Welcome to the Wheelhouse, a series of blogs from Ebiquity’s Marketing Effectiveness team.
In this edition of the Wheelhouse blog from Ebiquity’s Marketing Effectiveness team, Inés Miranda – Director at Ebiquity Iberia – presents new research data that show how out of home (OOH) media can provide a significant, incremental boost to other media channels. This is particularly important in the current challenging trading conditions and in an environment of almost constant innovation driven by technology.
A tough market undergoing constant change
The current economic outlook is not at all encouraging in many markets, with inflation rates at historic highs. In this context, for many brands the first item at risk of budget cuts is advertising spend. Yet while it may be tempting to reduce investment here to save money short-term, this strategy can have longer-term negative effects on brand health and business growth.
At the same time, the advertising landscape is undergoing changes in both formats and channels, as well as in brands’ strategies. The market is experiencing a sustained period of constant and complicated renewal caused by the need to adapt to and integrate rapid technological developments.
In this dynamic period of flux, the objectives of advertising remain the same: to reach as many of a brand’s target audience as possible in the most efficient way. To achieve this, progressive advertisers are looking for new approaches, but what is clear is that not everything works, nor is there a one-size-fits-all approach that brands can adopt off-the-shelf.
Cutting traditional media spend doesn’t always make sense
There is a tendency to reduce investments in traditional media – which are more generalist and linked to long-term brand building – and at the same time to invest in more performance media with short-term impact; media where customer segmentation is facilitated.
Yet the key to a successful marketing strategy lies in finding the right balance between short term, long term, and their synergies. It’s only by understanding investment as a whole that we can establish efficient strategies, finding that equilibrium between branding and performance.
Follow the data
At Ebiquity Iberia, we recently conducted a study at the request of Clear Channel to understand the impact of branding versus performance media in two sectors from before to after Covid, 2019-2021, with a particular focus on OOH. The sectors we focused on were automotive, which relies heavily on OOH, and FMCG, which uses OOH least.
In this study, we concluded that cutting investment in brand building media negatively impacts total ROI of media. As shown in Figure 1., we observed that an 11% point drop in investment in the media that generate brand awareness – media that also help build and maintain brands’ base sales – slashed overall advertising performance, with a 55% drop in total ROI.
Figure 1. The impact of cutting brand building media on total ROI
Note: Figure 1. reports data across ALL sectors, not just automotive and FMCG
This shows why it’s so important to maintain investments in those channels whose principal function is to drive awareness through brand-building. The challenge lies in finding the optimal balance of investment between brand-building media and those more focused on generating sales in the short term. Advertisers should not lose perspective and should not stop investing in media that can deliver mass audiences at scale.
The power of out of home – as an amplifier
In Ebiquity’s market mix modelling benchmark studies, OOH media are traditionally not great at generating short-term sales. Global benchmarks from 2022, for instance, put the short-term impact of OOH at only about 40% the impact of TV (see Figure 2.), so faced with those bald performance numbers, it is fair to ask why it should be considered on a media plan at all.
Figure 2. Ebiquity benchmark study of media performance from 2022 – TV vs OOH
However, when considering mass audiences, brand-building, and long-term investment, the data show that one productive area to focus on is using OOH media as an amplifier rather than stand-alone. Although OOH is often perceived as a traditional brand-building channel, it has undergone a significant transformation in recent years, becoming a true, omni-channel option – particularly when used in combination with other media.
In that context, OOH is one of the media channels with the greatest capacity for long-term power generation and should be a fundamental element when drawing up an efficient media plan. This doesn’t mean we believe that OOH has unique properties, but it does work well as part of a balanced media investment plan, driving efficiency in both digital and below-the-line.
What happens when OOH is combined with other media?
In our study, we analysed TV campaigns with and without OOH support, and assessed their impact on sales, isolating all comparable components between campaigns. And what we saw was that TV impact increases on average by as much as 35% when supported by OOH, as shown in Figure 3.
Figure 3. The sales contribution of TV with and without OOH
We went on to run a similar analysis with campaigns executed in digital media with and without OOH support and we found that: (a) the CTR (the percentage of clicks on impressions) in display improves by 18% in weeks with OOH support; (b) for online video, the CTR also improves, this time by 45%; (c) social enjoys an improvement of 2%; and, (d) in the case of programmatic buys, there’s a CTR improvement of 7%. In all these cases – summarised in Figure 4. – OOH helps to improve digital media performance.
Figure 4. The impact of OOH on ROI from different digital media lines
Summing up
Our recent analysis suggests that brands looking for opportunities to improve efficiency should not forget the most obvious part of the equation: the conversion funnel. The bottom of the funnel needs to feed off the top, and by exploiting synergies between media channels as outlined here, we can create ever-more efficient and effective media plans. It’s clear that OOH can help to amplify the effect of other media channels and lines. The challenge is for each brand to identify the right balance and media mix.
