Media Management

Analysis shows $45bn in global profit up for grabs for brands that optimize ad budgets

Dramatically Improve Results

“Pull Quote”

The study has shown that advertisers who gain a deeper understanding of their marketing budget allocation will harness the potential to improve their marketing performance and ROI.

In October 2018 Ebiquity published a piece of research showing that better allocation of marketing spend could result in approximately $45bn more profit globally for brands each year.

The research compares spending against allocation data to reveal insights into how marketers could be distributing their advertising budgets more optimally to generate growth in bottom-line profitability. This identifies a clear opportunity for advertisers everywhere to increase their marketing performance and improve return on investment.

The study analysed roughly 2,500 campaigns over three years, and was regionally weighted in order to build a global number. The focus was on channels where Ebiquity could study the profit impact at different spend levels, with total media investment analysed representing $375bn in global ad spend, or roughly 76% of the total global advertising market. Had that same spend been optimised based on the ROI contributions of each channel, it would have generated an extra $45bn in global profits for brands.

The study shows a breakdown of media allocation in the market against potential patterns of distribution to show the possible improvement of their advertising reach. This research builds on the Radiocentre and Thinkbox report findings into the allocation of budget spend against media channels, but this is the first time that a single global figure has been calculated. The analysis focuses on channel mix as opposed to other factors that are causing loss to advertisers, such as ad fraud, viewability, bot traffic, and other non-working media costs.

The analysis focused on channels within Ebiquity’s database where they both have enough data, and where they can robustly arrive at a model of optimal spend levels across each channel studied. The dynamics of some channels mean Ebiquity are not able to calculate these relationships (e.g. Search), and as a result, this study focuses on TV, Radio, Press, Out of Home (OOH), Digital Display, and Digital Video (including broadcaster Video on Demand and other internet Video on Demand, such as YouTube).

The study has shown that advertisers who gain a deeper understanding of their marketing budget allocation will harness the potential to improve their marketing performance and ROI.

Ebiquity, whose team conducted the research in-house, noted that the research shows that brands could be delivering much more from their advertising investments. The report highlights that with proper measurement and analytics, marketers can re-evaluate their spend allocation to dramatically improve results.

The report also highlights that as media, content, and customer experience options proliferate, brands fundamentally need to know what works well for them and what doesn’t. The study is an important reminder that marketing spend still has a positive bottom-line impact and should be treated as an investment, not as a cost.

The study is available to download HERE, and is also available in the following languages: German, Italian, Spanish and French.