Post on 11-May-2015
Findings on the effectiveness of Outdooradvertising from Econometric studiesconducted by BrandScience
- Retailers (and highlights from FMCG study)21 September 2009
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Background & Objectives
Highlights from the FMCG study
Results of the Retailer Meta analysis
Agenda
Overview of the BrandScience Results Vault
Summary and Conclusions
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Retailer Meta Analysis: Key questions to be answeredQuestionanswered
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 levelsof spend? ����
How does Outdoor advertising impact on the performance of other mediachannels? ����
Is Outdoor advertising becoming more or less efficient over time? ����
What are the implications for budget allocation by media? ����
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Background & Objectives
Highlights from the FMCG study
Results of the Retailer Meta analysis
Agenda
Overview of the BrandScience Results Vault
Summary and Conclusions
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BrandScience Results Vault
• The BrandScience Results Vault collates data from over 400econometric studies conducted by BrandScience to provide a uniqueinsight into how different media drive sales independently, and incombination 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 performanceby channel and sector and contains lots of findings on how Outdooradvertising works:
● Absolutely● Relative to and in synergy with other media● Over time
• Partly due to poor data quality, the impact of Outdoor could not bemeasured in 40% of studies. The comparable figure is 4% of studies forTV and 10% for Print
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Retailer ATL Media Mix:Studies in the BrandScience Results Vault are fairly representative of theUK: Outdoor makes up 9% of ATL media spend for Retailers in the ResultsVault 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 ATLadvertising with this media split
The average retailer in theBrandScience Results Vaultspends £5m pa on ATLadvertising with this media split
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Retailer TOTAL Media Mix:Studies in the BrandScience Results Vault are fairly representative of theUK: Outdoor makes up 6% of total media spend for Retailers in the ResultsVault 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 advertisingwith this media split
The average retailer in theBrandScience Results Vaultspends £7.1m pa on advertisingwith this media split
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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
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Background & Objectives
Highlights from the FMCG study
Results of the Retailer Meta analysis
Agenda
Overview of the BrandScience Results Vault
Summary and Conclusions
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Recap: How effective is Outdooradvertising for FMCG brands?
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FMCG: TV is only 5% more efficient than Outdoor advertising
Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI
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FMCG: If production costs are included, Outdoor becomes the mostefficient medium
Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI
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FMCG Results VaultHow does ROI vary accordingto proportion of outdoor spend?
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FMCG: Outdoor ROI increases with proportion of spend
Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI
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FMCG: Increasing share of spend on Outdoor boosts the ROI onother main media
Sample Set: All Results Vault studies (2002 -2008) with measured Outdoor RROI
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FMCG Results VaultCarryover rates – the mediumterm effect of media spend.By proportion of outdoor spend
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Higher Outdoor spend drives higher carryover rates (lagged effectof advertising). 1) For Outdoor 2) for TV
Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI
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FMCG Results VaultROI trends over time by medium
Our models categorised by yearof evaluated campaign
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Outdoor is becoming more efficient, whereas TV is becoming lessefficient
Sample Set: All FMCG Results Vault studies (2002 -2008)
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Given different ROIs bymedium and changes inROI over time, FMCGadvertisers should increasetheir share of spend onoutdoor
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Outdoor optimal share of spend should be 16%We can apply ROI by medium by year figures to determine optimal mediasplit for the average FMCG brand
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Background & Objectives
Highlights from the FMCG study
Results of the Retailer Meta analysis
Agenda
Overview of the BrandScience Results Vault
Summary and Conclusions
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How effective is Outdooradvertising for Retailers?
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Outdoor performs just as well as TV and both media are second only toPrint
IncrementalSales revenuegenerated foreach £1 ofmedia cost
Sample Set: Retail Results Vault studies as at 15th May 2009
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RROI calculations are often based on media space costs andexclude production costs which can be a sizeable percentage oftotal ad spendTV production costs make up for a larger share of spend than any othermedium
Source: WARC
ATL Media Production Costs as apercentage ofmedia/production total
TV 14.4%Print 8.1%Outdoor 7.8%Internet 7.6%Radio 7%
Incorporating production costs into the RROI calculation changes theranking of the media channels
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RROI calculations are based solely on media space costs andexclude production costs - which can be a sizeable percentageof total spend
IncrementalSales revenuegenerated foreach £1 ofmedia andproductioncost
Sample Set: Retail Results Vault studies as at 15th May 2009
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The Print, DM and Radio RROIs are far higher when Outdoor isused
Sample Set: Retail Results Vault studies as at 15th May 2009
+34%
+61%
+84%
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How does the efficiency ofOutdoor advertising change at
different levels of spend?
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Outdoor RROI increases slightly as spend increases, implyingthere is room for retailers to increase their share of spend onOutdoor
Sample Set: Retail Results Vault studies as at 15th May 2009
+22%
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Outdoor Carryover rate increases significantly as spendincreases, implying there is room for retailers to increase theirshare of spend on Outdoor
Sample Set: Retail Results Vault studies as at 15th May 2009
+145%
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“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%
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How does Outdoor advertisingimpact on the efficiency of other
media channels?
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Increased spend on Outdoor boosts the RROI on TV and Print
Sample Set: Retail Results Vault studies as at 15th May 2009
+19% +28%
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Higher spend on Outdoor is associated with a higher carryoverrate on TV and Print
Sample Set: Retail Results Vault studies as at 15th May 2009
+18% +50%
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Higher Outdoor spend elongates the life of TV and Printcampaigns
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%
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Is Outdoor advertisingbecoming more or less efficient
over time?
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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
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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
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What are the implications forbudget allocation by media?
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By calculating diminishing returns curves and projecting trendsin ROI over time, we suggest that overall Outdoor investmentshould increase, and on average should be doubled.
The Retailer category includes brands with very disparate mediastrategies.
Television, radio and cinema should be reduced.
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Background & Objectives
Highlights from the FMCG study
Summary and Conclusions
Agenda
Overview of the BrandScience Results Vault
Results of the Retailer Meta Analysis
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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/brandeffect of Outdoor AND TV
Outdoor ROIs are increasing over time whereas TV is decreasing
When production costs are taken into account, Outdooroutperforms TV by 3% for FMCG brands & by 8% for Retailers.
Findings on the effectiveness of Outdooradvertising from Econometric studiesconducted by BrandScience
Retailers and highlights from FMCG study
21 September 2009