Newsworks has today published a study to help media planners make more informed decisions and boost the profit return on investment (PROI) made in newsbrands, both in print and digital.
The research, Planning for Profit, shows that increasing the share of budget in print to what is described as an “optimum level” would more than double current campaign PROI.
Meanwhile, boosting investment in digital newsbrands would result in higher profit levels, up to as much as £300 million.
The study, which fits with recent reports from Radiocentre and Thinkbox, is based on a meta-analysis of previous econometric work, carried out by the consultancy Benchmarketing.
It is also the first time digital newsbrands have been separated out from general online display, giving a clearer picture of the effectiveness of both print and digital newsbrands.
Additionally, the authors have been able to model across different sectors, allowing media planners to fine-tune budget spend accordingly.
For supermarkets, for example, the report states that profits could be increased by 60% if spend in print newsbrands was raised by a minimum of four and up to 11 percentage points.
For digital newsbrands, allocating a 2.1% share of budget is recommended as a minimum to optimise PROI.
Meanwhile, finance clients are missing out on £264m potential profit by underinvesting in print and digital newsbrands.
For maximum profit return, the average recommendation for print newsbrands’ share is 11.9% of overall campaign spend (compared to the current 7.2%), while for digital newsbrands it stands at 5.6% (compared to the current 4.1%).
Commenting on the study, Philippa Brown, chief executive, Omnicom Media Group, which owns Benchmarketing, said what is so encouraging about the work is that it proves that premium environments are “primed to deliver” business returns for advertisers if utilised at the right level.
“This should serve as compelling evidence for advertisers that are looking to both boost profits and safeguard their brands via relevant and appropriate placement,” she said.
Meanwhile, Vanessa Clifford, CEO, Newsworks, commented: “The vast majority of UK advertisers will be able to use the results of this new study to see how individual categories are performing and how to rebalance ad budgets to achieve full profit potential across a range of media.”
Methodology
The study comprised a meta-analysis of the data from 684 econometric models built between 2011 and 2017.
The missing profit is calculated first by examining the current percentage of budget delivered to newsbrands and the resulting profit return on investment (PROI).
Benchmarketing then calculated the “optimum percentage” of budget to be allocated to newsbrands in order to maximise profitability from advertising spend, and by comparing this with the actual budget delivered, it estimates the profit lost as a result of sub-optimal media allocation.
