OUTSMART Why Out-of-Home is a clever investment
OUTSMART Why Out-of-Home is
a clever investment
Introduction
Program
Econometric Methodology
Econometric Global Results
Australian Case Studies
Summary
Overview of Econometric Methodology
BrandScience – Global Econometrics
Consultancy
Return On Investment
ROI = Incremental Sales Revenue
generated for each $1 of media cost
BrandScience Results Vault
The BrandScience Results Vault is a collation of data from
over 600 econometric studies. With this, we can provide a
unique quantitative insight via meta-analysis into how
different media drive sales independently and in combination
with other media.
We are able to use these to provide learnings on how Out-of-
Home advertising works;
● relative to other media
● independently and in synergy with other media
● trends in effectiveness over time
Sales
How does BrandScience work?
Step 1 – Data Brainstorm and Collection
Identification and
collection of key data.
All data is cleaned,
aggregated,
harmonised and
transformed into
variables that can be
modelled.
How does BrandScience work?
Step 2 – Multivariate Regression Analysis
Determines which factors are
statistically significant and the
magnitude of each factor’s impact
on sales.
How does BrandScience work?
Step 3 – Model to quantify impact of each factor
• Turning results
from statistics
into marketing
insight.
• Can be used to
determine more
effective
marketing
spend.
Base level Base level
Price discount impact
TV Press
Out-of-Home
Radio Direct
S
a
l
e
s
Weeks
10
Global overview of ROI
Media Categories and Inclusions
TV • Commercials
• Pay TV and Regional
• Programme Sponsorship
Magazines and
Newspapers
• Advertising
• Advertorials
• Inserts
RADIO • Commercials
• Promotional / Sponsorship Campaigns
ONLINE • Websites /
Content
• Banner Ads
• Sponsorship
• Competitions
CINEMA • Commercials
OUT-OF-HOME
• Billboards
• Street Furniture
• Transit
• Retail
• Airport
Global ROI across media
TV Print Radio Online Cinema Out-of-Home
Sale
s R
OI
Average % media mix
Global
Out-of-Home is highly effective in Telco
TV Print Radio Online Cinema Out-of-Home
Sale
s R
OI
Telco
Average % media mix
Out-of-Home is a standout performer in Media
TV Print Radio Online Cinema Out-of-Home
Sale
s R
OI
Media
Average % media mix
Out-of-Home supports direct response
channels for Finance
TV Print Radio Online Cinema Out-of-Home
Sale
s R
OI
Finance
Average % media mix
Out-of-Home provides strong support for
Leisure & Entertainment
TV Print Radio Online Cinema Out-of-Home
Sale
s R
OI
Leisure & Entertainment
Average % media mix
Out-of-Home is highly effective in Retail
despite under representation in budget
TV Print Radio Online Cinema Out-of-Home
Sale
s R
OI
Retail
Average % media mix
Out-of-Home performs strongly for Travel
TV Print Radio Online Cinema Out-of-Home
Sale
s R
OI
Travel
Average % media mix
FMCG Findings
Global findings show Out-of-Home is
the second most efficient media
TV Print Radio Online Cinema Out-of-Home
Sale
s R
OI
Sample Set: All FMCG Results Vault studies (2002-2009) with measured Out-of-Home ROI
Average % media mix
Out-of-Home improves ROI of other media
TV Print Radio Online
Sale
s R
OI
Without Out-of-Home With Out-of-Home
Higher Proportion of budget spend on
Out-of-Home increases ROI
Sample Set: All FMCG Results Vault studies (2002-2009) with measured Out-of-Home ROI
Low(Under 8%)
Medium(8-15%)
High(15%+)
Sale
s R
OI
In contrast, higher TV spend reduces
TV ROI
Sample Set: All FMCG Results Vault studies (2002-2009) with measured Out-of-Home ROI
Low(Under 70%)
Medium(70-85%)
High(85%+)
Sa
les
RO
I
Out-of-Home is effective and efficient
Sample Set: All FMCG Results Vault studies (2002-2009) with measured Out-of-Home ROI
2005 2006 2007 2008 2009
Sale
s R
OI
TV Print Online Out-of-Home
2nd 2nd 2nd 1st 2nd
Out-of-Home delivers powerful results
• Out-of-Home delivers a high ROI across all categories
• It is an effective and efficient media channel in its own
right
• Multiplies and expands the ROI of other media channels
• The more you spend in Out-of-Home the more it returns
versus TV where the more you spend the lower the
return
Memorable Campaigns
Out-of-Home is the second most
memorable media
• For each week after an Out-of-Home campaign 55 percent is retained on average
Sample Set: All FMCG Results Vault studies (2002-2009) with measured Out-of-Home ROI
70%
49%
35%
53% 53% 55%
TV Print Radio Online Cinema Out-of-Home
Out-of-Home extends the half life
of your campaign
6
8
13
17
0
2
4
6
8
10
12
14
16
18
20
Without Out-of-Home With Out-of-Home
Me
ssag
e h
alf
life
(D
ays)
Online TVC
30% longer
Sample Set: All FMCG Results Vault studies (2002-2009) with measured Out-of-Home ROI
• Using Out-of-Home in combination with other media
arrests the decay rates of a campaign
• This works particularly well for TV and online
campaigns where we see a 30% increase in the half life
Out-of-Home delivers memorable
campaigns
Out-of-Home
part of our everyday lives
weekdays and weekends
as we travel as we socialise
as we run errands as we work
as we shop
day and night
31
32
Combining econometric modelling with MOVE
– what do we see?
New Product Development
Australian Case Studies
Australian Case Study:
New Product Development
Background:
• An established brand
• New range launch in an expanding market
• Creative goal to distinguish the brand from others
Campaign:
• Multi-media approach – TV, Out-of-Home and online
• Three week top heavy TVC followed one week later by
two week Out-of-Home and online element
0
200
400
600
800
1000
1200
TV Out-of-Home
Australian Case Study:
New Product Development
Campaign Delivery:
0
10
20
30
40
50
60
70
80
TV Out-of-Home
Budget ($000s) Audience Reach (%)
Source: Oztam and MOVE
Australian Case Study:
New Product Development
Econometric results:
• Out-of Home delivered much greater reach efficiency
than TV
• Out-of-Home delivered ROI two times greater than TV
• Synergies between the TVC, Out-of-Home and online
campaigns increased the overall campaign ROI
• The multi-media platform established for this launch
resulted in the brand going on to perform as a leader in
its market
Spend Diversification
Australian Case Studies
Australian Case Study:
Spend Diversification
Background:
• Historically brand had used 100% TV to drive sales
• Found diminishing returns when TV expenditure goes
above $2m
Australian Case Study:
Spend Diversification
Actual
Response
Australian Case Study:
Spend Diversification
Campaign:
• Shifted 20% of spend to Out-of-Home and radio in the
second year
Year 1 100% TV
Year 2 80% TV
20% Out-of-Home + radio
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
Year 1 (100% TV) Year 2 (80% TV)
Sale
s R
OI
Australian Case Study:
Spend Diversification
Campaign Delivery:
+11%
$2.40 $2.67
Australian Case Study:
Spend Diversification
Econometric results:
• Spend diversification generated additional sales
• Moving 20% of funds out of TV into Out-of-Home and
radio produced a large increase in the overall Sales ROI
Out-of-Home Synergy
Australian Case Studies
Australian Case Study:
Out-of-Home Synergy
Background:
• Launch of new line extension
• Significant spend allocated to drive high awareness
Campaign:
• Multi-media campaign with strong synergies
• Out-of-Home used from start along with TV and online
Australian Case Study:
Out-of-Home Synergy
Campaign Delivery:
0
200
400
600
800
1000
1200
1400
1600
1800
2000
TV Out-of-Home
0
10
20
30
40
50
60
70
80
90
TV Out-of-Home
Budget ($000s) Audience Reach (%)
Source: Oztam and MOVE
Australian Case Study:
Out-of-Home Synergy
Campaign Delivery:
TV Print Radio Online Cinema Out-of-Home
Sale
s R
OI
Average % media mix
Australian Case Study:
Out-of-Home Synergy
Econometric results:
• Out-of-Home provided very good support to the TVC
during the launch
• Out-of-Home worked in 3 key ways to provide strong
payback for the client;
1. Strong direct ROI
2. Increased the memory of the TVC
3. This Out-of-Home/TV synergy accounted for 10% of
the TVC ROI
48
UV Tripleguard’s case
for avoiding the sea of sameness
49
Recency Research –
The Last Window of Influence
79%76%
53% 51%48%
43%40%
4% 3%8%
4% 2%
% Recall % Recall 30 mins
Source: Helen Harrison Associates, July 2011, 604 intercept shopper interviews, 4 UK
locations
Any Ad Recall vs 30 mins Ad Recall by
Media ‘The Last Window of Influence’ All Shoppers
88%
10% 6%
18%8% 5%
Outdoor TV Newspaper Radio Internet Magazines
Base: All aware any advertising any media last 30 mins (274)
30 mins Ad Recall by Media
‘The Last Window of Influence’
INDEX vs. All Shoppers
Mobile phone / telecom stores 112
Banks / building society 111
Fast Food outlet 111
News agent / convenience store 110
Fashion/clothes shops 98
Supermarket 97
Chemist 91
Travel Agents 85
Base: Outdoor Ad Aware 30 mins (240)
The Outdoor Ad Aware 30 minutes
Shopper - Likelihood to Visit Retailers
Retail Visitors – Outdoor in last window of
Influence has potential to be highly effective % More likely to find out more
about a brand having seen
Outdoor in past 30 mins
% More likely to buy
having seen Outdoor in
past 30 mins
Chemist 81% 56%
Newsagent / convenience store 75% 55%
Mobile phone / telecom stores 74% 71%
Fashion/clothes shops 69% 62%
Fast Food outlet 69% 51%
Supermarket 68% 60%
Banks / building society 67% 65%
All Shoppers
(604)
16-44
(366)
Men
(294)
Women
(310)
I usually plan in advance everything I want to buy and only buy things on my list
13% 9% 17% 8%
I sometimes make unplanned purchases but mostly stick to my shopping list
29% 26% 28% 30%
I often buy something that's not on my shopping list
18% 21% 16% 20%
I usually don’t make a shopping list or plan, and just buy spontaneously
39% 43% 37% 41%
Attitudes to Shopping: only 13% not
susceptible to last window of influence
• Outdoor is the key medium to reach shoppers in the 30
mins prior to purchase. 40% of shoppers see outdoor in
the last window of influence. Next highest is radio with
8%
• Outdoor dominates ad exposure in last 30 minutes,
reaching 88% of those exposed to any ad
• Only 13% of adults not susceptible to last minute
influence, and only 8% of women and 9% of 16-44’s
• Awareness of outdoor advertising during this pre
purchase period increases the likelihood to find out
more about a product and to buy a product
Summary – Outdoor Key Points
Summary
"I know that half of our advertising is
wasted. The trouble is that I don't know
which half.”
Lord Leverhulme
Key take outs
1. Out-of-Home delivers ROI and
memory as a stand-alone medium and a media multiplier
2. The higher the budget spend on
Out-of-Home the larger the return on investment
Questions
Questions
Questions
Appendix
Measuring media impact with
diminishing return ● To take into account the longer memory of advertising campaign, media variables are adstocked.
● i.e. TARPs with the following pattern
● are included in the model as continuous series similar to the one below
● The exact shape of selected time series depends on the retention rate. To calculate this we test models
with a variety of retention rates to see which best fits the memory of a given campaign. This gives up the
longevity of all advertising campaigns.
The half life explains the gradual decay of memory until the advertising
impact is half that of the initial impact.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
% C
arr
yo
ve
r
0.3
0.4
0.5
0.6
With the retention rates of advertising we can estimate the half life
of the campaigns.
HALF LIFE
4 Days
6 Days
7 Days
10 Days
DAYS
Production costs are included in outdoor
ROI calculation but not other channels.
• An approximate average outdoor production cost is 10 percent.
• This tends to be included into the calculation of the ROI.
• However for other media channels such as TVC the production cost is excluded from the calculation. As a
rough guide these are generally between 5 to 10 percent of total costs.
• By estimating ROI with and without these costs at a global scale the ROI’s for outdoor and TVC change
accordingly: With production
costs Without
production costs
Outdoor 1.41 1.55
With production costs
Without production costs
TVC 1.19 - 1.26 1.32
• By accounting for production costs in both TVC and outdoor in the global results we see outdoor becomes
10 to 15 percent more efficient than TVC; increased from the earlier calculation of 6 percent.
Extra costs often excluded in ROI calculation include licensing fees, insurance fees,
creative and production costs.
Global FMCG
results
OUTSMART Why Out-of-Home is
a clever investment