OUTSMART Why Out-of-Home is a clever investment

Transcription

1 OUTSMART Why Out-of-Home is a clever investment

2 Program Introduction Econometric Methodology Econometric Global Results Australian Case Studies Summary

3 Overview of Econometric Methodology

4 BrandScience Global Econometrics Consultancy

5 Return On Investment ROI = Incremental Sales Revenue generated for each $1 of media cost

6 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

7 How does BrandScience work? Step 1 Data Brainstorm and Collection Identification and collection of key data. Sales All data is cleaned, aggregated, harmonised and transformed into variables that can be modelled.

8 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.

9 How does BrandScience work? Step 3 Model to quantify impact of each factor Turning results from statistics into marketing insight. TV Out-of-Home Direct Mail Radio Press Can be used to determine more effective marketing spend. S a l e s Price discount impact Base level Weeks

10 10 Global overview of ROI

11 Media Categories and Inclusions TV Commercials Pay TV and Regional Programme Sponsorship PRINT 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

12 Sales ROI Global ROI across media Global TV Print Radio Online Cinema Out-of-Home Average % media mix

13 Sales ROI Out-of-Home is highly effective in Telco Telco TV Print Radio Online Cinema Out-of-Home Average % media mix

14 Sales ROI Out-of-Home is a standout performer in Media Media TV Print Radio Online Cinema Out-of-Home Average % media mix

15 Sales ROI Out-of-Home supports direct response channels for Finance Finance TV Print Radio Online Cinema Out-of-Home Average % media mix

16 Sales ROI Out-of-Home provides strong support for Leisure & Entertainment Leisure & Entertainment TV Print Radio Online Cinema Out-of-Home Average % media mix

17 Sales ROI Out-of-Home is highly effective in Retail despite under representation in budget Retail TV Print Radio Online Cinema Out-of-Home Average % media mix

18 Sales ROI Out-of-Home performs strongly for Travel Travel TV Print Radio Online Cinema Out-of-Home Average % media mix

19 FMCG Findings

20 Sales ROI Global findings show Out-of-Home is the second most efficient media TV Print Radio Online Cinema Out-of-Home Average % media mix Sample Set: All FMCG Results Vault studies ( ) with measured Out-of-Home ROI

21 Sales ROI Out-of-Home improves ROI of other media Without Out-of-Home With Out-of-Home TV Print Radio Online

22 Sales ROI Higher Proportion of budget spend on Out-of-Home increases ROI Low (Under 8%) Medium (8-15%) High (15%+) Sample Set: All FMCG Results Vault studies ( ) with measured Out-of-Home ROI

23 Sales ROI In contrast, higher TV spend reduces TV ROI Low (Under 70%) Medium (70-85%) High (85%+) Sample Set: All FMCG Results Vault studies ( ) with measured Out-of-Home ROI

24 Sales ROI Out-of-Home is effective and efficient 2nd 2nd 2nd 1st 2nd TV Print Online Out-of-Home Sample Set: All FMCG Results Vault studies ( ) with measured Out-of-Home ROI

25 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

26 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

27 Questions Appendix

28 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.

29 % Carryover With the retention rates of advertising we can estimate the half life of the campaigns. 100% 90% 80% 70% 60% 50% 40% 30% 20% HALF LIFE 4 Days 6 Days 7 Days 10 Days 10% 0% DAYS The half life explains the gradual decay of memory until the advertising impact is half that of the initial impact.

30 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 Global FMCG results With production Without costs production costs TVC 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.

31 OUTSMART Why Out-of-Home is a clever investment