-core recession years," said Jason Wiese, vp, strategic insights, VAB. "And we liked the spread of four years, because we really thought that would take out any sort of yearly anomaly that might have happened for certain companies." The findings: Almost all of the companies that increased their TV spending over the four years also saw substantial growth in revenue, stock price and earnings per share. Meanwhile, the companies whose TV spending decreased underperformed the averages of the 100 companies.

Those increasing their spending (by an average of 40 percent) on TV -- including Apple, Coca-Cola, Marriott, Comcast and United Airlines -- saw a 26 percent increase in revenue over the same period. Those companies also had stock prices that overindexed the S&P 500 with earnings per share increasing an average of 38 percent. In contrast, the 40 companies that decreased their spending over the four-year period (down 15 percent, on average) -- including General Mills, Sony, Disney, Home Depot and Mattel -- had revenue increases of 7 percent, while their average stock prices underindexed the S&P 500. Earnings per share were up 5 percent