1. Findings on the effectiveness of Outdoor
advertising from Econometric studies
conducted by BrandScience
- Retailers (and highlights from FMCG study)
21 September 2009

2. Agenda
Background & Objectives
Overview of the BrandScience Results Vault
Highlights from the FMCG study
Results of the Retailer Meta analysis
Summary and Conclusions
2

3. Retailer Meta Analysis: Key questions to be answered
Question
answered
How effective is Outdoor advertising for Retailers?
How does the efficiency of Outdoor compare with other media?
How does the efficiency of Outdoor advertising change at different levels
of spend?
How does Outdoor advertising impact on the performance of other media
channels?
Is Outdoor advertising becoming more or less efficient over time?
What are the implications for budget allocation by media?
3

4. Agenda
Background & Objectives
Overview of the BrandScience Results Vault
Highlights from the FMCG study
Results of the Retailer Meta analysis
Summary and Conclusions
4

5. BrandScience Results Vault
• The BrandScience Results Vault collates data from over 400
econometric studies conducted by BrandScience to provide a unique
insight into how different media drive sales independently, and in
combination with other media.
• The Results Vault contains:
– 71 Retail studies
– 57 of the Retail studies have Outdoor advertising spend
– 34 of the Retail studies have a measured Outdoor effect
• The Results Vault allows for detailed examination of media performance
by channel and sector and contains lots of findings on how Outdoor
advertising works:
. Absolutely
. Relative to and in synergy with other media
. Over time
• Partly due to poor data quality, the impact of Outdoor could not be
measured in 40% of studies. The comparable figure is 4% of studies for
TV and 10% for Print
5

6. Retailer ATL Media Mix:
Studies in the BrandScience Results Vault are fairly representative of the
UK: Outdoor makes up 9% of ATL media spend for Retailers in the Results
Vault compared to the UK Norm of 6%
BrandScience Results Vault*: Nielsen Media Research
ALL Retail Studies Top 100 UK Retailers
The average retailer in the
The average UK retailer
BrandScience Results Vault
spends £6.4m pa on ATL
spends £5m pa on ATL
advertising with this media split
advertising with this media split
6
*Sample Set: Retail Results Vault studies as at 15th May 2009

7. Retailer TOTAL Media Mix:
Studies in the BrandScience Results Vault are fairly representative of the
UK: Outdoor makes up 6% of total media spend for Retailers in the Results
Vault compared to the UK Norm of 5%
BrandScience Results Vault*: Nielsen Media Research
ALL Retail Studies Top 100 UK Retailers
The average retailer in the
The average UK retailer
BrandScience Results Vault
spends £7.5m pa on advertising
spends £7.1m pa on advertising
with this media split
with this media split
7
*Sample Set: Retail Results Vault studies as at 15th May 2009

8. What types of Retail clients are we studying?
• 57 of the 71 retailers spend on outdoor
• The majority of the cases are UK firms with 80% being top 5 in their
category
8

9. Agenda
Background & Objectives
Overview of the BrandScience Results Vault
Highlights from the FMCG study
Results of the Retailer Meta analysis
Summary and Conclusions
9

10. Recap: How effective is Outdoor
advertising for FMCG brands?
10

11. FMCG: TV is only 5% more efficient than Outdoor advertising
11
Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI

12. FMCG: If production costs are included, Outdoor becomes the most
efficient medium
12
Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI

13. FMCG Results Vault
How does ROI vary according
to proportion of outdoor spend?
13

14. FMCG: Outdoor ROI increases with proportion of spend
14
Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI

15. FMCG: Increasing share of spend on Outdoor boosts the ROI on
other main media
15
Sample Set: All Results Vault studies (2002 -2008) with measured Outdoor RROI

16. FMCG Results Vault
Carryover rates – the medium
term effect of media spend.
By proportion of outdoor spend
16

17. Higher Outdoor spend drives higher carryover rates (lagged effect
of advertising). 1) For Outdoor 2) for TV
17
Sample Set: All FMCG Results Vault studies (2002 -2008) with measured Outdoor RROI

18. FMCG Results Vault
ROI trends over time by medium
Our models categorised by year
of evaluated campaign
18

19. Outdoor is becoming more efficient, whereas TV is becoming less
efficient
19
Sample Set: All FMCG Results Vault studies (2002 -2008)

20. Given different ROIs by
medium and changes in
ROI over time, FMCG
advertisers should increase
their share of spend on
outdoor
20

21. Outdoor optimal share of spend should be 16%
We can apply ROI by medium by year figures to determine optimal media
split for the average FMCG brand
21

22. Agenda
Background & Objectives
Overview of the BrandScience Results Vault
Highlights from the FMCG study
Results of the Retailer Meta analysis
Summary and Conclusions
22

23. How effective is Outdoor
advertising for Retailers?
23

24. Outdoor performs just as well as TV and both media are second only to
Print
Incremental
Sales revenue
generated for
each £1 of
media cost
24
Sample Set: Retail Results Vault studies as at 15th May 2009

25. RROI calculations are often based on media space costs and
exclude production costs which can be a sizeable percentage of
total ad spend
TV production costs make up for a larger share of spend than any other
medium
ATL Media Production Costs as a
percentage of
media/production total
TV 14.4%
Print 8.1%
Outdoor 7.8%
Internet 7.6%
Radio 7%
Incorporating production costs into the RROI calculation changes the
ranking of the media channels
25
Source: WARC

26. RROI calculations are based solely on media space costs and
exclude production costs - which can be a sizeable percentage
of total spend
Incremental
Sales revenue
generated for
each £1 of
media and
production
cost
26
Sample Set: Retail Results Vault studies as at 15th May 2009

27. The Print, DM and Radio RROIs are far higher when Outdoor is
used
+34%
+84%
+61%
27
Sample Set: Retail Results Vault studies as at 15th May 2009

28. How does the efficiency of
Outdoor advertising change at
different levels of spend?
28

29. Outdoor RROI increases slightly as spend increases, implying
there is room for retailers to increase their share of spend on
Outdoor
+22%
29
Sample Set: Retail Results Vault studies as at 15th May 2009

30. Outdoor Carryover rate increases significantly as spend
increases, implying there is room for retailers to increase their
share of spend on Outdoor
+145%
30
Sample Set: Retail Results Vault studies as at 15th May 2009

31. “Life”of campaign vs. Outdoor spend
+131%
Based on time taken for advertising to have 95% of its “total” effect
31
Sample Set: Retail Results Vault studies as at 15th May 2009

32. How does Outdoor advertising
impact on the efficiency of other
media channels?
32

33. Increased spend on Outdoor boosts the RROI on TV and Print
+19% +28%
33
Sample Set: Retail Results Vault studies as at 15th May 2009

34. Higher spend on Outdoor is associated with a higher carryover
rate on TV and Print
+18% +50%
34
Sample Set: Retail Results Vault studies as at 15th May 2009

35. Higher Outdoor spend elongates the life of TV and Print
campaigns
+30% +62%
Based on time taken for advertising to have 95% of its “total” effect
35
Sample Set: Retail Results Vault studies as at 15th May 2009

36. Is Outdoor advertising
becoming more or less efficient
over time?
36

37. Trends in RROI over time: 1) Major Media vs Outdoor
*Two year moving average
37
Sample Set: Retail Results Vault studies as at 15th May 2009

38. Trends in RROI over time: 2) Support Media vs Outdoor
*Two year moving average
38
Sample Set: Retail Results Vault studies as at 15th May 2009

39. What are the implications for
budget allocation by media?
39

40. The Retailer category includes brands with very disparate media
strategies.
By calculating diminishing returns curves and projecting trends
in ROI over time, we suggest that overall Outdoor investment
should increase, and on average should be doubled.
Television, radio and cinema should be reduced.
40

41. Agenda
Background & Objectives
Overview of the BrandScience Results Vault
Highlights from the FMCG study
Results of the Retailer Meta Analysis
Summary and Conclusions
41

42. Summary of findings for Retailers and FMCG study
Outdoor delivers High ROI for both FMCG brands and Retailers
When production costs are taken into account, Outdoor
outperforms TV by 3% for FMCG brands & by 8% for Retailers.
Above average Outdoor spend increases the medium term/brand
effect of Outdoor AND TV
Outdoor ROIs are increasing over time whereas TV is decreasing
42

43. Findings on the effectiveness of Outdoor
advertising from Econometric studies
conducted by BrandScience
Retailers and highlights from FMCG study
21 September 2009