NEW YORK--(BUSINESS WIRE)--Nielsen Catalina Solutions (NCS), the leader in helping CPG marketers optimize return on advertising spend (ROAS) with in-store purchase data, today presented the study, “Yes, Advertising Works. Now, What’s My ROAS Across Media Platforms?” at The Advertising Research Foundation's Audience Measurement 2016 conference. The study generated benchmarks that allow marketers to compare the return they should expect from every dollar of their cross-media, digital video, display, linear TV and magazine advertising spending. In its analysis, NCS worked with The Advertising Research Foundation, CBS Corporation, Meredith Corporation, Sequent Partners and a prominent technology and display advertising company.
To understand the average return on advertising spend (ROAS) and sales productivity metrics across media type, NCS, over the course of eleven years (from 2004-2015), analyzed nearly 1,400 campaigns across 450 brands from seven popular categories: baby, pet, health and beauty, general merchandise, food, beverage and over-the-counter (OTC). The NCS dataset integrates 90 million households of in-store purchase data, a subset of Catalina’s data warehouse, with each of the media platforms in a single source to determine the incremental sales impact of advertising.
"The insights we've uncovered by comparing ROAS and incremental sales across media types are invaluable,” said Leslie Wood, Chief Research Officer, Nielsen Catalina Solutions. “While there is no 'best' media, and choices should be driven by strategy and message, advertisers can leverage this data to inform their media decisions."
Data was analyzed many different ways to determine not only the key metrics, but what factors drive sales, such as the size of the brand, brand equity, purchase frequency, etc. As discovered in the study, most brands can be grouped into three categories: Marquee (bigger brands, shorter purchase cycle), Mid-sized, and Infrequent Use (longer purchase cycle and fixed-level of purchasing across time), which will greatly impact their expected return. These benchmarks will help CPG brands understand how their metrics stack up to CPG industry norms and benchmarks.
Select Benchmarks
- Magazines show the highest Return on Advertising Spend (ROAS), with an average return of $3.94 for every dollar spent on advertising. Display follows at $2.63. Unlike the other benchmarks presented, ROAS is impacted by the cost of the media.
- Linear TV advertising drives the highest incremental sales per exposed household at $.33. This is followed by magazine, digital video and mobile, which are separated by only three cents.
- Mobile drives the highest incremental sales per thousand impressions, at $26.52. Digital video follows at $23.48 and linear TV at $20.56.
- Category matters. Expensive, frequently purchased items - like baby and pet products - have a higher ROAS than items from less expensive categories like food and beverage.
- The Marquee Brand Cluster (bigger brands, shorter purchase cycle) has a higher overall ROAS and incremental sales per exposed household, and confirms that size of brand and frequency of purchase is a more discriminating factor than the product category.
- Creative type also plays a part in ROAS; promotional campaigns garner the highest return and campaigns featuring a recipe garner the lowest.
Industry Project Team
Jasper Snyder, EVP, Research & Innovation: Cross-Platform, The Advertising Research Foundation, "Earlier this year at our Re:Think conference, The ARF released a study that shows advertisers can increase their ROI by spreading their budgets across media platforms. Now they can understand what returns they should expect from each media type and how their results compare to industry standards."
David Poltrack, Chief Research Officer, CBS Corporation, "With our Campaign Performance Audit (CPA), we strive to help our advertising clients deliver campaigns that give them the optimal return on their advertising investment. New data - like these benchmarks -is a step towards creating the most effective campaigns possible. While the report focuses on averages, the real story is in the range of ROAS and the dynamics of advertising return as campaigns increase in scale. There is a big difference between the 'average' and the 'best' return and these new analytical tools will help advertisers beat the 'average' and approach the 'best' outcome.”
Britta Cleveland, SVP, Research Solutions, Meredith Corporation, “We know magazine advertising works, and now we have the numbers to see how it stacks up. This is why we were so supportive of the MPA: Association of Magazine Media's decision to launch an industry-wide sales guarantee program for advertisers who partner with them on large scale magazine ad based programs.” She adds, “We know from our own experience with over 60 studies completed since we launched the Meredith Sales Guarantee program in 2012, that this program gives advertisers the best return for their advertising spend.”
Jim Spaeth, Sequent Partners, "Attribution measurement has become an essential skill for marketers' success. This is a complex task for the media and advertising industry. And companies like NCS are making huge advancements in this field for CPG brands."
Alice K. Sylvester, Sequent Partners, "NCS’ metrics are laser-focused on the relationship between ad exposure and sales. They provide a uniquely precise view of advertising’s actual impact on in-store sales. Now brands can understand how their returns compare across media and media tactics.”
See the full set of benchmarks online, here.
About Nielsen Catalina Solutions
NCS (Nielsen Catalina Solutions) is a purchase-based ad targeting and ROAS measurement company serving the CPG industry. We integrate in-store purchase data from over 90 MM households with media exposure data from TV, online, mobile, print, radio and CRM to help consumer packaged goods advertisers, agencies and media companies define their most valuable audience, reach them with advertising and measure incremental sales from the campaign. The joint venture between Nielsen and Catalina has helped over 200 advertisers and 450+ brands optimize ad performance to drive revenue growth and increase return on ad spend. Visit us at www.ncsolutions.com to learn more.
