PAYBACK STUDY FULL-INDUSTRY REPORT. DOES ADVERTISING GROW BUSINESS AND BRANDS? 14 th September 2017
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1 PAYBACK STUDY FULL-INDUSTRY REPORT DOES ADVERTISING GROW BUSINESS AND BRANDS? 14 th September 2017
2 THE PAYBACK STUDY 21 Brands $500m+ ad spend Industry Report FMCG* Automotive E-Commerce Finance 10 Brands 4 Brands 3 Brands 4 Brands *Includes one Quick Service Restaurant (QSR) brand
3 INDEPENDENT MEDIA & MARKETING ANALYTICS UK USA Global Australia
4 METHODOLOGY Aim to capture everything that might impact sales DATA INPUTS MODELLING REPORTS Weather Holidays TV Print OOH Brand Economy Competitors Base price Price Promotions Distribution SALES Radio Cinema Online Display Online Video Social Search Category Industry
5 DEFINITIONS AS CATEGORISED BY PARTICIPANTS TV Print OOH Radio Cinema Online Display Online Video Social Search Including TV Sponsorship Catch-up TV and Shortform (e.g. YouTube) Static and Video (e.g. Facebook, Twitter, etc.)
6 METHODOLOGY MODELLED VARIABLE SALES ROI = 3+ years of data Incremental Media Costs EXPLANATORY VARIABLES PRICE PROMO MEDIA Discount can explain some peaks Promotions can explain other increases Media can explain 3 rd sales increase
7 TOPLINE OVERVIEW
8 MEDIA INVESTMENT PAYS BACK $5.9 Total Media ROI $1.3 $1.8 $2.0 FMCG Auto E-commerce Finance
9 TV MOST EFFICIENT CHANNEL Overall efficiency: All media channels indexed to TV Efficiency Index TV Index = % 80% 60% 40% 100% 57% 52% 20% 0% 29% 22% 22% 18% TV Search Radio Print OOH Online Video Online Display
10 TV LASTS LONGER Advertising activity Average weekly retention rate (Carry-over effect) TV OOH Print Online Display Radio Search Online Video Impact on sales 8 weeks 3 weeks 3 weeks 2 weeks 2 weeks 2 weeks 2 weeks Automotive retention rates excluded as they are based on monthly data
11 BRANDS DIFFER ACROSS CATEGORIES Automotive, FMCG and Finance Consistent results within each category E-Commerce 3 different industry types no shopfront Travel & Tourism, Online Dating and a Comparison Service Search key component Advertising drives search traffic
12 MEDIA DRIVES BRAND GROWTH 24% 3% 6% 12% FMCG 73% Base Price Promotions Automotive 82% Media 11% 48% E-Commerce Finance 52% 89%
13 ROIs DIFFER BY CATEGORY, BUT ORDER IS SIMILAR FMCG TV Print Radio Online Video OOH Online Display $0.8 $0.7 $0.7 $0.6 $0.4 $1.7 Only TV delivers positive ROI Automotive TV Radio Search Cinema Social Print Online Display OOH $1.6 $1.6 $1.5 $1.4 $3.2 $3.0 $5.0 $8.9 All media channels deliver positive ROI
14 E - COMMERCE UNIQUE. FINANCE SIMILAR TO FMCG, AUTO Radio $1.9 E-Commerce Search Online Display TV $0.7 $0.6 $1.5 Radio efficient, relatively low spend Search is crucial TV $5.3 Online Video $1.1 Finance Radio OOH Online Display $1.0 $0.7 $0.4 TV most efficient Online Display low efficiency
15 FMCG: DOMINATED BY PROMOTIONS. TV IS KEY MEDIA 24% 3% FMCG 78% 82% 73% Base Price Promotions Media Media Spend Revenue Contribution TV Other Offline Media Digital (Display, Video & Social) Search
16 AUTOMOTIVE: TV DRIVING SALES 6% 12% Automotive 82% 53% 81% Base Price Promotions Media Media Spend Revenue Contribution TV Other Offline Media Digital (Display, Video & Social) Search
17 E-COMMERCE: SEARCH IS KEY 28% 48% 30% 58% E-Commerce 20% 52% 53% Base Media Search Media Spend Revenue Contribution TV Other Offline Media Digital (Display, Video & Social) Search
18 SEARCH DRIVEN BY MEDIA, PREDOMINANTLY BY TV 35% Search 28% 52% E-Commerce Media Base E-Commerce 52% 13% 20% +7% pts due to media driving search TV accounts for 90%
19 FINANCE: DIGITAL SPEND UNDERPERFORMING 11% 6% 27% Finance 89% Base Media Media Spend Revenue Contribution TV Other Offline Media Digital (Display, Video & Social) Search
20 DIGITAL BREAKDOWN: ONLINE DISPLAY FAILING 6% $1.1 94% $0.4 Digital Media Budget Online Display Online Video Online Display Online Video Finance
21 Media investment pays back - TV most efficient media channel - TV effects last the longest FMCG: TV crucial sales lever Automotive: All advertising delivers positive ROI E-Commerce: Search is crucial - Media drives paid search - TV accounts for 90% of this Finance: reconsider size of online display spend Not all advertising is equal. Measuring business outcomes is critical for all advertisers SUMMARY
22
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