2. The ROI study
Sales return
A meta-analysis of 500+ econometric models
2011 – 2016
3. Analysis conducted by
Sally Dickerson, managing director
of effectiveness consultancy
The ROI study
Part of the Omnicom Media Group
A graduate in Mathematics from Oxford, Sally joined Mars UK as a
market research analyst, later joining their Management Science
division. She co-founded The Decision Shop, part of Bates/Cordiant
then in 1999 joined the then OMD group and set up ROI (Return on
Investment) focused on market mix modelling, which became OMD
Metrics, then BrandScience, and is now Annalect Marketing Sciences.
In 2016 Sally created a new consultancy business, Benchmarketing,
running strategic quantitative consultancy projects using meta analysis.
She has also contributed to over 30 IPA advertising effectiveness
awards, been an IPA effectiveness award judge, and run marketing
effectiveness masterclasses for the Marketing Society and Chartered
Institute of Marketing. She was a judge on the inaugural Cannes
Creative Effectiveness Lions panel, in 2011 and again in 2013.
4. 3 key questions
1
How effective are campaigns
that use print newsbrands
versus those that do not?
2
Do digital newsbrands
improve effectiveness?
And what impact do print
newsbrands have on the
effectiveness of other
media channels?
3
What proportion of the
budget should be spent
on print newsbrands to
deliver optimum total
campaign ROI?
5. The evidence
Print newsbrands boost
overall campaign ROI by
three times on average
1
Digital newsbrands
improve the
effectiveness of print
and print newsbrands
make TV twice as
effective and online
display four times
as effective
2 3
Spend on print newsbrands
should return to 2013 levels,
and can be boosted further
by use of digital newsbrands
Source: Benchmarketing analysis of 500+ econometric models
9. SMI data provides a
representative picture
of actual media mix
Actual media
spend from
booking data
provided by 65%
of UK agencies
Data across
all above the
line media
Detailed breakdown
of digital spend across
display, video and
paid search
Breakdown
of newsbrand
spend across
print and digital
Source: SMI (Standard Media Index)
11. 50
%
0%
Digital channels accounted for a third of media spend in 2015
TV Cinema OOH Radio Magazines Print
newsbrands
Online
newsbrands
Other
digital
display
Digital
video
Search
43.0%
1.4%
9.4%
3.6% 3.4%
7.6%
2.1%
11.1%
5.8%
12.6%
9.7%
31.6%
Source: Total available categories SMI 2011-2015
17. Advertising x medium and message
PR, Media mentions, Buzz
Pricing vs competitors
Store universe changes
Product/Range changes
Brand awareness/perceptions
Competitor marketing
Competitor routes to market
Technological change
Seasonality
Economic change
Econometrics – identifying and assigning a
weight to the ingredients driving sales
21. R² = 0.9556
£0.0
£0.2
£0.4
£0.6
£0.8
£1.0
£1.2
£1.4
£1.6
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
RevenueROI
Print newsbrands % of total communications spend
Defining the relationship between spend and revenue
return
Each dot on the graph
represents a case in
our Results Vault
Here the data suggests as the %
of print newsbrands in the mix
increases, so does effectiveness
This is an example chart, not real data
22. Creating tertile groups of cases shows the revenue return
for low, medium and high spend levels
£0.0
£0.2
£0.4
£0.6
£0.8
£1.0
£1.2
£1.4
£1.6
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
RevenueROI
% of total communications spend
£0.0
£0.5
£1.0
£1.5
Tertiles of % of total communications spend
This is an example chart, not real data
23. 1
How effective are campaigns
that use print newsbrands
versus those that do not?
24. £9.08
£25.18
£18.82 £18.25
Total
campaign
revenue
ROI
Low 2-20% Medium 20-31% High 31-100%
Print newsbrand % of total campaign spend in retail
No print
newsbrand
spend
2015 spend levels
16.5%Retail
Print newsbrands
boost total campaign
ROI by 2.8 times,
but the category is
failing to spend at
optimum levels
Source: Benchmarketing/BrandScience Results Vault 2011 to 2015
25. £1.49
£8.47
£6.76
£3.91
Total
campaign
revenue
ROI
Low 2-5% Medium 7-22% High 22-37%
Print newsbrand % of total campaign spend
No print
newsbrand
spend
2015 spend levels
7.9%
FinanceAutomotive
Print newsbrands
boost overall
campaign ROI by up to
5.7 times but
advertisers are
missing out on large
additional revenues by
not including
newsbrands in the mix
Finance
2015 spend levels
7.9%
Source: Benchmarketing/BrandScience Results Vault 2011 to 2015
26. Advertising carryover rates measure the time period
over which the media will drive a sales response
Determining the ‘adstock’ – or the memory effect of advertising
27. Adstock greatly influences the total return of a campaign
0
20
40
60
80
100
adstock 80% grps
0
20
40
60
80
100
adstock 30% grps
80% per week is typical of a long
term branding message
30% per week is typical of a shorter
term promotional message
28. Print newsbrands go on working for much longer
than online in the finance category
391%
higher
impact at
day 7
0 7 14 21
Online Newspapers
29. Even in the short-term retail category, print
newsbrands add 9% more impact on a weekly basis
0 7 14 21
Online Newspapers
9%
higher
impact at
day 7
30. Print newsbrands outperform online for all service categories
Automotive
Finance
Retail
Travel & transport
Combined services
Category Print newsbrands Online
69%
54%
47%
47%
48%
60%
11%
43%
39%
37%
31. 2
Do digital newsbrands
improve effectiveness?
And what impact do print
newsbrands have on the
effectiveness of other
media channels?
32. Adding digital to print improves print revenue
ROI by up to five times in retail
x5
33. Print newsbrands
make TV spend
work twice as hard
£6.49
£12.22
£5.72
£10.82
TV
revenue
ROI
Low 2-10% Medium 10-12% High 12-18%
Print newsbrand % of total campaign spend in combined services
No print
newsbrand
spend
Combined
services
Source: Benchmarketing/BrandScience Results Vault 2011 to 2015.
Combined services includes: Finance, Retail, Telecoms, Travel & Leisure, Media, Government/Social/Political, Other Services(Online & Offline)
34. Print newsbrands
boost online display
and video by up to
four times£12.46
£20.96
£17.42
£55.98
Online
display
revenue
ROI
No print
newsbrand
spend
Low 2-10% Medium 10-12%
Print newsbrand % of total campaign spend in combined services
High 12-18%
Combined
services
Source: Benchmarketing/BrandScience Results Vault 2011 to 2015.
Combined services includes: Finance, Retail, Telecoms, Travel & Leisure, Media, Government/Social/Political, Other Services(Online & Offline)
35. £4.84
£12.10
£13.33
£8.28
Online
display
revenue
ROI
Low 2-10% Medium 10-12% High 12-18%
Print newsbrand % of total campaign spend in finance
No print
newsbrand
spend
2015 spend levels
7.9%
FinanceAutomotive
Print newsbrands also
boost online RROIs by
an average of 2.3
times in finance
Finance
Source: Benchmarketing/BrandScience Results Vault 2011 to 2015
36. £4.02
£40.45
£11.34
£55.82
Radio
revenue
ROI
Low 2-7% Medium 7-22% High 22-37%
Print newsbrand % of total campaign spend in combined services
No print
newsbrand
spend
2015 spend levels
7.9%
FinanceAutomotive
Combined services:
print newsbrands
boost radio revenue
by up to 10 times
Finance
Combined
services
Source: Benchmarketing/BrandScience Results Vault 2011 to 2015.
Combined services includes: Finance, Retail, Telecoms, Travel & Leisure, Media, Government/Social/Political, Other Services(Online & Offline)
37. £1.70
£3.21
£0.45
£3.15
Radio
revenue
ROI
Low 2-7% Medium 7-22% High 22-37%
Print newsbrand % of total campaign spend in finance
No print
newsbrand
spend
2015 spend levels
7.9%
Finance
Print newsbrands
boost radio revenue
by up to 1.9 times
in finance
Finance
Source: Benchmarketing/BrandScience Results Vault 2011 to 2015
38. 3
What proportion of the
budget should be spent
on print newsbrands to
deliver optimum total
campaign ROI?
39. The data
from the meta
analysis allows us
to build response
curves for each
channel, by which
we calculate the
optimum split for
any given budget
Revenue
£m
Media investment £m
800
900
Online Display
TV
Online Search
Newspapers
VOD
Outdoor
Magazines
Radio
TV Sponsorship
Cinema
Source: BrandScience channel planning sales analysis 2015
40. 0%
13%
22%
24%
26% 26% 26%
27% 27%
26%
24%
22% 21% 21% 20%
19%
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80
Total annual campaign budget £m
Print newsbrands should form a significant proportion
of the mix for all budget levels in supermarket retail
Recommended % spend on print newsbrands to optimise total campaign ROI
Source: BrandScience channel planning sales analysis 2015
46. The evidence
Print newsbrands boost
overall campaign ROI by
three times on average
1
Print newsbrands make
TV twice as effective
and online display four
times as effective
2 3
Spend on print newsbrands
should return to 2013 levels,
and can be boosted further
by use of digital newsbrands
This study represents an unprecedented insight into how advertising works for newsbrands. It is a bespoke analysis of Omnicom’s econometrics data vault
•500 statistical models, identifying immediate and longer term impact on revenue and Return on investment
•Models across multiple categories covering the last five years, and combined with industry spend sources – Standard Media Index and Nielsen
• We focus on the impact of newsbrands in a multimedia and increasingly digital media mix, in terms of incremental sales and Revenue Return On Investment
For this particular study Newsworks wanted the answers to 3 key questions:
1. How effective are campaigns that use print newsbrands versus those that do not?
2. Do digital newsbrands improve effectiveness? What impact do print newsbrands have on the effectiveness of other media?
3. What proportion of the budget should be spent on print newsbrands to deliver optimum total campaign ROI?
Print newsbrands have a respectable direct ROI vs other offline channels, but there is evidence across all categories that including print newsbrands in the mix improves the overall campaign ROI – by an average of THREE times
Not only that, but print newsbrands boost the ROI of other channels – they make TV twice as effective, online display four times as effective and radio between four and ten times more effective.
It is no surprise that newsbrand advertising has been in sharp decline. Our analysis shows that the exodus has been overdone, the optimal mix % for print newsbrands is closer to 2013 levels than current 2015/2016 levels – the pendulum has swung too far
Our evidence comes from hundreds of econometric modelling projects run by BrandScience, between 2011 and 2015
•Spans six different categories
Combined services (retail, finance, travel, entertainment, government and telecoms)
Retail
Finance
Travel/Transport
Automotive
FMCG
We look at all channels as part of our modelling. One point to note though is that digital newsbrands are included in online display in the econometric models. No-one has yet modelled digital newsbrands as a separate channel. However we know that they complement print incredibly well, and boost print ROI when included.
So our analysis focuses on print newsbrands and their role in the total campaign mix.
Our evidence comes from hundreds of econometric modelling projects run by BrandScience, between 2011 and 2016
•Spans six different categories
Combined services (retail, finance, travel, entertainment, government and telecoms)
Retail
Finance
Travel/Transport
Automotive
FMCG
We look at all channels as part of our modelling. One point to note though is that digital newsbrands are included in online display in the econometric models. No-one has yet modelled digital newsbrands as a separate channel. However we know that they complement print incredibly well, and boost print ROI when included.
So our analysis focuses on print newsbrands and their role in the total campaign mix.
Let’s look first at the advertising spend context. The challenge has been to establish the true picture of spend across channels, especially in digital.
So for this analysis we have used a source called Standard Media Index, which provides a much more accurate and representative picture of the actual media mix.
It is based on actual media spend from booking data covering 65% of UK media agency billings. The data covers all above the line media. Importantly it provides a detailed breakdown of digital spend across display, video and paid search. So for newsbrands it covers spend both in print and in digital.
Combining print and digital newsbrands, the picture is one of decline. Although investment in digital newsbrands is growing, it is not yet compensating for the exodus from print.
Source: Total available categories SMI 2011-2015Newsbrands = Newspapers (inc newspaper magazines), Digital newsbrands
Looking at SMI for the calendar year 2015, we can see that TV is still the biggest single channel, , digital combined comes in at a third of total spend and newsbrands account for just under 10% of the market.
% spend over the year – All categories
Source: Total available categories SMI 2011-2015Newsbrands = Newspaper Magazines, Newspaper, Digital PrintDigital = Digital Video, Digital Display, Digital Programmatic, Search
Investment in print newsbrands has declined from 13.7% in 2011 to 7.6% in 2015.
Source: Total available categories SMI 2011-2015Print newsbrands = Newspapers (inc newspaper magazines)
Looking at individual categories,
In retail print newsbrands remain the number #2 channel despite the decline
Source: SMI retail category 2011-2015Print newsbrands = Newspapers (inc newspaper magazines)
Looking at individual categories,
In finance spend in print newsbrands has declined less sharply
Source: SMI finance category 2011-2015Print newsbrands = Newspapers (inc newspaper magazines)
Combining print and digital newsbrands, the picture is one of decline. Although investment in digital newsbrands is growing, it is not yet compensating for the exodus from print.
Source: Total available categories SMI 2011-2015Newsbrands = Newspapers (inc newspaper magazines), Digital newsbrands
So that sets out the advertising spend context.
We’ll now turn to the performance of print newsbrands in driving return on investment. Before we do so, a few words on the methodology, and how we got there.
If sales are a cake, econometrics determines the recipe
To understand return on investment of media, we need to be able to identifying and quantifying ALL key drivers of sales and revenue.
The ingredients will usually include:
The Advertising x Medium and Message
PR, Media mentions, Buzz
Pricing vs competitors
Store universe changes
Product/Range changes
Brand awareness/ perceptions
Competitor marketing
Competitor routes to market
Technological change
Seasonality
Economic change
The technique assigns a weight to each ingredient
Once the ‘recipe’ is known, we can reproduce the cake by combining the weighted ingredients
We isolate and quantify drivers of sales. This chart is a very simplified illustration of that, showing the sales pattern over time broken down by the different drivers, in this case a combination so enabling calculation of Revenue return on media investment
So excluding all other factors we can isolate the contribution of each channel to sales, take away the investment on that channel, and you get the RROI – as per this example table
Meta analysis is analysis of analysis results – the “meta data”
It’s common in pharmaceuticals, clinical drugs trials
One trial isn’t enough, you need hundreds so as to be sure of your results
If all the trials come up with the same answer, that’s a very strong result
If the trial results are different, then being able to explain robustly why they are different – different dosage, different demographic sample - is again a result and new learning
Using our cake analogy – we can work out whether better tasting cakes always use butter rather than margarine in the recipe, and whether using three eggs works better than two
Scatter graphs allow us to see relationships in data.
Here in this example chart, used for illustration, we can see the relationship between media spend and revenue return. Specifically looking at print newsbrands
Percentage of total comms spend and the revenue ROI.
Each dot on the graph represents an econometric model case in our Results Vault.
Here the data suggests as the % of print newsbrands in the mix increases, so does effectiveness
In order to see the relationship more clearly, we create tertile groups of case, according to their print newsbrand spend as a % of the overa;ll media mix. This creates robust groups, on which we can report the average Y axis score for each group - ie the average Revenue ROI
So on to our first question…
How effective are campaigns that use print newsbrands versus those that do not? Is it better to have print in the mix?
In each of the following charts we will look at grouping of low, medium and high spenders on print newsbrands, as well as an additional group, those spending no money in print newsbrands, and then the total campaign revenue ROI per £1 spend for each of those groups
In Retail: Print Newsbrands boost total campaign ROI by 2.8 times, with the optimum return when they are 20% to 31% of the mix. In all cases it is always better to have print newsbrands in the mix.
Source: Brand Science Results Vaults 2011 to 2015 – excludes outliers and incomplete models
Financial Services campaigns boost overall campaign ROI by up to 5.7 times when print newsbrand spend is between 7% and 22%
Financial services – total comms revenue ROI vs. print newsbrand % of spend
Source: Results Vaults 2011 to 2015 – excludes outliers and incomplete models
Advertising carryover rates measure the time period over which the media will drive a sales response.
50% carryover rate a week means that if there were 100 impacts in the week of the advert, then there would be an effect of 50 in the second week & 25 in the third
Carryover is identified by best fit/statistical confidence within the modelling process
It greatly influences the total return of a campaign
So we know then from our results that it is always best to have print newsbrands in the mix, and we know the average levels to deliver optimum return.
This is not about comparing individual channels but rather acknowledging that most if not all campaigns are multimedia and that we need to know the role of print newsbrands in the mix.
Our second question relates to how print newsbrands boost the effectiveness of other channels within the mix.
Using the same format, comparing groups by level of spend in print newsbrands we looked at the impact on the average TV revenue ROI. For this analysis we looked at the wider combined services category to get a bigger sample of models.
The results showed that including print newsbrands in the mix make TV spend work twice as hard, doubling the average revenue per £1 spent on TV.
Using the same format, comparing groups by level of spend in print newsbrands we looked at the impact on the average online display revenue ROI. For this analysis we looked at the wider combined services category to get a bigger sample of models.
The results showed that including print newsbrands in the mix makes online display spend work up to four times as hard,
Source: Results Vaults 2011 to 2015 – excludes outliers and incomplete models
And even in the finance category print newsbrands boost online display ROIs by an average of 2.3 times
Finance – online total revenue ROI vs. print newsbrand % of spend
Source: Results Vaults 2011 to 2015 – excludes outliers and incomplete models
And the same is true for radio, where the inclusion of print newsbrands in the mix, boosts radio revenue ROI by up to 10 times in combined services.
Combined services – radio total revenue ROI vs. print newsbrands % of spend
Source: Results Vaults 2011 to 2015 – excludes outliers and incomplete models
In finance there is also a positive story the effect of print newsbrands on radio revenue, where they boost the radio revenue ROI by almost two times
Finance – radio total revenue ROI vs. print newsbrand % of total campaign spend
Source: Results Vaults 2011 to 2015 – excludes outliers and incomplete models
Source: Results Vaults 2011 to 2015 – excludes outliers and incomplete models
So what we’ve shown so far is how vital print newsbrands are to both overall campaign revenue ROI, boosting it on average by three times, and also to the effectiveness of other channels, making TV spend up to two times more effective, online display up to four times and radio as much as ten times.
The final question then, using all this data, is how much should you spend on newsbrands. We know the ranges that deliver the optimum spend across the categories, but what is the sweet spot and how does that differ by budget level?
Our Results Vault across the last 10 years feeds a channel planning for sales system
We analysed ROIs across data points in each category and generated average response curves
Curves that “go flat” suggest high diminishing returns and no benefits to spending, unless that curve is flat and above all others
We can take an annual budget and optimise the overall ROI for the spend, by changing the mix
It’s a simple hill-climbing optimisation that picks the highest and the slopi-est points by medium.
We then use this to calculate the optimum channel split for any given budget.
In retail, we have looked at supermarkets. Here the average spend is around £40m and larger spenders are at around £80m.
The range from our tertile analysis was 20-31%. Here we can see that the sweet spot for the average spender is at 27%.
In retail we also looked at non-grocery retail. Here the average spend is around £8m.
In finance the average spend is around £25m and larger spenders are at around £50m.
The range from our tertile analysis was 7-22%. Here we can see that the sweet spot for the average spender is at 21%. Average spend in 2015 was much lower at 7.7%.
Print newsbrands have a respectable direct ROI vs other offline channels, but there is evidence across all categories that including print newsbrands in the mix improves the overall campaign ROI – by an average of THREE times
Not only that, but print newsbrands boost the ROI of other channels – they make TV twice as effective, online display four times as effective and radio between four and ten times more effective.
It is no surprise that newsbrand advertising has been in sharp decline. Our analysis shows that the exodus has been overdone, the optimal mix % for print newsbrands is closer to 2013 levels than current 2015/2016 levels – the pendulum has swung too far