NEW YORK—Nielsen’s first-ever ROI Report has found that about half of marketers are not spending enough to get maximum return on investment (ROI).
While a poor ROI might cause brands to pull back on spending, Nielsen found that the ad spend often needs to be higher to break through and drive returns. It also found that ROI can be improved 50% with the ideal budget.
"Nielsen's 2022 ROI Report serves as a guide for brands, agencies and publishers,” said Imran Hirani, vice president, media and advertiser analytics, Nielsen. “In a time when there are more channels than ever to reach desired audiences, it's critical that insights on ROI are attainable and easy to understand. Brands can't afford to waste valuable ads on the wrong audiences. By investing wisely and having a balanced strategy of both upper-funnel and lower-funnel initiatives, brands can reach the right audiences and maximize their ROI."
The report focuses on gaps in marketers' budgets, channels and media strategies that are compromising returns on investment (ROI) on media plans. It also provides extensive data and insights on what drives returns on ad spends, how to measure the returns, and how to improve on the metrics brands already have, with content unique to advertiser, agency and publisher audiences.
Other key insights from the report include:
- Full funnel marketing: It is rare for channels to deliver above-average returns for both brand and sales outcomes, with 36% of media channels faring above average on both revenue and brand metrics. To grow ROI, brands should pursue a balanced strategy for both upper and lower funnel initiatives. Nielsen found that adding upper-funnel marketing to existing lower- and mid-funnel marketing can grow overall ROI by 13-70%.
- Emerging media: It is difficult for brands to spend big amounts without proof that the new media works, but spending small amounts can make it hard to see if the media is working. Nielsen found that podcast ads, influencer marketing and branded content can deliver over 70% in aided brand recall, and that influencer marketing ROI is comparable to ROI from mainstream media.
- Ad sales growth strategy: Ultimately, ROI will inform publisher pricing power. Publishers are not just competing against others in their channel, but also against other channels, so comparing channel ROIs can help set pricing strategy. The ROI Report uncovered that social media delivers 1.7x the ROI of TV, yet social gets less than one-third of TV ad budgets.
- Audience measurement: Campaigns with strong on-target reach deliver better sales outcomes. However, only 63% of ads across desktop and mobile are on-target for age and gender in the U.S., meaning that on the channels with the most exhaustive data coverage and quality, over one-third of ad spend is off-target. To capitalize on opportunity and drive impact, advertisers should prioritize measurement solutions that cover all platforms and devices, with near-real time insights.
This is the first ROI Report produced by Nielsen. The ROI Report findings were generated by Nielsen using a wide range of measurement methods including Marketing Mix Models, Brand Impact studies, marketing plans and expenditure data, attribution studies, and Ad Ratings collected in recent years, the company said.
The full report can be downloaded here.
