https://lnkd.in/eKPGKSDU Profit Ability 2: The New Business Case for Advertising, a significant new study on marketing effectiveness from measurement firms Gain Theory and Ebiquity, along with media agencies EssenceMediacom, Mindshare, and Wavemaker UK, was released last week. The study reveals how #advertising drives #profit over time. Key findings: The just released Profit Ability 2: The New Business Case for Advertising study reveals nearly 60% of advertising profit effect occurs between 14 weeks and 2 years. The 24%-18%-58% rule: 24% of advertising pays back in the same week. 18% of advertising profit impact occurs between week 2 and week 13. 58% of advertising return occurs between week 14 and 2 years. Advertising impact occurs over an extended period of time because very few people are in the market in the next 3 months. Overall, a dollar of advertising generates $5.19 of profit (all media over 2-year period). In the short term, 1 to 13 weeks, advertising generates $2.36 of profit. A dollar invested in #audio (AM/FM radio, podcasts, or streaming), will generate $3.12 of profit within 1 to 13 weeks. Over the entire 2-year period (1 week to 2 years), a dollar invested in audio will return a total of $6.29 of profit. Of 10 media, audio ranks 2nd in short-term return on investment (ROI) and 3rd in overall ROI, beating all digital platforms. Audio is #3 in conversion of investment to profit generated, beating all digital platforms. Audio punches above its weight. At 1% of the media budget, audio generates 1.12% of the profits generated. Audio profit payoff occurs equally in the short and long term. Profit Ability 2: The New Business Case for Advertising is a meta-analysis of econometric benchmarks to understand the short- and long-term payback of advertising to business profit. All of the analysis in the new study was post-pandemic, examining advertising business effects from 2021 to 2023. The study uses marketing mix modelling (MMM) to link advertising spend to incremental profit. Marketing mix modeling is the gold standard for understanding media effectiveness. It’s a statistical modelling approach that isolates the contribution of advertising from other factors that drive a business (pricing, distribution, seasonality, etc.). The 24%-18%-58% rule: Nearly 60% of advertising impact occurs between 14 weeks and two years Via significant media mix modeling and econometric analysis, the study found: 24% of advertising pays back in the same week. Thus, a quarter of advertising’s overall contribution to profit occurs immediately. 18% of advertising profit impact occurs between week two and week 13. 58% of advertising return occurs between week 14 and two years.
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There’s no better feeling than helping a client create a custom mix of radio & digital solutions, then seeing their campaign deliver an outstanding return on investment. #believeinthenpowerofyourbrand #trustinthestrengthofyourstrategy #stingraymediasolutions
https://lnkd.in/eKPGKSDU Profit Ability 2: The New Business Case for Advertising, a significant new study on marketing effectiveness from measurement firms Gain Theory and Ebiquity, along with media agencies EssenceMediacom, Mindshare, and Wavemaker UK, was released last week. The study reveals how #advertising drives #profit over time. Key findings: The just released Profit Ability 2: The New Business Case for Advertising study reveals nearly 60% of advertising profit effect occurs between 14 weeks and 2 years. The 24%-18%-58% rule: 24% of advertising pays back in the same week. 18% of advertising profit impact occurs between week 2 and week 13. 58% of advertising return occurs between week 14 and 2 years. Advertising impact occurs over an extended period of time because very few people are in the market in the next 3 months. Overall, a dollar of advertising generates $5.19 of profit (all media over 2-year period). In the short term, 1 to 13 weeks, advertising generates $2.36 of profit. A dollar invested in #audio (AM/FM radio, podcasts, or streaming), will generate $3.12 of profit within 1 to 13 weeks. Over the entire 2-year period (1 week to 2 years), a dollar invested in audio will return a total of $6.29 of profit. Of 10 media, audio ranks 2nd in short-term return on investment (ROI) and 3rd in overall ROI, beating all digital platforms. Audio is #3 in conversion of investment to profit generated, beating all digital platforms. Audio punches above its weight. At 1% of the media budget, audio generates 1.12% of the profits generated. Audio profit payoff occurs equally in the short and long term. Profit Ability 2: The New Business Case for Advertising is a meta-analysis of econometric benchmarks to understand the short- and long-term payback of advertising to business profit. All of the analysis in the new study was post-pandemic, examining advertising business effects from 2021 to 2023. The study uses marketing mix modelling (MMM) to link advertising spend to incremental profit. Marketing mix modeling is the gold standard for understanding media effectiveness. It’s a statistical modelling approach that isolates the contribution of advertising from other factors that drive a business (pricing, distribution, seasonality, etc.). The 24%-18%-58% rule: Nearly 60% of advertising impact occurs between 14 weeks and two years Via significant media mix modeling and econometric analysis, the study found: 24% of advertising pays back in the same week. Thus, a quarter of advertising’s overall contribution to profit occurs immediately. 18% of advertising profit impact occurs between week two and week 13. 58% of advertising return occurs between week 14 and two years.
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General Manager Sales Marketing at Starboard Communications - Cool 100.1 & 95.5 Hits FM
Brilliant study showing how effective radio is !
https://lnkd.in/eKPGKSDU Profit Ability 2: The New Business Case for Advertising, a significant new study on marketing effectiveness from measurement firms Gain Theory and Ebiquity, along with media agencies EssenceMediacom, Mindshare, and Wavemaker UK, was released last week. The study reveals how #advertising drives #profit over time. Key findings: The just released Profit Ability 2: The New Business Case for Advertising study reveals nearly 60% of advertising profit effect occurs between 14 weeks and 2 years. The 24%-18%-58% rule: 24% of advertising pays back in the same week. 18% of advertising profit impact occurs between week 2 and week 13. 58% of advertising return occurs between week 14 and 2 years. Advertising impact occurs over an extended period of time because very few people are in the market in the next 3 months. Overall, a dollar of advertising generates $5.19 of profit (all media over 2-year period). In the short term, 1 to 13 weeks, advertising generates $2.36 of profit. A dollar invested in #audio (AM/FM radio, podcasts, or streaming), will generate $3.12 of profit within 1 to 13 weeks. Over the entire 2-year period (1 week to 2 years), a dollar invested in audio will return a total of $6.29 of profit. Of 10 media, audio ranks 2nd in short-term return on investment (ROI) and 3rd in overall ROI, beating all digital platforms. Audio is #3 in conversion of investment to profit generated, beating all digital platforms. Audio punches above its weight. At 1% of the media budget, audio generates 1.12% of the profits generated. Audio profit payoff occurs equally in the short and long term. Profit Ability 2: The New Business Case for Advertising is a meta-analysis of econometric benchmarks to understand the short- and long-term payback of advertising to business profit. All of the analysis in the new study was post-pandemic, examining advertising business effects from 2021 to 2023. The study uses marketing mix modelling (MMM) to link advertising spend to incremental profit. Marketing mix modeling is the gold standard for understanding media effectiveness. It’s a statistical modelling approach that isolates the contribution of advertising from other factors that drive a business (pricing, distribution, seasonality, etc.). The 24%-18%-58% rule: Nearly 60% of advertising impact occurs between 14 weeks and two years Via significant media mix modeling and econometric analysis, the study found: 24% of advertising pays back in the same week. Thus, a quarter of advertising’s overall contribution to profit occurs immediately. 18% of advertising profit impact occurs between week two and week 13. 58% of advertising return occurs between week 14 and two years.
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Does Advertising Really Work (Part 4) In my previous 3 posts on this topic I talked about: Research that shows why #tvads and #printads give negative ROI for prominent advertisers https://lnkd.in/g942-whi Research that shows why #searchads also give negative ROI for prominent advertisers https://lnkd.in/g-DziWTV The general state of digital #displayadvertising and why they are overrated https://lnkd.in/gC5TfejW From the above posts you might draw the conclusion that #advertising doesn't really work. And if you are going to argue that advertising is done not just for ROI but also for "creating lasting brand memories" or staying on "top of mind" of consumers, I am going to suggest you to ask yourself why are these branding metrics desirable? For their own sake or for eventually generating more business? If you keep asking enough questions, every marketing activity boils down to ROI. So what is my conclusion? My hypothesis is that advertising works for some and doesn't work for some others. Who it works for and who it doesn't depends on what stage of the brand journey they are in. I think, advertising return follows a normal distribution or #bellcurve. For brands in the #growthstage it gives increasing marginal utility till they reach a point of optimization where the returns are maximized. After this point, which is applicable for most mature brands or large advertisers, advertising (whether offline or online) has diminishing marginal utility. Off course, this is only a hypothesis and I have no way of proving it. Unless, someone runs large scale experiments with companies at different stages of their #brandingjourney, nobody can say for sure if this hypothesis is always true or not. I have worked with SMEs all my career and I have personally generated good ROI (not just #ROAS) from digital advertising spends. I have also seen brands being launched through #massmedia advertising and sales skyrocketing thereafter. But the problem happens when companies see initial returns on advertising they simply assume that the returns will keep on coming if they continue scaling up their advertising. Plus there is the added fear of losing out on market share if advertising is stopped for an extended period once the brand has reached a stage of maturity. So brands end up spending more and more on advertising. And hardly anyone ever stops to run experiments or to ask if there might be a better way of maintaining or even increasing market share once the brand recognition is there. Even for the initial growth phase of a brand's journey, is advertising the only way to generate #sales and grow? Not at all. There are many brands like Dmart, Zerodha, Xiaomi, Zara, Tupperware, etc. that grew massively without any aggressive advertising. So even if you don't change your go-to-market or growth strategy and drive those with advertising, there is merit in pausing and thinking if there might be a better way.
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Award-winning B2B marketing consultant bringing clarity, growth and efficiencies | Business mentor | Fractional CMO
An interesting article in Marketing Week reporting on the latest 'Profit Ability 2' study, which brings some fascinating insights into the world of advertising proving that all forms of advertising not only drive business growth in the short term but also promise substantial returns in the long run. Commissioned by Thinkbox and analysed by a consortium, this study scrutinized £1.8bn of media investments across 10 channels. The numbers speak volumes - with an average short-term profit ROI of £1.87 for every pound spent, rising to £4.11 when considering sustained effects up to 24 months. Perhaps most intriguing is the finding that 58% of advertising's total profit impact unfolds beyond the initial 13-week period, underlining the importance of consistency and repetition in advertising campaigns (I always go on about consistency and this is why). This insight is crucial for any business aiming to harness the full potential of their advertising efforts - you must keep the momentum going. The study's findings on the profitability vary by media channel. Notably, print, despite a modest 3.3% allocation of advertising investment, emerged at the top with the highest full payback ROI of £6.36. Conversely, generic PPC achieved rapid ROI but showed rapid decline post-one week, highlighting the fleeting nature of its effects (I realise this will vary by business type). 'Profit Ability 2' not only advances our understanding of advertising impacts across different channels but also emphasizes the strategic value of long-term investment in advertising for sustained business growth. It demonstrates the business case for prioritising both immediate impact and long-term gains. What do you think of these results? Are you surprised at some of the ROI in both short term and long term? You can find a breakdown of the ROI by channel in the article from Marketing Week. https://bit.ly/4b9WM55 #MarketingInsights #AdvertisingROI #BusinessGrowth
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International Media Leader | Insights, Data and Strategy | Client Services | Stakeholder Management | Marketing Effectiveness
Not All Media Channels Are Created Equal! Marketers already know the power of advertising, but an update of the Profit Ability study by Ebiquity/GainTheory throws some fascinating data behind it. While all media channels generate a positive return, some are definite profit powerhouses! 💰 The key takeaway? TV (Linear + BVOD) reigns supreme – delivering a whopping 55% of advertising's total payback, with large effects in both the short and long term. ⏳ Hummm, the TV trade body Thinkbox is associated with the study, should we be put off?... Not in this case I believe, we’ve all seen similar conclusions time and again, thanks to the brilliant research work done by marketing effectiveness trailblazers. 💡 Interestingly, print holds its own with the highest full payback ROI (£6.36) – even with declining audiences. On the other hand, generic PPC offers quick feedback but fades over time. 🔻 The study even delves into profitability by sector – automotive takes the crown with a full ROI of £4.65 per £1 invested! Fascinating stuff! 🚗 This research is a goldmine for data-driven decisions! By understanding return and how channels perform at different stages (immediate, short-term, sustained), marketers can optimize budgets for maximum impact. ✨ The full details are due out today and I can't wait to have a closer look. Thoughts? #paidmedia #advertising #datadrivenmarketing #advertisingeffectiveness #themedialeader #ebiquity #gaintheory https://lnkd.in/ephMZQRC
Advertising generates profit, but not all media channels are equal
https://the-media-leader.com
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Increased advertising spending for 2024 is expected😄, but 𝗰𝗼𝘂𝗹𝗱 𝘁𝗵𝗶𝘀 𝗯𝗲 𝗱𝘂𝗲 𝘁𝗼 𝗻𝗲𝗴𝗮𝘁𝗶𝘃𝗲 𝗿𝗲𝗮𝘀𝗼𝗻𝘀? 😱 𝘈𝘤𝘤𝘰𝘳𝘥𝘪𝘯𝘨 𝘵𝘰 𝘚𝘵𝘢𝘵𝘪𝘴𝘵𝘢'𝘴 𝘢𝘯𝘢𝘭𝘺𝘴𝘪𝘴 𝘰𝘧 𝘵𝘩𝘦 𝘨𝘭𝘰𝘣𝘢𝘭 𝘢𝘥𝘷𝘦𝘳𝘵𝘪𝘴𝘪𝘯𝘨 𝘦𝘹𝑝𝘦𝘯𝘥𝘪𝘵𝘶𝘳𝘦 (𝘈𝘥𝘷𝘦𝘳𝘵𝘪𝘴𝘪𝘯𝘨: 𝘎𝘭𝘰𝘣𝘢𝘭 𝘚𝑝𝘦𝘯𝘥 2000-2024 | 𝘚𝘵𝘢𝘵𝘪𝘴𝘵𝘢, 2023), 𝘢𝘯 𝘪𝘯𝘤𝘳𝘦𝘢𝘴𝘦 𝘪𝘯 𝘢𝘥𝘷𝘦𝘳𝘵𝘪𝘴𝘪𝘯𝘨 𝘴𝑝𝘦𝘯𝘥𝘪𝘯𝘨 𝘪𝘴 𝑝𝘳𝘰𝘫𝘦𝘤𝘵𝘦𝘥 𝘧𝘰𝘳 2024. During and after the pandemic, significant changes were observed in the advertising market behavior. For example, in my personal experience, the cost per click (CPC) in Google search campaigns increased by up to 200% compared to pre-pandemic periods. In our case, we had to increase our spending just to maintain our goals, which led us to face the economic law of diminishing returns. This example demonstrates how 𝗮 𝗽𝗿𝗼𝗯𝗹𝗲𝗺 𝗰𝗮𝗻 𝗯𝗲𝗰𝗼𝗺𝗲 𝗮 𝗳𝗮𝗰𝘁𝗼𝗿 𝗶𝗻 𝘁𝗵𝗲 𝗶𝗻𝗰𝗿𝗲𝗮𝘀𝗲 𝗶𝗻 𝗮𝗱𝘃𝗲𝗿𝘁𝗶𝘀𝗶𝗻𝗴 𝘀𝗽𝗲𝗻𝗱𝗶𝗻𝗴. 𝗣𝗼𝘀𝘀𝗶𝗯𝗹𝗲 𝗖𝗮𝘂𝘀𝗲𝘀: - Increased product offerings (advertisers) or reduced demand (users). - Economic crises or changes in social networks. - Positive optimization of the advertising algorithm on one platform, which can lead to the disuse of another platform. - Low demand on the second platform, causing the cost per click to tend to rise. 𝗢𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝗶𝗲𝘀 - Use the most advanced advertising algorithms, as they often receive a lot of attention within platforms. - Consider platforms that are not trending, such as Pinterest, LinkedIn, email, SMS, or others. - Reduce the number of campaigns to focus on those that generate the best results in terms of customer acquisition. With these strategies, it is possible to capitalize on the increase in advertising spending and turn it into an opportunity to improve the effectiveness of campaigns and achieve better results.
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Can offline media advertising be a game-changer for your business? The answer breaks down into three key metrics: CPM - The cost to purchase 1,000 media impressions. This can vary between $3 for national radio and up to $15 for local TV or radio. Impressions to Generate a Visitor - The number of media impressions it takes to generate a site visitor can vary between 500 and 2,000 depending on how broadly applicable or niche your product or service is. Conversion Rate - This is the percentage of site visitors that become purchasers or paying customers. For general traffic this value is usually around 1%, but it can be as high as 5% for highly targeted traffic. Now the math, Cost to Acquire = CPM X (Impressions to Generate a Visitor/1000) X (1/ Conversion Rate) Using typical values, Cost to Acquire = $10 X (750/1000) X (1/.03) = $175 If you are a SaaS Company with an LTV of $1,500, the $175 acquisition cost aligns well. Offline media would be worth a test in this scenario. If you are an E-commerce Company with an LTV of $200, the $175 acquisition cost is likely not feasible. Offline media is probably not worth testing. Remember, disciplined testing is key. Run tests to validate media advertising’s cost effectiveness before a large bet.
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Can offline media advertising be a game-changer for your business? The answer breaks down into three key metrics: CPM - The cost to purchase 1,000 media impressions. This can vary between $3 for national radio and up to $15 for local TV or radio. Impressions to Generate a Visitor - The number of media impressions it takes to generate a site visitor can vary between 500 and 2,000 depending on how broadly applicable or niche your product or service is. Conversion Rate - This is the percentage of site visitors that become purchasers or paying customers. For general traffic this value is usually around 1%, but it can be as high as 5% for highly targeted traffic. Now the math, Cost to Acquire = CPM X (Impressions to Generate a Visitor/1000) X (1/ Conversion Rate) Using typical values, Cost to Acquire = $10 X (750/1000) X (1/.03) = $175 If you are a SaaS Company with an LTV of $1,500, the $175 acquisition cost aligns well. Offline media would be worth a test in this scenario. If you are an E-commerce Company with an LTV of $200, the $175 acquisition cost is likely not feasible. Offline media is probably not worth testing. Remember, disciplined testing is key. Run tests to validate media advertising’s cost effectiveness before a large bet.
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Yes, AM/FM Radio Attribution For Site Traffic And Search Can Be Measured: LeadsRx 17-Campaign Analysis Reveals A +14% Average Increase In Website Traffic Due To AM/FM Radio Advertising: Key takeaways: * On average, AM/FM radio generated a +14% lift in site traffic across the 17 campaigns measured by LeadsRx. * Day of the week: Compared to the share of Nielsen impressions, the 17 AM/FM radio campaigns’ share of attributed web sessions outperformed on weekends and Mondays. * The heavier the media weight, the greater the lift in web traffic. * A wide variety of AM/FM radio formats drive search and site traffic; Attributed site traffic from spoken word formats (Sports and News/Talk) out deliver Nielsen impressions. * Brand early and often: The highest-performing ads mentioned the brand within the first five seconds. Via the link below, the executive summary, deck, and explainer video:
Yes, AM/FM Radio Attribution For Site Traffic And Search Can Be Measured: LeadsRx 17-Campaign Analysis Reveals A +14% Average Increase In Website Traffic Due To AM/FM Radio Advertising
https://www.westwoodone.com
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How effective is digital advertising? 🤔 "Digital advertising does work. Not all of it, but most of it. Let's try to make that the narrative instead. Not just because, by repeating it, we can make it resemble the truth. But because it is the truth, backed up by science and data. " Says Anders Lithner, CEO at Brand Metrics. 💬 Check out the full blog below: 👇 https://lnkd.in/efvPDysW #blogpost #publishers #advertisers #branded #brandlift #brandmetrics #adtech #advertising #adcampaigns #technology #techexperts #advertisingtechnology #digitaladvertising #digitalmarketing #digitalads #advertisingtechnology
Brand Metrics
brandmetrics.com
