The first-ever ROI Report from Nielsen revealed shortcomings in budget, channel, and media strategy, jeopardizing marketers’ returns on investment (ROI) on media programs. With information tailored to advertiser, agency, and publisher audiences, the global study provides statistics and insights on what influences returns on ad spending, how to quantify the returns, and how to improve on the metrics businesses already have.
The survey claims that almost half of marketers do not invest enough in a channel to achieve the highest ROI. While a low ROI could lead brands to cut back on expenditure, Nielsen discovered that a more significant spend is necessary in many cases to break through and generate returns.
According to Nielsen’s “50-50-50 Gap,” while 50% of media plans have median under-investment of 50%, ROI can be increased by 50% with the proper budget.
Beyond budgeting, the ROI Report provides significant insights and advice to generate improved ROI across a variety of marketing domains, such as:
Full Funnel Marketing:
Only 36% of media channels performed better than average in terms of revenue and brand metrics, making it uncommon for channels to produce above-average returns for both brand and sales outcomes. Brands should follow a balanced strategy for both upper and lower funnel activities to increase ROI. According to Nielsen, increasing the overall ROI by 13–70% by combining lower-and mid-funnel marketing with upper-funnel marketing is possible.
It is challenging for brands to spend large sums of money without evidence that the new media is effective. However, spending little money might make it challenging to determine whether the media is effective. According to Nielsen, influencer marketing ROI is on par with ROI from traditional media, and podcast commercials, branded content, and influencer marketing can help increase brand recall by over 70%.
Ad Sales Growth Strategy:
In the end, publisher pricing power will be determined by ROI. The ROI Report found that while social media receives less than one-third of TV ad budgets, it generates 1.7 times as much ROI as television. Comparing channel ROIs can assist in developing a pricing strategy because publishers compete with their channels and those in other channels.
Strong on-target campaigns produce higher sales results. However, in the United States, only 63% of desktop and mobile advertising is age and gender-appropriate, which means that on the channels with the most thorough data coverage and quality, more than 33% of ad expenditure is off-target. Advertisers should prioritize measurement solutions covering all platforms and devices and offer near-real-time insights to seize opportunities and generate impact.
Nielsen produced the ROI Report conclusions using various measuring techniques, such as marketing mix models, brand impact studies, marketing plans, expenditure data, attribution studies, and ad ratings gathered in recent years. To produce insights representative of Nielsen’s experience, most of Nielsen’s findings were compiled into normative databases or meta-analyses across a sample of studies. As a result, marketers, agencies, and media sellers now have a more comprehensive understanding of the effectiveness of media than they would have had if a single business relied solely on its own experience.