Source: This is the first ROI report produced by Nielsen. It reveals data and delivers insights on what drives returns on ad spends, how to measure the returns, and how to improve on the metrics brands already have, with content unique to advertiser, agency and publisher audiences. The findings were generated by Nielsen using a range of measurement methods including marketing mix models, brand impact studies, marketing plans and expenditure data, attribution studies, and ad ratings collected in recent years.
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- Media spend often needs to be higher to break through and drive returns. Nielsen’s “50-50-50 Gap” states that while 50% of media plans are underinvested by a median of 50%, ROI can be improved 50% with the ideal budget.
- It is rare for channels to deliver above-average returns for both brand and sales outcomes, with 36% of media channels faring above average on both revenue and brand metrics. To grow ROI, brands should pursue a balanced strategy for both upper and lower funnel initiatives. Nielsen found that adding upper-funnel marketing to existing lower- and mid-funnel marketing can grow overall ROI by 13-70%.
- Ultimately, ROI will inform publisher pricing power. Publishers are not just competing against others in their channel, but also against other channels, so comparing channel ROIs can help set pricing strategy. The report found social media delivers 1.7x the ROI of TV, yet social gets less than one-third of TV ad budgets.
- Campaigns with strong on-target reach deliver better sales outcomes. However, only 63% of ads across desktop and mobile are on-target for age and gender in the US, meaning that on the channels with the most exhaustive data coverage and quality, over one-third of ad spend is off-target. To capitalize on opportunity and drive impact, advertisers should prioritize measurement solutions that cover all platforms and devices, with near-real time insights.