TiVo’s always had a bit of a marketing problem. Yet it’s not exactly clear if it’s because their value proposition is difficult to communicate (possibly) or their efforts are misguided (definitely) or a bit of both (likely). But it’s deliciously ironic that they’ve announced they’re dialing back their advertising spend … the very same month their research unit indicates a negative impact on brand awareness and sales. Skate to where the puck will never be?
Cutting TV ad spending led to much lower sales for most of the marketers included in a new study. […] For every dollar cut from the TV budget, sales fell $3 dollars, the research found. Return on investment dropped as well. The average marketer reduced its ad budget by $3.1 million, resulting in lost sales of $8.6 million. […] In terms of other marketing goals, the companies that cut their ad spending reached fewer potential customers.
And then on the consumer side, we are going to be investing less in the Marketing of consumer.
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Well, I get the sentiment, but that seemed unnecessarily vulgar.
They've never been able to translate the "you have to pay for this monthly" thing into a proposition consumer could understand. Especially when the other option is "pay a hefty one-time fee."
That's a value prop that makes a lot of sense with their hardcore fan base but not with new users.
Does TiVo make a 33% margin on each new user? If no, then cutting $1 of advertising to save $3 of sales is actually a net win.