Cross-media study shows print ads have highest ROI

Erik Grimm, research director at NPD Nieuwsmedia, says that while ad campaigns should feature a healthy mix of new and conventional media, recent research points to print as the platform with the best ROI.

Are advertising budgets well spent?

In times of economic crisis especially, it is tempting to focus on costs. Media budgets are limited in general, and print advertising in particular is experiencing a considerable decline. Online advertising is flourishing, while TV seems to maintain its share.

But what about the return on investment of advertising in these media channels? Is the shift toward online a rational decision? A media campaign should not be judged solely on costs, discount, or reach.

It is results that count. How can the yield of advertising be judged?

In the last few years, return on investment (ROI) has become the most popular key performance indicator to evaluate the selected media mix.

Thorough method of measuring media ROI

Following the example of a German study, Dutch news media and GfK Research have studied the options to optimise media usage.

In a study of 10 different multi-media campaigns, the additional sales of brands is compared to the media spend to calculate the yield of the advertising euro.

And the insights from this study appear to be similar to earlier results: By fine-tuning the chosen media channels, much more media effectiveness can be realised.

Remarkably, the print media are delivering the best returns. Beside these interesting observations, some useful additional insights can be derived.

The highlights of this media ROI study will be presented during INMA's Advertising Ideas Day in Amsterdam on February 28.

Method of ROI study

GfK Panel Services is a research company specialising in ROI studies. This agency measures through a consumer panel both the purchase and the media behaviour.

Most media usage and also FMCG purchases are registered electronically; other media and other product purchases are tracked through a questionnaire.

By correlating the media exposure and purchase behaviour, the impact on additional sales can be calculated, the so-called "sales uplift".

In this approach, media ROI reflects the relationship between the gross advertising costs and the short-term returns on these media investments.

In this cross-media study, 10 diverse campaigns were studied, including advertisements for: coffee, a lottery, an Internet provider, a dairy brand, travel agency, and global players such as H&M, IKEA, and Vodafone.

The study reports the performance of five media channels: news print, magazines, radio, TV, and online banners.

The results

Recently, GfK has aggregated these campaigns into one meta study that reveals clear insights. Print advertising appears to have the highest ROI: 120%. Every euro invested in news print ads delivers a return on average of €1.20.

That means that advertisers on average earn back their print advertising investment within the campaign period and even earn 20% extra.

And print campaigns don’t have to be limited to sales-oriented advertising; the study also shows that even branding campaigns in newspapers deliver better ROI than TV spots.

GfK's explanation for the outstanding performance of newspaper ads: The internal pacing of print ads enables confrontation at a suitable moment. If the message is relevant, the reader can decide to take his time to examine the offer. Because reach is built within 24 hours, newspapers perform very quickly.

ROI graph

Recommendations for better ROI of advertising

Advertising in print media is most lucrative, followed by online banners. Radio and TV stay behind. The key takeaway is that success lies in the shares within the chosen media mix. It is wise not to rely on only one media channel.

With optimalisation of the frequency much can be gained. TV is not efficient because of an overspend in GRPs. Because of the diminishing returns, more than 10 confrontations are a waste. With a modest shift toward print, a campaign can be significantly more effective.

On the whole, print media appear to be a smart choice for advertisers. They deliver good ROI, especially with several inserts. Innovation in advertising is indispensable, but this study shows that conventional channels like print can realise an excellent media ROI.

Print deserves a fair share. A mixture of conventional media and new media is key. But my recommendation is, above all, not to behave "penny-wise, pound-foolish".

Again, the highlights of this media ROI study will be presented on INMA's Advertising Ideas Day in Amsterdam on February 28.

Source: INMA 

by Erik Grimm 07/02/14

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