Accountability: A Guide to Measuring ROI and ROO Across Media

By Magazine Publishers of America

Magazines

"In addition to highlighting the impact of magazine advertising, this report is a very good introduction to how advertising works and how to measure the impact of advertising on common business metrics."

Year: 2005

Type of Promotional Material/Activity Tested: Marketing media mix effectiveness with a focus on magazine advertising.

Methodology: A compilation of top-line synopses of research and data from researchers and industry sources.

Metrics: Return on objective (e.g., sales, lead generation) and return on investment.

Top Line Results:

Under the “lessons learned” section of this report, three studies were highlighted:

Study #1:  “Measuring the Mix,” conducted by Marketing Management Analytics (2002) analyzed the effect of changing the media mix of 140 brands over time. Findings:

• Brands that spent a higher amount of their marketing on advertising experienced a ten fold greater return on their overall marketing investment.
  
  

• The least effective brands were those with a lop-sided marketing mix -- e.g., placing 80% of their ad dollars into TV ads with the remainder to magazine and radio. The most effective brands success came as the result of a balanced mix of magazine, TV, and radio advertising.
   

• Brands that over time changed their marketing mix and shifted just 5% of their ad budget from TV to magazines more than doubled their ROI.
  
  

• The greater the scheduling overlaps between magazine and TV ads the greater their effectiveness. Considerable schedule overlap increased sales approximately 50% more than minimal overlap, and three times greater than no overlap.
   

Study #2:  “What Drives Automotive Sales,” conducted by Hudson River Group (2002) examined advertising returns for three brands of cars. Findings:

• When media saturation occurs, reallocating advertising dollars to another medium results in improved sales. For example, money spent on TV advertising “often exceeds” the point of diminishing returns yet magazine ads rarely result in saturation. Simply reallocating “wasted” TV dollars into magazines resulted in a 12% ROI.

Study #3:  Dynamic Logics “CrossMedia Research,” (2004) tracked the distinct role magazines, TV and Internet ads each played in the various points of the purchasing process. Findings:

• Magazines outrivaled TV and Internet ads  in increasing purchasing consideration.
  
  

• Magazines led the way in influencing brand favorability, more than doubling TV’s influence over this stage.
  
  

• Magazines and TV played nearly an equal role in brand and ad awareness:

Take Away: In addition to highlighting the impact of magazine advertising, this report is a very good introduction to how advertising works and how to measure the impact of advertising on common business metrics.  It also provides a good explanation of the statistical technique called predictive modeling.

Complexity rating of source: 1  (Complex statistical analysis scale: 1= none, 2= moderate, 3 = difficult)

Source: MPA, Accountability: A Guide to Measuring ROI and ROO Across Media