Allocating Spend on Digital Video Advertising: Longitudinal Analysis Across Two Industries

Abstract

Firms have lately been increasing their investments in digital video advertising at the expense of television advertising. We examine the efficacy of such investments with a media efficiency and saturation analysis on longitudinal datasets from a national restaurant chain, and a national food and beverage brand. We find that digital video advertising is indeed more efficient than television advertising, and so a shift is justifiable. However, these differences in efficiency decrease rapidly as investment levels behind digital video advertising increase. The impact of digital video advertising saturates early and firms need to account for such diminishing returns in their media strategy.

Keywords: marketing effectiveness

JEL Classification: M11, M30