Why Out-of-Home is a clever investment...Out-of-Home delivers powerful results • Out-of-Home...

OUTSMART Why Out-of-Home is

a clever investment

Introduction

Program

Econometric Methodology

Econometric Global Results

Australian Case Studies

Summary

Overview of Econometric Methodology

BrandScience – Global Econometrics

Consultancy

Return On Investment

ROI = Incremental Sales Revenue

generated for each $1 of media cost

BrandScience Results Vault

The BrandScience Results Vault is a collation of data from

over 600 econometric studies. With this, we can provide a

unique quantitative insight via meta-analysis into how

different media drive sales independently and in combination

with other media.

We are able to use these to provide learnings on how Out-of-

Home advertising works;

● relative to other media

● independently and in synergy with other media

● trends in effectiveness over time

Sales

How does BrandScience work?

Step 1 – Data Brainstorm and Collection

Identification and

collection of key data.

All data is cleaned,

aggregated,

harmonised and

transformed into

variables that can be

modelled.

How does BrandScience work?

Step 2 – Multivariate Regression Analysis

Determines which factors are

statistically significant and the

magnitude of each factor’s impact

on sales.

How does BrandScience work?

Step 3 – Model to quantify impact of each factor

• Turning results

from statistics

into marketing

insight.

• Can be used to

determine more

effective

marketing

spend.

Base level Base level

Price discount impact

TV Press

Out-of-Home

Radio Direct

Mail

S

a

l

e

s

Weeks

10

Global overview of ROI

Media Categories and Inclusions

TV • Commercials

• Pay TV and Regional

• Programme Sponsorship

PRINT

Magazines and

Newspapers

• Advertising

• Advertorials

• Inserts

RADIO • Commercials

• Promotional / Sponsorship Campaigns

ONLINE • Websites /

Content

• Banner Ads

• Sponsorship

• Competitions

CINEMA • Commercials

OUT-OF-HOME

• Billboards

• Street Furniture

• Transit

• Retail

• Airport

Global ROI across media

TV Print Radio Online Cinema Out-of-Home

Sale

s R

OI

Average % media mix

Global

Out-of-Home is highly effective in Telco

TV Print Radio Online Cinema Out-of-Home

Sale

s R

OI

Telco

Average % media mix

Out-of-Home is a standout performer in Media

TV Print Radio Online Cinema Out-of-Home

Sale

s R

OI

Media

Average % media mix

Out-of-Home supports direct response

channels for Finance

TV Print Radio Online Cinema Out-of-Home

Sale

s R

OI

Finance

Average % media mix

Out-of-Home provides strong support for

Leisure & Entertainment

TV Print Radio Online Cinema Out-of-Home

Sale

s R

OI

Leisure & Entertainment

Average % media mix

Out-of-Home is highly effective in Retail

despite under representation in budget

TV Print Radio Online Cinema Out-of-Home

Sale

s R

OI

Retail

Average % media mix

Out-of-Home performs strongly for Travel

TV Print Radio Online Cinema Out-of-Home

Sale

s R

OI

Travel

Average % media mix

FMCG Findings

Global findings show Out-of-Home is

the second most efficient media

TV Print Radio Online Cinema Out-of-Home

Sale

s R

OI

Sample Set: All FMCG Results Vault studies (2002-2009) with measured Out-of-Home ROI

Average % media mix

Out-of-Home improves ROI of other media

TV Print Radio Online

Sale

s R

OI

Without Out-of-Home With Out-of-Home

Higher Proportion of budget spend on

Out-of-Home increases ROI

Sample Set: All FMCG Results Vault studies (2002-2009) with measured Out-of-Home ROI

Low(Under 8%)

Medium(8-15%)

High(15%+)

Sale

s R

OI

In contrast, higher TV spend reduces

TV ROI

Sample Set: All FMCG Results Vault studies (2002-2009) with measured Out-of-Home ROI

Low(Under 70%)

Medium(70-85%)

High(85%+)

Sa

les

RO

I

Out-of-Home is effective and efficient

Sample Set: All FMCG Results Vault studies (2002-2009) with measured Out-of-Home ROI

2005 2006 2007 2008 2009

Sale

s R

OI

TV Print Online Out-of-Home

2nd 2nd 2nd 1st 2nd

Out-of-Home delivers powerful results

• Out-of-Home delivers a high ROI across all categories

• It is an effective and efficient media channel in its own

right

• Multiplies and expands the ROI of other media channels

• The more you spend in Out-of-Home the more it returns

versus TV where the more you spend the lower the

return

Memorable Campaigns

Out-of-Home is the second most

memorable media

• For each week after an Out-of-Home campaign 55 percent is retained on average

Sample Set: All FMCG Results Vault studies (2002-2009) with measured Out-of-Home ROI

70%

49%

35%

53% 53% 55%

TV Print Radio Online Cinema Out-of-Home

Out-of-Home extends the half life

of your campaign

6

8

13

17

0

2

4

6

8

10

12

14

16

18

20

Without Out-of-Home With Out-of-Home

Me

ssag

e h

alf

life

(D

ays)

Online TVC

30% longer

Sample Set: All FMCG Results Vault studies (2002-2009) with measured Out-of-Home ROI

• Using Out-of-Home in combination with other media

arrests the decay rates of a campaign

• This works particularly well for TV and online

campaigns where we see a 30% increase in the half life

Out-of-Home delivers memorable

campaigns

Out-of-Home

part of our everyday lives

weekdays and weekends

as we travel as we socialise

as we run errands as we work

as we shop

day and night

31

32

Combining econometric modelling with MOVE

– what do we see?

New Product Development

Australian Case Studies

Australian Case Study:

New Product Development

Background:

• An established brand

• New range launch in an expanding market

• Creative goal to distinguish the brand from others

Campaign:

• Multi-media approach – TV, Out-of-Home and online

• Three week top heavy TVC followed one week later by

two week Out-of-Home and online element

0

200

400

600

800

1000

1200

TV Out-of-Home

Australian Case Study:

New Product Development

Campaign Delivery:

0

10

20

30

40

50

60

70

80

TV Out-of-Home

Budget ($000s) Audience Reach (%)

Source: Oztam and MOVE

Australian Case Study:

New Product Development

Econometric results:

• Out-of Home delivered much greater reach efficiency

than TV

• Out-of-Home delivered ROI two times greater than TV

• Synergies between the TVC, Out-of-Home and online

campaigns increased the overall campaign ROI

• The multi-media platform established for this launch

resulted in the brand going on to perform as a leader in

its market

Spend Diversification

Australian Case Studies

Australian Case Study:

Spend Diversification

Background:

• Historically brand had used 100% TV to drive sales

• Found diminishing returns when TV expenditure goes

above $2m

Australian Case Study:

Spend Diversification

Actual

Response

Australian Case Study:

Spend Diversification

Campaign:

• Shifted 20% of spend to Out-of-Home and radio in the

second year

Year 1 100% TV

Year 2 80% TV

20% Out-of-Home + radio

2

2.1

2.2

2.3

2.4

2.5

2.6

2.7

Year 1 (100% TV) Year 2 (80% TV)

Sale

s R

OI

Australian Case Study:

Spend Diversification

Campaign Delivery:

+11%

$2.40 $2.67

Australian Case Study:

Spend Diversification

Econometric results:

• Spend diversification generated additional sales

• Moving 20% of funds out of TV into Out-of-Home and

radio produced a large increase in the overall Sales ROI

Out-of-Home Synergy

Australian Case Studies

Australian Case Study:

Out-of-Home Synergy

Background:

• Launch of new line extension

• Significant spend allocated to drive high awareness

Campaign:

• Multi-media campaign with strong synergies

• Out-of-Home used from start along with TV and online

Australian Case Study:

Out-of-Home Synergy

Campaign Delivery:

0

200

400

600

800

1000

1200

1400

1600

1800

2000

TV Out-of-Home

0

10

20

30

40

50

60

70

80

90

TV Out-of-Home

Budget ($000s) Audience Reach (%)

Source: Oztam and MOVE

Australian Case Study:

Out-of-Home Synergy

Campaign Delivery:

TV Print Radio Online Cinema Out-of-Home

Sale

s R

OI

Average % media mix

Australian Case Study:

Out-of-Home Synergy

Econometric results:

• Out-of-Home provided very good support to the TVC

during the launch

• Out-of-Home worked in 3 key ways to provide strong

payback for the client;

1. Strong direct ROI

2. Increased the memory of the TVC

3. This Out-of-Home/TV synergy accounted for 10% of

the TVC ROI

48

UV Tripleguard’s case

for avoiding the sea of sameness

49

Recency Research –

The Last Window of Influence

79%76%

53% 51%48%

43%40%

4% 3%8%

4% 2%

% Recall % Recall 30 mins

Source: Helen Harrison Associates, July 2011, 604 intercept shopper interviews, 4 UK

locations

Any Ad Recall vs 30 mins Ad Recall by

Media ‘The Last Window of Influence’ All Shoppers

88%

10% 6%

18%8% 5%

Outdoor TV Newspaper Radio Internet Magazines

Base: All aware any advertising any media last 30 mins (274)

30 mins Ad Recall by Media

‘The Last Window of Influence’

INDEX vs. All Shoppers

Mobile phone / telecom stores 112

Banks / building society 111

Fast Food outlet 111

News agent / convenience store 110

Fashion/clothes shops 98

Supermarket 97

Chemist 91

Travel Agents 85

Base: Outdoor Ad Aware 30 mins (240)

The Outdoor Ad Aware 30 minutes

Shopper - Likelihood to Visit Retailers

Retail Visitors – Outdoor in last window of

Influence has potential to be highly effective % More likely to find out more

about a brand having seen

Outdoor in past 30 mins

% More likely to buy

having seen Outdoor in

past 30 mins

Chemist 81% 56%

Newsagent / convenience store 75% 55%

Mobile phone / telecom stores 74% 71%

Fashion/clothes shops 69% 62%

Fast Food outlet 69% 51%

Supermarket 68% 60%

Banks / building society 67% 65%

All Shoppers

(604)

16-44

(366)

Men

(294)

Women

(310)

I usually plan in advance everything I want to buy and only buy things on my list

13% 9% 17% 8%

I sometimes make unplanned purchases but mostly stick to my shopping list

29% 26% 28% 30%

I often buy something that's not on my shopping list

18% 21% 16% 20%

I usually don’t make a shopping list or plan, and just buy spontaneously

39% 43% 37% 41%

Attitudes to Shopping: only 13% not

susceptible to last window of influence

• Outdoor is the key medium to reach shoppers in the 30

mins prior to purchase. 40% of shoppers see outdoor in

the last window of influence. Next highest is radio with

8%

• Outdoor dominates ad exposure in last 30 minutes,

reaching 88% of those exposed to any ad

• Only 13% of adults not susceptible to last minute

influence, and only 8% of women and 9% of 16-44’s

• Awareness of outdoor advertising during this pre

purchase period increases the likelihood to find out

more about a product and to buy a product

Summary – Outdoor Key Points

Summary

"I know that half of our advertising is

wasted. The trouble is that I don't know

which half.”

Lord Leverhulme

Key take outs

1. Out-of-Home delivers ROI and

memory as a stand-alone medium and a media multiplier

2. The higher the budget spend on

Out-of-Home the larger the return on investment

Questions

Questions

Questions

Appendix

Measuring media impact with

diminishing return ● To take into account the longer memory of advertising campaign, media variables are adstocked.

● i.e. TARPs with the following pattern

● are included in the model as continuous series similar to the one below

● The exact shape of selected time series depends on the retention rate. To calculate this we test models

with a variety of retention rates to see which best fits the memory of a given campaign. This gives up the

longevity of all advertising campaigns.

The half life explains the gradual decay of memory until the advertising

impact is half that of the initial impact.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

% C

arr

yo

ve

r

0.3

0.4

0.5

0.6

With the retention rates of advertising we can estimate the half life

of the campaigns.

HALF LIFE

4 Days

6 Days

7 Days

10 Days

DAYS

Production costs are included in outdoor

ROI calculation but not other channels.

• An approximate average outdoor production cost is 10 percent.

• This tends to be included into the calculation of the ROI.

• However for other media channels such as TVC the production cost is excluded from the calculation. As a

rough guide these are generally between 5 to 10 percent of total costs.

• By estimating ROI with and without these costs at a global scale the ROI’s for outdoor and TVC change

accordingly: With production

costs Without

production costs

Outdoor 1.41 1.55

With production costs

Without production costs

TVC 1.19 - 1.26 1.32

• By accounting for production costs in both TVC and outdoor in the global results we see outdoor becomes

10 to 15 percent more efficient than TVC; increased from the earlier calculation of 6 percent.

Extra costs often excluded in ROI calculation include licensing fees, insurance fees,

creative and production costs.

Global FMCG

results

OUTSMART Why Out-of-Home is

a clever investment