1. The ROI study - Retail Sales return
A meta-analysis of 500+ econometric models
2011 – 2016
This study represents an unprecedented insight into how advertising works for newsbrands. It is a bespoke analysis of Omnicom’s econometrics data vault
•500 statistical models, identifying immediate and longer term impact on revenue and Return on investment
•Models across multiple categories covering the last five years, and combined with industry spend sources – Standard Media Index and Nielsen
• We focus on the impact of newsbrands in a multimedia and increasingly digital media mix, in terms of incremental sales and Revenue Return On Investment

2. 3 key questions 1
How effective are campaigns that use print newsbrands versus those that do not? 2
What impact do print newsbrands have on the effectiveness of other media channels? 3
What proportion of the budget should be spent on print newsbrands to deliver optimum total campaign ROI?
For this particular study Newsworks wanted the answers to 3 key questions:
1. How effective are campaigns that use print newsbrands versus those that do not?
2. What impact do print newsbrands have on the effectiveness of other media?
3. What proportion of the budget should be spent on print newsbrands to deliver optimum total campaign ROI?

3. The evidence
Print newsbrands boost overall campaign ROI by three times on average 1
Print newsbrands make TV twice as effective and online display four times as effective 2 3
Spend on print newsbrands should return to 2013 levels, and can be boosted further by use of digital newsbrands
Print newsbrands have a respectable direct ROI vs other offline channels, but there is evidence across all categories that including print newsbrands in the mix improves the overall campaign ROI – by an average of THREE times
Not only that, but print newsbrands boost the ROI of other channels – they make TV twice as effective, online display four times as effective and radio between four and ten times more effective.
It is no surprise that newsbrand advertising has been in sharp decline. Our analysis shows that the exodus has been overdone, the optimal mix % for print newsbrands is closer to 2013 levels than current 2015/2016 levels – the pendulum has swung too far
Source: Benchmarketing analysis of 500+ econometric models

4. The study analysed six categories
Retail
Finance
Automotive
Combined services
Travel & Transport
FMCG
Our evidence comes from hundreds of econometric modelling projects run by BrandScience, between 2011 and 2015
•Spans six different categories
Combined services (retail, finance, travel, entertainment, government and telecoms)
Retail
Finance
Travel/Transport
Automotive
FMCG
We look at all channels as part of our modelling. One point to note though is that digital newsbrands are included in online display in the econometric models. No-one has yet modelled digital newsbrands as a separate channel. However we know that they complement print incredibly well, and boost print ROI when included.
So our analysis focuses on print newsbrands and their role in the total campaign mix.

5. This document looks at Retail - and for some analyses also Combined services
Our evidence comes from hundreds of econometric modelling projects run by BrandScience, between 2011 and 2016
•Spans six different categories
Combined services (retail, finance, travel, entertainment, government and telecoms)
Retail
Finance
Travel/Transport
Automotive
FMCG
We look at all channels as part of our modelling. One point to note though is that digital newsbrands are included in online display in the econometric models. No-one has yet modelled digital newsbrands as a separate channel. However we know that they complement print incredibly well, and boost print ROI when included.
So our analysis focuses on print newsbrands and their role in the total campaign mix.

6. How has adspend evolved in the last five years?
Let’s look first at the advertising spend context. The challenge has been to establish the true picture of spend across channels, especially in digital.

7. SMI data provides a representative picture of actual media mix
Actual media spend from booking data provided by 65% of UK agencies
Detailed breakdown of digital spend across display, video and paid search
Data across all above the line media
Breakdown of newsbrand spend across print and digital
So for this analysis we have used a source called Standard Media Index, which provides a much more accurate and representative picture of the actual media mix.
It is based on actual media spend from booking data covering 65% of UK media agency billings. The data covers all above the line media. Importantly it provides a detailed breakdown of digital spend across display, video and paid search. So for newsbrands it covers spend both in print and in digital.
Source: SMI (Standard Media Index)

8. Across all categories, total newsbrand spend has declined since 2011
13.7%
2013
11.9%
2014
9.7%
2015
14.4%
2012
15.4%
2011
Combining print and digital newsbrands, the picture is one of decline. Although investment in digital newsbrands is growing, it is not yet compensating for the exodus from print.
Source: Total available categories SMI Newsbrands = Newspapers (inc newspaper magazines), Digital newsbrands
Source: Total available categories SMI

9. Digital channels accounted for a third of media spend in 2015
31.6%
50% 0%
43.0%
1.4%
9.4%
3.6%
3.4%
7.6%
2.1%
11.1%
5.8%
12.6%
9.7% TV
Cinema
OOH
Radio
Magazines
Print newsbrands
Online newsbrands
Other digital display
Digital video
Search
Looking at SMI for the calendar year 2015, we can see that TV is still the biggest single channel, , digital combined comes in at a third of total spend and newsbrands account for just under 10% of the market.
% spend over the year – All categories
Source: Total available categories SMI Newsbrands = Newspaper Magazines, Newspaper, Digital Print Digital = Digital Video, Digital Display, Digital Programmatic, Search
Source: Total available categories SMI

10. Digital has grown from 21.7% in 2011 to 31.6% in 2015
Source: Total available categories SMI

11. Digital media spend is growing for Retail but newspapers are still the #2 channel in this category
Looking at individual categories, in Retail print newsbrands remain the number #2 channel despite the decline
Source: Total available categories SMI

12. In retail, print newsbrands remain the #2 channel despite the decline
27.1%
2013
22.3%
2014
16.5%
2015
28.1%
2012
30.1%
2011
Looking at individual categories,
In retail print newsbrands remain the number #2 channel despite the decline
Source: SMI retail category Print newsbrands = Newspapers (inc newspaper magazines)
Source: Total available categories SMI

13. Has the pendulum swung too far?
Combining print and digital newsbrands, the picture is one of decline. Although investment in digital newsbrands is growing, it is not yet compensating for the exodus from print.
Source: Total available categories SMI Newsbrands = Newspapers (inc newspaper magazines), Digital newsbrands

14. Our exploration So that sets out the advertising spend context.
We’ll now turn to the performance of print newsbrands in driving return on investment. Before we do so, a few words on the methodology, and how we got there.

15. Econometrics – identifying and assigning a weight to the ingredients driving sales
Advertising x medium and message
PR, Media mentions, Buzz
Pricing vs competitors
Store universe changes
Product/Range changes
Brand awareness/perceptions
Competitor marketing
Competitor routes to market
Technological change
Seasonality
Economic change
If sales are a cake, econometrics determines the recipe
To understand return on investment of media, we need to be able to identifying and quantifying ALL key drivers of sales and revenue.
The ingredients will usually include:
The Advertising x Medium and Message
PR, Media mentions, Buzz
Pricing vs competitors
Store universe changes
Product/Range changes
Brand awareness/ perceptions
Competitor marketing
Competitor routes to market
Technological change
Seasonality
Economic change
The technique assigns a weight to each ingredient
Once the ‘recipe’ is known, we can reproduce the cake by combining the weighted ingredients

16. Calculating revenue return on investment (RROI)
We isolate and quantify drivers of sales. This chart is a very simplified illustration of that, showing the sales pattern over time broken down by the different drivers, in this case a combination so enabling calculation of Revenue return on media investment

17. Calculating revenue return on investment (RROI)
Sales £m due to spend
Spend £m
RROI
Calculating revenue return on investment (RROI)
Channel 1
£2.5
£3.0
1.20
Channel 2
£0.5
£0.5
1.00
Channel 3
£1.5
£3.0
2.00
Channel 4
£1.0
£1.5
1.50
Channel 5
£0.5
£0.6
1.20
Total
£6.0
£8.6
1.43
So excluding all other factors we can isolate the contribution of each channel to sales, take away the investment on that channel, and you get the RROI – as per this example table

18. A meta analysis of multiple econometric cakes
Meta analysis is analysis of analysis results – the “meta data”
It’s common in pharmaceuticals, clinical drugs trials
One trial isn’t enough, you need hundreds so as to be sure of your results
If all the trials come up with the same answer, that’s a very strong result
If the trial results are different, then being able to explain robustly why they are different – different dosage, different demographic sample - is again a result and new learning
Using our cake analogy – we can work out whether better tasting cakes always use butter rather than margarine in the recipe, and whether using three eggs works better than two

19. This is an example chart, not real data
Defining the relationship between spend and revenue return
Each dot on the graph represents a case in our Results Vault
Here the data suggests as the % of print newsbrands in the mix increases, so does effectiveness
Scatter graphs allow us to see relationships in data.
Here in this example chart, used for illustration, we can see the relationship between media spend and revenue return. Specifically looking at print newsbrands’ percentage of total comms spend and the revenue ROI.
Each dot on the graph represents an econometric model case in our Results Vault.
Here the data suggests as the % of print newsbrands in the mix increases, so does effectiveness
This is an example chart, not real data

20. Creating tertile groups of cases shows the revenue return for low, medium and high spend levels
In order to see the relationship more clearly, we create tertile groups of case, according to their print newsbrand spend as a % of the overall media mix. This creates robust groups, on which we can report the average Y axis score for each group - ie the average Revenue ROI
Tertiles of % of total communications spend
This is an example chart, not real data

21. 1
How effective are campaigns that use print newsbrands versus those that do not?
So on to our first question…
How effective are campaigns that use print newsbrands versus those that do not? Is it better to have print in the mix?
In each of the following charts we will look at grouping of low, medium and high spenders on print newsbrands, as well as an additional group, those spending no money in print newsbrands, and then the total campaign revenue ROI per £1 spend for each of those groups

22. Retail
£9.08
£25.18
£18.82
£18.25
Total campaign revenue ROI
Low 2-20%
Medium 20-31%
High %
Print newsbrand % of total campaign spend in retail
No print newsbrand spend
2015 spend levels
16.5%
Print newsbrands boost total campaign ROI by 2.8 times, but the category is failing to spend at optimum levels
In Retail: Print Newsbrands boost total campaign ROI by 2.8 times, with the optimum return when they are 20% to 31% of the mix. In all cases it is always better to have print newsbrands in the mix.
Source: Brand Science Results Vaults 2011 to 2015 – excludes outliers and incomplete models
Source: Benchmarketing/Brand Science Results Vaults 2011 to 2015

23. 2
What impact do print newsbrands have on the effectiveness of other media channels?
So we know then from our results that it is always best to have print newsbrands in the mix for retail brands, and we know the average levels to deliver optimum return.
This is not about comparing individual channels but rather acknowledging that most if not all campaigns are multimedia and that we need to know the role of print newsbrands in the mix.
Our second question relates to how print newsbrands boost the effectiveness of other channels within the mix.

24. Print newsbrands make TV spend work twice as hard
Combined services
£6.49
£12.22
£5.72
£10.82
Print newsbrands make TV spend work twice as hard
TV revenue ROI
Low 2-10%
Medium 10-12%
High 12-18%
Print newsbrand % of total campaign spend in combined services
No print newsbrand spend
Using the same format, comparing groups by level of spend in print newsbrands we looked at the impact on the average TV revenue ROI. For this analysis we looked at the wider combined services category to get a bigger sample of models.
The results showed that including print newsbrands in the mix make TV spend work twice as hard, doubling the average revenue per £1 spent on TV.
Source: Results Vaults 2011 to 2015 – excludes outliers and incomplete models
Source: Benchmarketing/Brand Science Results Vaults 2011 to 2015.
Combined services includes: Finance, Retail, Telecoms, Travel & Leisure, Media, Government/Social/Political, Other Services(Online & Offline)

25. No print newsbrand spend
Combined services
£12.46
£20.96
£17.42
£55.98
Print newsbrands boost online display and video by up to four times
Online display revenue ROI
No print newsbrand spend
Low 2-10%
Medium 10-12%
Print newsbrand % of total campaign spend in combined services
High 12-18%
Using the same format, comparing groups by level of spend in print newsbrands we looked at the impact on the average online display revenue ROI. For this analysis we looked at the wider combined services category to get a bigger sample of models.
The results showed that including print newsbrands in the mix makes online display spend work up to four times as hard.
Source: Results Vaults 2011 to 2015 – excludes outliers and incomplete models
Source: Benchmarketing/Brand Science Results Vaults 2011 to 2015.
Combined services includes: Finance, Retail, Telecoms, Travel & Leisure, Media, Government/Social/Political, Other Services(Online & Offline)

26. Combined services Finance
Automotive
Finance
Finance
2015 spend levels
7.9%
£4.02
£40.45
£11.34
£55.82
Radio revenue ROI
Low 2-7%
Medium 7-22%
High 22-37%
Print newsbrand % of total campaign spend in combined services
No print newsbrand spend
Combined services: print newsbrands boost radio revenue by up to 10 times
And the same is true for radio, where the inclusion of print newsbrands in the mix boosts radio revenue ROI by up to 10 times in combined services.
Combined services – radio total revenue ROI vs. print newsbrands % of spend
Source: Results Vaults 2011 to 2015 – excludes outliers and incomplete models
Source: Benchmarketing/Brand Science Results Vaults 2011 to 2015.
Combined services includes: Finance, Retail, Telecoms, Travel & Leisure, Media, Government/Social/Political, Other Services(Online & Offline)

27. 3
What proportion of the budget should be spent on print newsbrands to deliver optimum total campaign ROI?
So what we’ve shown so far is how vital print newsbrands are to both overall campaign revenue ROI, boosting it on average by 2.8 times in Retail; and also to the effectiveness of other channels, making TV spend up to two times more effective, online display up to four times and radio as much as ten times.
The final question then, using all this data, is how much should you spend on newsbrands. We know the ranges that deliver the optimum spend across the categories, but what is the sweet spot and how does that differ by budget level?

28. The data from the meta analysis allows us to build response curves for each channel and calculate the optimum split for any given budget
Revenue £m
Media investment £m 80
900
Online Display TV
Online Search
Newspapers
VOD
Outdoor
Magazines
Radio
TV Sponsorship
Cinema
Our Results Vault across the last 10 years feeds a channel planning for sales system
We analysed ROIs across data points in each category and generated average response curves
Curves that “go flat” suggest high diminishing returns and no benefits to spending, unless that curve is flat and above all others
We can take an annual budget and optimise the overall ROI for the spend, by changing the mix
It’s a simple hill-climbing optimisation that picks the highest and the slopi-est points by medium
We then use this to calculate the optimum channel split for any given budget.
Source: BrandScience channel planning sales analysis 2015

29. Print newsbrands should form a significant proportion of the mix for all budget levels in supermarket retail
Recommended % spend on print newsbrands to optimise total campaign ROI 0%
13%
22%
24%
26%
27%
21%
20%
19% 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80
Total annual campaign budget £m
In retail, we have looked at supermarkets. Here the average spend is around £40m and larger spenders are at around £80m.
The range from our tertile analysis was 20-31%. Here we can see that the sweet spot for the average spender is at 27%.
Source: BrandScience channel planning sales analysis 2015

30. Print newsbrand spend % 2015
Category
Typical spend p.a. £m
Print newsbrand spend % 2015
Print newsbrand % spend for maximum campaign effect
Retail – Supermarkets
£40m
16.5%
27%
In retail, we have looked at supermarkets. Here the average spend is around £40m and larger spenders are at around £80m.
The range from our tertile analysis was 20-31%. Here we can see that the sweet spot for the average spender is at 27%.
Source: BrandScience channel planning sales analysis 2015

31. The pendulum has swung too far for print newsbrands in retail – and advertisers are missing out
27.1%
2013
22.3%
2014
16.5%
2015
28.1%
2012
30.1%
2011
2017
2016
Source: SMI (Standard Media Index)

32. The evidence
Print newsbrands boost overall campaign ROI by three times on average 1
Print newsbrands make TV twice as effective and online display four times as effective 2 3
Spend on print newsbrands should return to 2013 levels, and can be boosted further by use of digital newsbrands
Print newsbrands have a respectable direct ROI vs other offline channels, but there is evidence across all categories that including print newsbrands in the mix improves the overall campaign ROI – by an average of THREE times
Not only that, but print newsbrands boost the ROI of other channels – they make TV twice as effective, online display four times as effective and radio between four and ten times more effective.
It is no surprise that newsbrand advertising has been in sharp decline. Our analysis shows that the exodus has been overdone, the optimal mix % for print newsbrands is closer to 2013 levels than current 2015/2016 levels – the pendulum has swung too far