CPG-Industry Benchmarks for Advertising Return Across Media [REPORT]

The study by Nielsen Catalina Solutions generated benchmarks that allow marketers to compare the return they should expect from every dollar of their cross-media, digital video, display, linear TV and magazine advertising spending. In its analysis, NCS worked with The Advertising Research Foundation, CBS Corporation, Meredith Corporation, Sequent Partners and a prominent technology and display advertising company.

To understand the average return on advertising spend (ROAS) and sales productivity metrics across media type, NCS, over the course of eleven years (from 2004-2015), analyzed nearly 1,400 campaigns across 450 brands from seven popular categories: baby, pet, health and beauty, general merchandise, food, beverage and over-the-counter (OTC). The NCS dataset integrates 90 million households of in-store purchase data, a subset of Catalina’s data warehouse, with each of the media platforms in a single source to determine the incremental sales impact of advertising.

“The insights we’ve uncovered by comparing ROAS and incremental sales across media types are invaluable,” said Leslie Wood, Chief Research Officer, Nielsen Catalina Solutions. “While there is no ‘best’ media, and choices should be driven by strategy and message, advertisers can leverage this data to inform their media decisions.”

Data was analyzed many different ways to determine not only the key metrics, but what factors drive sales, such as the size of the brand, brand equity, purchase frequency, etc. As discovered in the study, most brands can be grouped into three categories: Marquee (bigger brands, shorter purchase cycle), Mid-sized, and Infrequent Use (longer purchase cycle and fixed-level of purchasing across time), which will greatly impact their expected return. These benchmarks will help CPG brands understand how their metrics stack up to CPG industry norms and benchmarks.

Select Benchmarks

•     Magazines show the highest Return on Advertising Spend (ROAS), with an average return of $3.94 for every dollar spent on advertising. Display follows at $2.63. Unlike the other benchmarks presented, ROAS is impacted by the cost of the media.
•     Linear TV advertising drives the highest incremental sales per exposed household at $.33. This is followed by magazine, digital video and mobile, which are separated by only three cents.
•     Mobile drives the highest incremental sales per thousand impressions, at $26.52. Digital video follows at $23.48 and linear TV at $20.56.
•     Category matters. Expensive, frequently purchased items – like baby and pet products – have a higher ROAS than items from less expensive categories like food and beverage.
•     The Marquee Brand Cluster (bigger brands, shorter purchase cycle) has a higher overall ROAS and incremental sales per exposed household, and confirms that size of brand and frequency of purchase is a more discriminating factor than the product category.
•     Creative type also plays a part in ROAS; promotional campaigns garner the highest return and campaigns featuring a recipe garner the lowest.

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