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Market Voice 30 Sep 2019 - 5 min read

Out of Home and ROI: You’re missing the bigger picture

By Bruce Mundell - Group Director - Customer Strategy, oOh! Media
Out of Home and ROI: You’re missing the bigger picture

Without TV and Out of Home advertising to perform the heavy lifting, digital campaign effectiveness is halved: return on investment can fall by 50 per cent. 

That is the key finding of an independent study based on $9bn of Australian marketing spend by 140 brands across 350 campaigns.

A second crucial finding is that sticking a TV still on a billboard is a waste of money: Creative and copy represents around 40 per cent of Out of Home ROI, underlining the need for creative, planning and buying to align.

Anything less is misspent marketing budget.

The evidence

ROI 3.0: The foundations of market mix success by Analytic Partners builds on earlier studies conducted for oOh!media by The Leading Edge.

The $9bn Australian dataset, collected since 2006, is a subsection of the research firm’s global data, which captures measurements from hundreds of billions of dollars in marketing spend across 22,000 studies.

The Australian dataset applies marketing mix modelling to determine how different marketing elements and executions deliver specific outcomes.

The econometric modelling used for the latest study is based on a minimum of three year’s worth of weekly sales data.

It wraps in all available marketing data, including price, distribution, advertising, competitor activity and sales - and overlays environmental factors such as weather, the economy and seasonality.

The outcome is quantifiable impact of any given activity on sales so that the effect of individual activities can be mathematically isolated.

In other words, ultra-granular cause and effect.

Synergy > Binary

The study’s findings should remind Australian marketers and the media industry that there is no room for partisan debate on channel efficacy, says Paul Sinkinson, head of Australian operations at Analytic Partners.

Synergy, he says, equals value.

“There has been a lot of work by industry associations that tends to talk up their particular medium. That has encouraged discussions that are binary,” he says.

“But the world is not binary, there is only grey. Optimal marketing mix is critical.”

Analytic Partners’ data finds “incredibly high ROI for digital activity when there is TV and/or Out of Home in the campaign,” says Sinkinson. “But without TV or Out of Home, you are wasting your chance to get the best digital returns, they work in combination. You have to have that mix.”


ROI Strategy Comparison


Creativity wins

Creative synergy is equally important, suggests Sinkinson, given the huge impact of creative and copy on ROI.

“Creative synergy is often terrible,” he says. “A TVC slapped onto a billboard, or a TVC pushed into a digital channel, or cut from 15 seconds to six seconds instead of being made specific to six seconds, is not going to work.

“Creative and media placement synergy are massive.”

Sinkinson believes the study’s findings underline the need to de-silo in-house and agency teams.

“Many clients have a digital team and a media team, or within agencies there is a digital strategist and a digital buyer. So the very way that companies are set up prevents synergy,” Sinkinson suggests.

He says even where clients try to align disciplines, a single integrated strategy will always deliver better results than two teams working together with slightly different strategies.

Granular planning

Bruce Mundell, group director of customer strategy at oOh!media, hopes the study’s finding that creative and copy are responsible for 41 per cent of ROI will help clients justify greater emphasis on Out of Home creative execution.

He cites IAG’s NRMA regional road safety billboards as a ‘gold standard’ of contextually relevant classic Out of Home.

“As you arrive in each town, they have beautiful aboriginal art from the local community and the original name of that aboriginal land. It’s all localised and on a long, regional drive, you will see and appreciate that creative throughout your journey,” says Mundell.

“That is a fabulous use of the medium that matches top of the funnel marketing and creative because they have put thought and time into each and every one of those billboards.”

Rethink audiences

Planning billboard by billboard may seem a lot of effort, but Mundell says harnessing sharper audience data can unlock significant reward. He suggests shifting from traditional demographics to purchase- and exposure-based targeting is moving the needle for marketers.

A traditional demographic approach can end up delivering “around 70 per cent wastage,” according to Mundell. He says the firm’s relationship with Quantium enables advertisers to target using ‘buyergraphics’ which oOh! has overlaid with exposure data to better understand the flow of relevant audiences through its locations.

“When you have an understanding of different audience segments, how likely they are to be going past their location versus the rest of the population, that combination enables some really smart targeting,” says Mundell.

“We’ve been using this data for the last 18-months and around 150 clients have used it as part of our final product development.”

Mundell says the crux of its intelligence proposition is “smarter use of data to identify more transactional audiences and then harnessing exposure data to optimise Out of Home location and environment mix. This approach means we generate the highest 1+ reach for our advertising partners”.

He hopes the demonstrable positive return on investment outlined in Analytic Partners study will lead marketers to rethink their Out of Home advertising strategies, reduce budget waste - and enjoy growth they will otherwise miss.

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