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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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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International Director, Media and Insights | Strategic Partner | Client/Business Enablement | Account Lead | Capability Development
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
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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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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
Advertising’s longer term ROI more than double short term, study finds
https://www.marketingweek.com
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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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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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Unveiling the Truth 👉 Common Misconceptions in Advertising The world of advertising is replete with misconceptions that can often lead to misguided strategies. Today, we will dissect and debunk five of the most prevalent myths. 1: Advertising is an Expense, Not an Investment Myth: Advertising is a costly expense that drains resources. Truth: Advertising is a strategic investment that can yield significant returns. Example: A well-planned advertising campaign can increase brand visibility, drive sales, and foster customer loyalty. 2: The More Advertising, The Better Myth: Frequent ads will automatically lead to higher sales. Truth: Quality and relevance of ads are more important than quantity. Example: An ad that resonates with the target audience can have a more significant impact than numerous unrelated ads. 3: Advertising Results are Immediate Myth: The impact of advertising campaigns is instant. Truth: Advertising results are often gradual and require consistent effort. Example: Building brand recognition and trust through advertising is a long-term process. 4: Digital Advertising is the Only Effective Medium Myth: Traditional forms of advertising are outdated and ineffective. Truth: The effectiveness of advertising channels depends on the target audience and campaign objectives. Example: Radio and TV ads can still be highly effective for a local or older demographic. 5: All Publicity is Good Publicity Myth: Any form of attention, even negative, is beneficial for your brand. Truth: Negative publicity can damage a brand's reputation and trustworthiness. Example: A controversy or scandal can lead to a decline in sales and customer loyalty. Understanding the reality behind these myths can empower us to make more informed decisions and develop more effective advertising strategies. It's time to move away from misconceptions and embrace the truth. What other advertising myths have you encountered or debunked in your professional journey? #AdvertisingMyths #MarketingInsights
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Marketers often say “half of my ad budget is wasted, I just don’t know which half,” as a half-hearted justification for not knowing what happened to their ad spend. Yet sadly, it’s not unsubstantiated. Research from 2023 found that many #companies ineffectively spend between 40% and 60% of their budgets. The portion that isn’t wasted generates demand but is often left for competitors to mop up due to the challenges #advertisers face in following brand-building activities with effective performance ads. Read more: https://lnkd.in/ePFXSDYt
Great ads create demand. But then what?
https://www.marketing-beat.co.uk
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How do you approach investment in new advertising platforms? For channels that drive clicks/site-sessions, I use analytics platforms to breakdown their upper-funnel activity and compare it to proven platforms. Step 1: Understand the Time to Purchase for your business – this metric is essential to set realistic expectations for how long it will take before seeing tangible results from new advertising efforts. Step 2: Establish benchmarks on upper-funnel activities – how do proven Direct-Response advertising platforms perform across KPIs such as: Cost Per New Site Visitor, Cost Per Add-to-cart (ATC), New Visitor (%), Session Duration, Bounce Rate. These benchmarks each tell a story on the quality of traffic being driven to the site. Step 3: Monitor and evaluate the new channel against benchmarks – is the platform driving cheap traffic with high bounce rate, are there new sessions with low Cost Per Add-to-cart (ATC)? These KPIs don't get a lot of attention, but are often leading indicators to how a new channel will integrate in to a broader media strategy. Bonus: If you're seeing a surge of low-cost traffic from a new channel but are concerned about high bounce rates, consider calculating the Cost Per Qualified Site Visit using the following formula: = Cost / (Site Sessions x (1 - Bounce Rate%)) This custom metric will inform on the cost of sessions that did not bounce – doing this across each paid traffic source can help avoid being misled by superficially cheap traffic or high bounce rates. There are certainly better, sophisticated, methodologies but they often cost more money and take more time – the above is a scrappy approach to get an immediate read on a new channel.
