The Video Advertising Bureau (VAB) recently released a new report, The Market-Changer’s Playbook: Why TV Is Where Disruptors Go To Grow Big, examining the TV advertising spend of 35 startup and tech companies labeled “disruptors”—including Facebook, Amazon, Apple, Netflix and Google, or “FAANG stocks.”
The report found that the companies’ investment in TV advertising consistently correlated with increased consumer engagement and higher revenues, regardless of the company’s product or service category. In the case of FAANG stocks, the data suggests that even established digital power players have found success investing in TV advertising and have collectively increased their annual spend by $800 million over the past five years, according to Nielsen.
The report categorized companies into three types of disruptors—Brand Building, Brand Expanding, and Established—based on age of the company and number of years spent advertising on TV.
Using syndicated, third-party data, the report analyzed the spend statistics from each category of disruptors against brand metrics such as website traffic, online interactions and revenue/sales or valuations for private companies.
Some key findings of the report include:
- The 35 brand disruptors collectively spent over $2.6 billion on TV in 2016, a 23-percent increase year-over-year and more than ever before for these brands.
- 14 “brand builder” disruptors like 23andMe, Casper and Lyft saw an 184-percent year-over-year increase on total digital actions—including increased search queries, social media actions, and total online views—with an increased investment on TV.
- For public “brand expanding” companies, revenues spiked after they launched a TV campaign or sharply increased TV spending. Dollar Shave Club and Care.com saw an over 100-percent increase in revenue upon launching a TV campaign or heavying-up on TV, respectively.
- In 2016, FAANG, the five major “established” digital disruptors, spent almost $1.4 billion on TV, up from $550 million in 2011.
“This report shows that the dozens of digital innovator brands that have leapt into our daily lives made that leap with TV,” said Sean Cunningham, president and CEO of VAB, in a news release. “When these disruptor brands aspired to their next maturity level—from real revenue growth and real scale, new customers in big volumes, or entrenchment into consumer’s usage vernacular—TV was the accelerant that drove their sales success and changed product categories. TV truly is the place where disruptors go to grow big.”
