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The Long-Term Effect of Television Advertising Greater than Previously Thought

CBS Corporation (NYSE: CBS.A and CBS), Kellogg Company, and Nielsen Catalina Solutions (NCS) announced today the results of a ground-breaking study that challenges a long-held industry rule of thumb that has been used for over 20 years: that the long-term effect of advertising on revenue is, on average, two times the short-term effect.

At the Advertising Research Foundation’s Audience Measurement Conference today, CBS, Kellogg’s and Nielsen Catalina Solutions presented new findings on the long-term impact of advertising on revenues. The study shows that the long-term impact may well be greater than two times the short-term impact, and that it can vary substantially from brand to brand and campaign to campaign.

Through this collaboration, five brands in the Consumer Packaged Goods category, including Kellogg’s Special K, were studied to determine the specific “multiplier” for each of the brands, using true single-source methodology that integrated television exposure with actual retail sales in a single-source dataset.

For certain Kellogg’s Special K advertising, it turns out that the multiplier to get from the short-term effect to the long-term effect on sales is actually higher than the industry norm, “multiplier of 2.” The multiplier that is developed using the single source methodology is then added to the short term sales impact to get the complete value of advertising.

“We’ve always known that advertising builds long-term sales and brand equity, not just short-term sales, though we didn’t know the full extent,” said Jeff Doud, Director of Marketplace Analytics at Kellogg Company. “Kellogg got involved in this study to better understand the longer-term impact of advertising on retail sales. This type of research helps us to make well-informed decisions on marketing strategies.”

“The industry has watched marketing budgets gradually shift from paid advertising to promotions, often due to the short-term sales effect and measurability of promotions,” said David Poltrack, Chief Research Officer, CBS Corporation and President of CBS VISION. “In the past, research confirmed that television advertising provided a long-term, brand-building value that had not been captured by these short-term measures. Through new single-source data we are finally able to precisely measure the long term effects of television advertising. CBS is dedicated to helping advertisers employ these new measurement resources to ensure our client’s advertising reaches its full potential. This research is an important first step in that process.”

“Current analytic methods tend to capture short-term incrementality well, but this does not give full value to brand-building efforts. Understanding mid-to-longer-term impacts allows a more precise assessment of the true value of advertising, which leads to more intelligent investment and to stronger brand equity over time,” said Leslie Wood, Chief Research Officer, Nielsen Catalina Solutions. “When advertising’s full value is measured – short and long-term together – advertising wins.”

Future phases of the Nielsen Catalina Solutions work will include more CPG brands and additional industry verticals, as well as developing insights into long-term effects of all types of campaigns across different media and different types of advertising. Further, the Council for Research Excellence will be conducting a major industry-wide effort to build on these findings in order to help advertisers measure long-term advertising effects on an ongoing basis.

About CBS Corporation

CBS Corporation (NYSE: CBS.A and CBS) is a mass media company that creates and distributes industry-leading content across a variety of platforms to audiences around the world. The Company has businesses with origins that date back to the dawn of the broadcasting age as well as new ventures that operate on the leading edge of media. CBS owns the most-watched television network in the U.S. and one of the world’s largest libraries of entertainment content, making its brand – “the Eye” – one of the most recognized in business. The Company’s operations span virtually every field of media and entertainment, including cable, publishing, radio, local TV, film, outdoor advertising, and interactive and socially responsible media. CBS’s businesses include CBS Television Network, The CW (a joint venture between CBS Corporation and Warner Bros. Entertainment), Showtime Networks, CBS Sports Network, TVGN (a joint venture between CBS Corporation and Lionsgate), Smithsonian Networks, Simon & Schuster, CBS Television Stations, CBS Radio, CBS Outdoor, CBS Television Studios, CBS Global Distribution Group (CBS Studios International and CBS Television Distribution), CBS Interactive, CBS Consumer Products, CBS Home Entertainment, CBS Films and CBS EcoMedia. For more information, go to www.cbscorporation.com.

About Kellogg Company

At Kellogg Company (NYSE: K), we are driven to enrich and delight the world through foods and brands that matter. With 2013 sales of $14.8 billion and more than 1,600 foods, Kellogg is the world's leading cereal company; second largest producer of cookies, crackers and savory snacks; and a leading North American frozen foods company. Our brands – Kellogg's®, Keebler®, Special K®, Pringles®, Frosted Flakes®, Pop-Tarts®, Corn Flakes®, Rice Krispies®, Kashi®, Cheez-It®, Eggo®, Mini-Wheats® and more – nourish families so they can flourish and thrive. Through our Breakfasts for Better Days™ initiative, we're providing 1 billion servings of cereal and snacks – more than half of which are breakfasts – to children and families in need around the world by the end of 2016. To learn more about Kellogg, visit www.kelloggcompany.com or follow us on Twitter @KelloggCompany.

About Nielsen Catalina Solutions

Nielsen Catalina Solutions provides the most comprehensive single-source view of advertising to help consumer package goods marketers, agencies and media companies measure and improve advertising performance by precisely linking what consumers watch and what they buy.

The joint venture between Nielsen and Catalina integrates “watch” information from industry-leading Nielsen People Meter, Portable People Meter and Nielsen online, set-top-box and multi-media viewing data from Nielsen Catalina Solutions’ channel partners. The “watch” data is matched with the “buy” data from Nielsen Homescan® and nearly 70 million shopper households from Catalina. This single-source view provides the retail sales impact of TV, online, mobile, CRM, radio and print advertising. Nielsen Catalina Solutions is headquartered in Cincinnati, Ohio, USA. Visit www.ncsolutions.com/digital/ to learn more.

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