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For Retailers:
The Impact of Online Advertising
Based on a meta-analysis of econometric studies by BrandScience
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Online Currently Receives a Low Share of Media Spend
27%27%
23%
10%
7%6%
0%0%
10%
20%
30%
TV Print DM Online Radio Outdoor Cinema
Sh
are
of
Med
ia M
ix
Current Media Mix Allocation for Retailers
TV Print DM Online Radio Outdoor Cinema
Source: Nielsen Media Research/BrandScience Estimates – UK Retailers who spend £1m+ on advertising p.a. Only includes retailers who spend online. Includes Search.
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The Section Key helps your audience track where you are in the presentation. It should live at the bottom of every
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Facts about online advertising for retailers:
• More efficient than TV
• The most efficient medium for online retailers
• Return on investment is yet to peak
• The performance of other media can be improved by spending more online
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The Section Key helps your audience track where you are in the presentation. It should live at the bottom of every
page in your presentation. It is, of course, optional. But worth the trouble.
THE SECTION KEY DOES NOT AUTOPOPULATE. If you move slides around within a deck, you’ll have to redo it.
“You only get out of
something what you
put into it.”
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Sales
Market Share
Customer Acquisition
Brand Perception
5
Econometric Modelling
Applying Maths to Marketing
• 26 UK retailers who spend online
• 24 of those in top 100 retailers ranked by media spend
Marketing Activity
Pricing
Weather
Competitor Activity
Drivers Performance
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Calculating Revenue Return on Investment
Revenue Gained Through Marketing Activity
Cost of Marketing Activity= RROI
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7
The Section Key helps your audience track where you are in the presentation. It should live at the bottom of every
page in your presentation. It is, of course, optional. But worth the trouble.
THE SECTION KEY DOES NOT AUTOPOPULATE. If you move slides around within a deck, you’ll have to redo it.
Online is More Efficient than TV for Retailers
£1.85
£5.01
£3.44
£2.15
£1.62
£1.11
£0.00
£1.00
£2.00
£3.00
£4.00
£5.00
£6.00
Radio Print Online TV Outdoor DM
RR
OI
Total Retail*
% Media
Mix2% 41% 19% 16% 7% 14%
* Includes all 26 studies that were included as part of this analysis
Based on a meta-analysis of econometric studies by BrandScience
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9
The Section Key helps your audience track where you are in the presentation. It should live at the bottom of every
page in your presentation. It is, of course, optional. But worth the trouble.
THE SECTION KEY DOES NOT AUTOPOPULATE. If you move slides around within a deck, you’ll have to redo it.
Bricks & Mortar (“Offline”) Retailers
17
Studies
Brands featured in this presentation are for illustrative purposes only and may or may not be included as part of the study - BrandScience Confidential
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10
The Section Key helps your audience track where you are in the presentation. It should live at the bottom of every
page in your presentation. It is, of course, optional. But worth the trouble.
THE SECTION KEY DOES NOT AUTOPOPULATE. If you move slides around within a deck, you’ll have to redo it.
Online is the Second Most Efficient Media Behind Print
Bricks & Mortar Retailers
£2.50
£6.41
£2.84£2.43
£2.21
£0.91
£0.00
£1.00
£2.00
£3.00
£4.00
£5.00
£6.00
£7.00
Radio Print Online TV Outdoor DM
RR
OI
Revenue Return on Investment
% Media
Mix4% 40% 16% 20% 9% 12%
Based on a meta-analysis of econometric studies by BrandScience
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Online Retailers
9
Studies
Brands featured in this presentation are for illustrative purposes only and may or may not be included as part of the study - BrandScience Confidential
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12
The Section Key helps your audience track where you are in the presentation. It should live at the bottom of every
page in your presentation. It is, of course, optional. But worth the trouble.
THE SECTION KEY DOES NOT AUTOPOPULATE. If you move slides around within a deck, you’ll have to redo it.
Online is the Most Efficient Medium
Online Retailers
£0.71
£1.48
£3.75
£1.02
£0.23
£1.06
£0.00
£0.50
£1.00
£1.50
£2.00
£2.50
£3.00
£3.50
£4.00
Radio Print Online TV Outdoor DM
RR
OI
Revenue Return on Investment
% Media
Mix1% 47% 29% 8% 4% 12%
Based on a meta-analysis of econometric studies by BrandScience
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What can be gained from increasing the weight of online spend?
Improved online ROI
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14
The Section Key helps your audience track where you are in the presentation. It should live at the bottom of every
page in your presentation. It is, of course, optional. But worth the trouble.
THE SECTION KEY DOES NOT AUTOPOPULATE. If you move slides around within a deck, you’ll have to redo it.
Introducing Above and Below Median
10 50 70 200 450
Median AboveBelow
• An equal number of campaigns above and below the median
• More accurate than mean average – less skew to higher or lower spending campaigns
500
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Increase Online Share to Increase Online ROI
Online ROI vs Online Spend
£1.42
£2.24
£0.00
£1.00
£2.00
£3.00
£4.00
£5.00
£6.00
Below Median Above Median
On
lin
e R
RO
I
Online Spend
+58%
£2.51
£5.69
£0.00
£1.00
£2.00
£3.00
£4.00
£5.00
£6.00
Below Median Above MedianO
nli
ne
RR
OI
Online Spend
+127%
ROI Curve
Based on a meta-analysis of econometric studies by BrandScience
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Varying online spend can also affect the performance of other media
Improved ROI for TV & Press
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Increase Online Share to Increase TV ROI
£1.59
£3.91
£0.00
£0.50
£1.00
£1.50
£2.00
£2.50
£3.00
£3.50
£4.00
Below Median Above Median
TV
RR
OI
Online Spend
+146%
£0.46
£1.63
£0.00
£0.50
£1.00
£1.50
£2.00
£2.50
£3.00
£3.50
£4.00
Below Median Above MedianT
V R
RO
IOnline Spend
+254%
Based on a meta-analysis of econometric studies by BrandScience
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Print ROI Does Not Follow Suit
£9.98
£3.10
£0.00
£2.00
£4.00
£6.00
£8.00
£10.00
Below Median Above Median
Pri
nt
RR
OI
Online Spend
£0.65
£2.43
£0.00
£2.00
£4.00
£6.00
£8.00
£10.00
Below Median Above MedianP
rin
t R
RO
IOnline Spend
+274%
Based on a meta-analysis of econometric studies by BrandScience
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Print ads often have an offline call to action
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Varying online spend can also affect the life of a campaign
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Ad Stock – Life of Campaign
Ad
Sto
ck
Time
Carryover rate 90% Carryover rate 50% Campaign Activity
100%
5%
100%
5%
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Increase the Life of Online Campaigns with More Online Investment
910
0
3
6
9
12
15
Below Median Above Median
On
lin
e L
ife -
Days
Online Spend
7
11
0
3
6
9
12
15
Below Median Above MedianO
nli
ne
Lif
e -
Days
Online Spend
Based on a meta-analysis of econometric studies by BrandScience
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Make TV Campaigns Work Harder with Extra Online Spend
38
49
0
10
20
30
40
50
60
70
80
Below Median Above Median
TV
Lif
e -
Days
Online Spend
49
73
0
10
20
30
40
50
60
70
80
Below Median Above MedianT
V L
ife
-D
ays
Online Spend
Based on a meta-analysis of econometric studies by BrandScience
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Print Life Can Be Extended for Online Retailers
35
28
05
1015202530354045
Below Median Above Median
Pri
nt
Lif
e -
Days
Online Spend
31
40
05
1015202530354045
Below Median Above MedianP
rin
t L
ife -
Days
Online Spend
Based on a meta-analysis of econometric studies by BrandScience
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What should the media mix be for the industry?
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£2.50
£2.88
£3.26
£2.00
£2.20
£2.40
£2.60
£2.80
£3.00
£3.20
£3.40
10% 15% 20%
To
tal R
RO
I
Level Of Online Investment
Increasing Online Investment
Increase Overall Return on Investment Through Increased Online Spend
Based on a meta-analysis of econometric studies by BrandScience
Current
Industry
Spend
+30%
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27% 27%
23%
10%
7% 6%
0%
17%
37%
13%
20%
7% 6%
0%0%
5%
10%
15%
20%
25%
30%
35%
40%
TV Print DM Online Radio Outdoor Cinema
Me
dia
Sp
en
d A
llo
ca
tio
n
Reallocating Spend for Maximum ROI
£2.50 RROI
£3.26 RROI
Reallocate Money to Online and Print from TV and Direct Mail
Based on a meta-analysis of econometric studies by BrandScience
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29
The Section Key helps your audience track where you are in the presentation. It should live at the bottom of every
page in your presentation. It is, of course, optional. But worth the trouble.
THE SECTION KEY DOES NOT AUTOPOPULATE. If you move slides around within a deck, you’ll have to redo it.
Recommendations:
• Retailers should increase the weight of online spend in order to:• Increase online ROI
• Make TV and press work harder
• Improve efficiency of the entire integrated campaign
• In order to increase retention rates, retailers should explore more creative
online executions and new messaging• Based on this evidence we believe better creatives and more brand driven advertising will lead to better retention
rates and therefore improved ROI