Nielsen has published its first report on ROI, the return on investment, or the return on investment, identifying gaps in the budgets, channels and media strategies of marketing managers that are compromising the returns on investments (ROI ) of media programs. The global report reveals the data and provides insights into what generates returns on advertising investments, how to measure returns and how to improve the metrics that brands already have, with exclusive content for advertisers, agencies and publishers.
This is Nielsen’s first ROI report. The results of the ROI report were generated by Nielsen using a wide range of measurement methods, including marketing mix models, brand impact studies, marketing plans and spend data, attribution and Ad Ratings collected in recent years. In most cases, Nielsen’s findings were organized into normative databases or meta-analyzes on a sample of studies to produce representative insights into Nielsen’s experience, providing marketing executives, agencies and media vendors with a better insight. complete the effectiveness of the media compared to the experience of a single company.
According to the report, about half of marketers are not spending enough on a channel to generate maximum ROI. While poor ROI can lead brands to cut back on spending, Nielsen found that often spending needs to be higher to meet goals and generate returns. According to Nielsen’s “50-50-50 gap”, while 50% of media plans are under-invested by a median of 50%, ROI can be improved by 50% with an ideal budget.
Beyond the budget, the ROI report provides key insights and advice to generate higher ROI across multiple marketing channels including:
- Marketing full-funnel: channels rarely generate above-average returns for both brand and sales; in fact, only 36% of the media channels are positioned above the average both in terms of profits and market metrics. To increase ROI, brands should pursue a balanced strategy for both upper-funnel and lower-funnel initiatives. Nielsen found that adding an upper-funnel marketing strategy to a mid- and lower-funnel can increase overall ROI by 13-70%.
- Emerging media: It is difficult for brands to invest large sums without proof that new media works, but spending small amounts may not be enough to analyze the results. Nielsen found that podcast ads, influencer marketing and brand-related content can generate over 70% solicited brand recall, and that the ROI of influencer marketing is comparable to the ROI of traditional media.
- Advertising Sales Growth Strategy: ultimately, it is ROI that informs publishers’ pricing power. Publishers are not only competing with other actors in their channel, but with other channels as well; therefore, comparing channel ROIs can help define the pricing strategy.
- Audience measurement: campaigns with strong coverage ensure better sales results. However, only 63% of desktop and mobile ads reach the desired audience in terms of age and gender in the United States, which means that on channels with the most complete quality and data coverage, over a third of ad spend misses the mark. To capitalize on opportunities and make an impact, advertisers need to prioritize metering solutions that cover all platforms and devices and deliver information in near real time. “Nielsen’s 2022 ROI Report serves as a guide for brands, agencies and publishers. In an age where you can reach your desired audience with more channels than ever, it is imperative that ROI information is accessible and easy to understand. “explained Imrah Hirani, Nielsen’s Vice President, Media & Advertiser Analytics. “Brands can’t afford to waste valuable ads on the wrong audience. By investing wisely and adopting a balanced strategy for both upper-funnel and lower-funnel initiatives, brands can reach the right audience and maximize their ROI.”
There are six tips and best practices to get better results in terms of ROI emerging from the report:
Tip 1: Improve your targeting to increase ROI
Extending your marketing budget to achieve effective coverage of the ever-expanding media landscape is a major challenge. This is why it is important to understand the reach and frequency of advertising campaigns between the platform and the publisher. According to Nielsen Digital Ad Ratings (DAR), nearly 40% of digital advertising budgets are wasted on the wrong audience, and targeting efficiency is a strong indicator of ROI performance.
In the era of data-driven marketing, leveraging indicators to optimize campaigns in near real time is the key to effectively reaching your target audience and increasing ROI. Recently, Nielsen conducted an analysis to verify the effectiveness of serving correct ads to appropriate audiences and the consequent improvement in ROI, confirming that audience metrics are an early indicator of campaign performance.
2nd tip: measure and maximize your brand metrics
Creating brand awareness is the global marketing goal in 2022, and it’s easy to see why: Nielsen data shows that, on average, a 1 point gain on one of the brand’s criteria, such as awareness and consideration of the public, generates an increase in sales of 1%. In addition, increased awareness and consideration improves the efficiency of conversion-oriented marketing operations.
Today, however, brands often measure the impact of the media on sales and rarely the impact of the media on the brand itself. This can be counterproductive, because channels rarely obtain positive results both on sales and on the brand, indeed, this happens only in 36% of cases. To harness the full potential of a campaign, it is crucial to use a mix of various channels that favor both ends of the funnel.
3rd tip: use creativity to drive sales
In an increasingly fragmented media landscape where consumers are subject to an overabundance of advertising, exceptionally creative ads are often critical to gaining and retaining their attention.
A recent study by Nielsen, commissioned by Meta, looked at three years of MMM data for 41 brands across a wide range of consumer goods categories and found that campaigns with high-quality creativity achieved an impact. 35% higher efficacy.
4th tip: new media = new ways of engaging customers
Given the current glut of new media platforms and formats available to consumers, marketers have plenty of means to engage potential buyers. With each new marketing channel, attribution and optimization become critical in identifying the formats that generate the most ROI.
Brands that invest in new media and formats are seeing important returns. In fact, a study by Nielsen and Snap found that ads that featured augmented reality led to substantially higher ROI than other media, while another Nielsen study with TikTok indicated that brands running more formats advertising for their TikTok campaigns leads to a 12% higher return on ad spend, compared to brands that have only focused on a single ad format. Nielsen’s 2022 ROI Report shows podcast ads, influencer marketing, and brand-related content have a major impact on growing brand metrics.
Tip 5: Optimize your spending across regions to see an increase in ROI
Brands often believe that poor ROI indicates the need to reduce spending. However, it is possible that brands are spending too little and failing to break the wall and make an impact. Nielsen’s ROI report found that 50% of media plans are underinvested by an average of 50%. But if marketing teams invest the ideal amount of resources, their ROI could jump 50%.
Tip 6: Leverage multiple datasets for better insights and performance
The most effective marketing tactics that get the most ROI combine the power of behavioral and contextual data. By integrating contextual data with high-quality, deterministic-sourced behavioral data, marketers can achieve their campaign goals more effectively and efficiently. In fact, according to Nielsen attribution rules, impressions proposed to audiences using behavioral targeting produce a higher ROI than impressions proposed using contextual targeting only.
Gone are the days of “set and forget” marketing campaigns. To keep up with the rapid evolution of consumer tastes, brands must have adaptive strategies in place, capable of mutating and adapting according to changes in public behavior. As with most marketing challenges, measuring the effectiveness of channels and optimizing marketing campaigns are more manageable when you leverage the right data and the right tools, capable of transforming data into actionable insights. .