Brands are missing out on £3 billion profit by underspending in news brands, according to Newsworks’ latest effectiveness research, Planning for Profit, conducted with Benchmarketing.
The study — a meta-analysis of 684 econometric models built between 2011 and 2017 — concentrates on profitability, the primary indicator of marketing success.
Encompassing news brands in both their print and digital forms, the work isolates news brands’ digital spend from general online display for the first time, allowing for an accurate assessment of the impact of context in the online environment.
As Philippa Brown, chief executive of Omnicom Media Group, says: “Digital news brands are often singled out for the brand safe online environment they provide advertisers, and rightly so. What’s so encouraging about this work is that it proves that these environments are also primed to deliver solid business returns for advertisers if utilised at the right level.”
Overall, the research highlights the huge profit advertisers are missing out on by not investing in news brands at optimum levels — £3 billion overall.
Looking at digital news brands, boosting investment would result in higher profit levels, up to as much as £300 million. Meanwhile, in print, increasing news brands’ share of budget to the optimum level would more than double current campaign profit return on investment (PROI).
To make the results of the work as widely applicable as possible, Benchmarketing developed five super-categories, such as “Everyday pickups” and “Shiny new things.” These cover 86% of the total UK advertising market and more than 90% of advertised brands.
In addition, there is also in-depth category analysis for four individual categories: supermarkets, finance, motors, and retail.
Take a look at some of the key findings for each:
- Supermarkets: Profits could be increased by 60% if spend in print news brands was raised by a minimum of four and up to 11 percentage points. For digital news brands, allocating a 2.1% share of budget is recommended to optimise PROI.
- Finance: Clients are missing out on £264 million potential profit by under-investing in print and digital news brands. For maximum profit return, the average recommendation for print news brands’ share is 11.9% of overall campaign spend (compared to the current 7.2%), while for digital news brands it stands at 5.6% (compared to the current 4.1%).
- Motors: Clients are missing out on £56 million potential profit by under-investing in newbrands, particularly print. With a current average spend of 4% of overall media budgets, print news brands’ recommended minimum share is 6%.
- Retail: Boosting print’s share of media spend to an average 21% of total campaign investment (from just under 14.4%) and digital news brands’ to 3.7% (from 1.7%) is Benchmarketing’s recommendation. Overall, the category is missing out on £1.34 billion potential profit.
The results of the category and super-category analysis have been fed into a PROI optimiser tool, allowing planners to see how much they should be investing in news brands for optimum returns. As a whole, the study provides clear evidence advertisers could be achieving much higher pay back from news brands if levels of investment were tweaked.
It also highlights the fact news brands deliver real, measurable business returns. As media commentator Brian Jacobs wrote of the research for Mediatel: “It’s refreshing to be reminded of the obvious fact that advertisers advertise in order to deliver results — particularly profit. This may come as a shock to those who seem to think advertising is doing its job by delivering huge and largely meaningless metrics from digital media forms, but the fact remains that it’s up to all of us to prove that advertising does in fact build business.
“And, that good advertising in the most appropriate environment works a lot better than bad advertising placed somewhere by someone, or more likely something, making choices based on the biggest numbers.”