Findings on the effectiveness of Outdoor advertising from Econometric studies conducted by BrandScience - Retailers (and highlights from FMCG study) 21 September 2009
Dec 15, 2015
Findings on the effectiveness of Outdoor advertising from Econometric studies conducted by BrandScience
- Retailers (and highlights from FMCG study)
21 September 2009
Background & Objectives
Highlights from the FMCG study
Results of the Retailer Meta analysis
Agenda
Overview of the BrandScience Results Vault
Summary and Conclusions
Retailer Meta Analysis: Key questions to be answered
Question answered
How effective is Outdoor advertising for Retailers?
How does the efficiency of Outdoor compare with other media?
How does the efficiency of Outdoor advertising change at different levels of spend?
How does Outdoor advertising impact on the performance of other media channels?
Is Outdoor advertising becoming more or less efficient over time?
What are the implications for budget allocation by media?
Background & Objectives
Highlights from the FMCG study
Results of the Retailer Meta analysis
Agenda
Overview of the BrandScience Results Vault
Summary and Conclusions
BrandScience Results Vault
• The BrandScience Results Vault collates data from over 400 econometric studies conducted by BrandScience to provide a unique insight into how different media drive sales independently, and in combination with other media.
• The Results Vault contains:– 71 Retail studies – 57 of the Retail studies have Outdoor advertising spend– 34 of the Retail studies have a measured Outdoor effect
• The Results Vault allows for detailed examination of media performance by channel and sector and contains lots of findings on how Outdoor advertising works:
● Absolutely● Relative to and in synergy with other media● Over time
• Partly due to poor data quality, the impact of Outdoor could not be measured in 40% of studies. The comparable figure is 4% of studies for TV and 10% for Print
Retailer ATL Media Mix: Studies in the BrandScience Results Vault are fairly representative of the UK: Outdoor makes up 9% of ATL media spend for Retailers in the Results Vault compared to the UK Norm of 6%
BrandScience Results Vault*:ALL Retail Studies
Nielsen Media ResearchTop 100 UK Retailers
*Sample Set: Retail Results Vault studies as at 15th May 2009
The average UK retailerspends £6.4m pa on ATL advertising with this media split
The average retailer in the BrandScience Results Vaultspends £5m pa on ATL advertising with this media split
Retailer TOTAL Media Mix: Studies in the BrandScience Results Vault are fairly representative of the UK: Outdoor makes up 6% of total media spend for Retailers in the Results Vault compared to the UK Norm of 5%
BrandScience Results Vault*:ALL Retail Studies
Nielsen Media ResearchTop 100 UK Retailers
*Sample Set: Retail Results Vault studies as at 15th May 2009
The average UK retailerspends £7.5m pa on advertising with this media split
The average retailer in the BrandScience Results Vaultspends £7.1m pa on advertising with this media split
What types of Retail clients are we studying?• 57 of the 71 retailers spend on outdoor• The majority of the cases are UK firms with 80%
being top 5 in their category
Background & Objectives
Highlights from the FMCG study
Results of the Retailer Meta analysis
Agenda
Overview of the BrandScience Results Vault
Summary and Conclusions
FMCG: TV is only 5% more efficient than Outdoor advertising
Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI
FMCG: If production costs are included, Outdoor becomes the most efficient medium
Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI
FMCG: Outdoor ROI increases with proportion of spend
Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI
FMCG: Increasing share of spend on Outdoor boosts the ROI on other main media
Sample Set: All Results Vault studies (2002 -2008) with measured Outdoor RROI
FMCG Results VaultCarryover rates – the medium term effect of media spend. By proportion of outdoor spend
Higher Outdoor spend drives higher carryover rates (lagged effect of advertising). 1) For Outdoor 2) for TV
Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI
FMCG Results VaultROI trends over time by medium
Our models categorised by year of evaluated campaign
Outdoor is becoming more efficient, whereas
TV is becoming less efficient
Sample Set: All FMCG Results Vault studies (2002 -2008)
Given different ROIs by medium and changes in ROI over time, FMCG advertisers should increase their share of spend on outdoor
Outdoor optimal share of spend should be 16%We can apply ROI by medium by year figures to determine optimal media split for the average FMCG brand
Recommended Media Split 2008
Radio, 3%
Cinema, 2%
Online, 3%
TV, 60%Print, 16%
Outdoor, 16%
Background & Objectives
Highlights from the FMCG study
Results of the Retailer Meta analysis
Agenda
Overview of the BrandScience Results Vault
Summary and Conclusions
Outdoor performs just as well as TV and both media are second only to Print
Incremental Sales revenue generated for each £1 of media cost
Sample Set: Retail Results Vault studies as at 15th May 2009
RROI calculations are often based on media space costs and exclude production costs which can be a sizeable percentage of total ad spend TV production costs make up for a larger share of spend than any other medium
Source: WARC
ATL Media Production Costs as a percentage of media/production total
TV 14.4%
Print 8.1%
Outdoor 7.8%
Internet 7.6%
Radio 7%
Incorporating production costs into the RROI calculation changes the ranking of the media channels
RROI calculations are based solely on media space costs and exclude production costs - which can be a sizeable percentage of total spend
Incremental Sales revenue generated for each £1 of media and productioncost
Sample Set: Retail Results Vault studies as at 15th May 2009
The Print, DM and Radio RROIs are far higher when Outdoor is used
Sample Set: Retail Results Vault studies as at 15th May 2009
+34%
+61%
+84%
Outdoor RROI increases slightly as spend increases, implying there is room for retailers to increase their share of spend on Outdoor
Sample Set: Retail Results Vault studies as at 15th May 2009
+22%
Outdoor Carryover rate increases significantly as spend increases, implying there is room for retailers to increase their share of spend on Outdoor
Sample Set: Retail Results Vault studies as at 15th May 2009
+145%
“Life”of campaign vs. Outdoor spend
Based on time taken for advertising to have 95% of its “total” effect
Sample Set: Retail Results Vault studies as at 15th May 2009
+131%
Increased spend on Outdoor boosts the RROI on TV and Print
Sample Set: Retail Results Vault studies as at 15th May 2009
+19% +28%
Higher spend on Outdoor is associated with a higher carryover rate on TV and Print
Sample Set: Retail Results Vault studies as at 15th May 2009
+18% +50%
Higher Outdoor spend elongates the life of TV and Print campaigns
Based on time taken for advertising to have 95% of its “total” effect
Sample Set: Retail Results Vault studies as at 15th May 2009
+30% +62%
Trends in RROI over time: 1) Major Media vs Outdoor
*Two year moving average
Sample Set: Retail Results Vault studies as at 15th May 2009
Trends in RROI over time: 2) Support Media vs Outdoor
*Two year moving average
Sample Set: Retail Results Vault studies as at 15th May 2009
By calculating diminishing returns curves and projecting trends in ROI over time, we suggest that overall Outdoor investment should increase, and on average should be doubled.
The Retailer category includes brands with very disparate media strategies.
Television, radio and cinema should be reduced.
Background & Objectives
Highlights from the FMCG study
Summary and Conclusions
Agenda
Overview of the BrandScience Results Vault
Results of the Retailer Meta Analysis
Summary of findings for Retailers and FMCG study
Outdoor delivers High ROI for both FMCG brands and Retailers
Above average Outdoor spend increases the medium term/brand effect of Outdoor AND TV
Outdoor ROIs are increasing over time whereas TV is decreasing
When production costs are taken into account, Outdoor outperforms TV by 3% for FMCG brands & by 8% for Retailers.