Article

Lindsay Parry
Lindsay Parry 17 August 2021

Nail Your Media Investment

Lindsay Parry, Managing Director Nepa UK and Kalle Backlund, R&D and Head of MMM at Nepa, explain how brands can maximise their marketing ROI by translating insights into action.

Identifying the ROI of your media marketing investments isn’t always the simplest task.

But it is essential if you want to look back and prove what works and what doesn’t and plan your efforts accordingly to maximise sales. Assessing the strength of each individual media channel allows marketeers to maximise their marketing ROI and focus on investments that matter.

This is not news, but at Nepa, we use our Media Mix Modelling + (MMM+) to assess the ROI of all media investment including social, allowing brands to make decisions around budgets for every media, execution, campaign duration and creative.

Look at social media advertising.

We know that advertising on social media is often thought of as a channel used to drive short-term sales. But our research has revealed clear evidence that social media drives long-term sales as well.

We based our research on over 1600 retail social media campaigns, along with unique, direct access to data from Google, Facebook and Snapchat and offline media channels. It has shown us that social is not only on average the second most efficient media type for driving short-term sales, but also the most efficient for driving long-term, brand building sales.

Although the power of social media is clear, the advertising investment on this channel is still low when we compare it to other media. MMM+ shows that retailers, for example, allocate on average only 6% of media budget and 18% of digital media budget to social media advertising.

We’ve found that if retailers are serious about driving both short and long-term sales, there is a lot to win from increasing their social media spend, for many of them by up to +30%.

It is important, however, to remember that each brand will have unique product ranges, unique marketing plans with unique creative executions, brand perceptions and media plans. That’s why the Media Mix Model must be tailored to fit each brand.

There is no ‘one size fits all’ solution – each model must be custom-designed. This is particularly true when deciphering the long-term effect of media investments on sales. Long-term effects have been the holy grail of Media Mix Models for a long time, and for good reason: it’s difficult to get it right.

Factoring in both short- and long-term media effects, as well as the effect of brand equity is essential to get the full picture. If brands use this knowledge to optimise their marketing mix and investments, they will have countless opportunities to grow their brand strength, not only through social media advertising but across the whole range of media.

Our MMM database covers a wide variety of industries including retail, FMCG, telecom, online marketplaces and professional services. It shows which media channels are the strongest in driving brand and long-term sales effects across a wide range of categories, and the data emphasizes the need for brand-bespoke analyses.

The strongest driver of long-term effects may be social media or YouTube advertising in one case, digital display marketing in another, or traditional media channels such as TV or print advertising in yet another brand and industry.

The overarching factor to remember is that in order to identify the long-term effect of media, a data-driven approach must be taken. Only then can insight be translated into action. Investing in strategic analysis will help you realise the potential of each media and will make your money work much harder for you.

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