According to a ROI report by international marketing research firm Nielsen, about 50% of marketers do not spend enough to obtain the maximum return on investment (ROI). The report identifies budget, channel, and media strategy gaps that have a detrimental effect on media plans’ return on investment. It draws attention to a “50-50-50 Gap,” where, despite the median underinvestment of 50% in 50% of media plans, ROI can be increased by 50% with the right budget.
Even though brands may occasionally cut back on spending due to a poor ROI, more money must typically be spent in order to succeed and generate returns. According to Nielsen, a brand’s media spend should account for between 1 and 9 percent of its revenue in order to remain competitive.
One of the key lessons that the research firm discovered was underinvestment. This conclusion was reached after analyzing nearly 1,50,000 observations of marketing ROI and its database of client-supplied media plans. In addition to the budgeting observations, the global report offers a few crucial insights to increase ROI in a variety of marketing areas.
Full-funnel marketing is the focus of the first suggestion. The research company advises brands to pursue a balanced strategy for both upper and lower-funnel initiatives in order to increase ROI. The overall ROI can increase by 13 percent to 70% by incorporating upper-funnel marketing into already existing lower and mid-funnel marketing.
Second, Nielsen points out that small investments in these media make it difficult to assess the results, even though it is difficult for brands to spend significant sums without evidence that emerging, new media is effective. According to the report, podcast advertisements, influencer marketing, and branded content can help increase brand recall by over 70%. Additionally, influencer marketing ROI is actually on par with ROI from traditional media.
Publisher pricing power will ultimately be influenced by ROI in terms of ad sales growth strategy.
Comparing channel ROIs can assist in developing a pricing strategy because publishers compete not only with those in their own channel but also with those in other channels. The report notes that while social media receives less than one-third of TV ad spend, it offers a ROI that is 1.7 times greater than that of television.
Campaigns with a significant on-target reach can result in better sales outcomes in terms of audience measurement. Advertisers should give priority to measurement solutions that cover all platforms and devices and provide near-real-time insights in order to seize opportunity and increase impact.
A variety of measurement techniques, such as marketing-mix models, brand-impact studies, marketing plans and expenditure data, attribution studies, and ad ratings gathered in recent years, were used to generate the findings for Nielsen’s ROI report, the company’s first-ever.