Welcome to the Wheelhouse, a popular series of blogs from Ebiquity’s Marketing Effectiveness team.
In this latest edition of our blog The Wheelhouse, Client Partner Ben Maslen explores how brands can improve ROI through within-channel optimisation. Drawing on Thinkbox’s Profit Ability 2 study, he highlights practical steps to reduce inefficiencies within digital media and close the ROI gap. As digital channels now dominate media strategies, Maslen explains why fine-tuning investment within these channels is essential for sustainable growth.
Advertising drives growth, delivering both short- and long-term profits. On average, it generates £1.87 in short-term profit ROI for every £1 spent, increasing to £4.11 with sustained effects. TV, especially linear TV combined with B-VOD, is a key driver, delivering 53.7% of returns on just 43.6% of investment. These insights come from Profit Ability 2, a major study by Thinkbox. The study examined £1.8 billion in media spend across 10 channels, covering 141 brands from 14 sectors between 2021 and 2023. Data came from Ebiquity, EssenceMediacom, Gain Theory, Mindshare, and Wavemaker UK.
Two Sides of the Same Coin
There are two, complementary approaches brands need to take to improve ROI from their advertising investment. My colleagues in Ebiquity’s Marketing Effectiveness practice help advertisers improve ROI by solving the between-channel optimisation problem. By this I mean advising how brands should allocate investment across different channels to optimise ROI. More TV, less radio; more out-of-home, less paid social.
Profit Ability 2 has given us up-to-date guidelines for what works best – and where diminishing returns lie – across multiple categories to help direct this guidance. The Effectiveness team also help optimise spend by correctly apportioning budgets to the right markets and categories.
Closing the Digital Gap
What many advertisers are less aware of is how they can improve ROI through within-channel optimisation, helping drive media efficiency. With more than three-quarters of all media now digital – and with the ecosystem complex, fragmented, and rife with waste – this often simply comes down to good governance.
There are several approaches advertisers can take to close this digital gap and improve the efficiency of their digital media. Five particularly impactful options to reduce the waste are:
1. Eliminate Made For Advertising Inventory
MFA is a user-hostile ad experience, with ad clutter, auto-refreshing ads, paid traffic, and syndicated, AI-generated content. Not only is MFA inventory ineffective, it’s also known to emit 26% more carbon than high-quality media. Yet according to the ANA, in 2023, 15% of open web programmatic investment was MFA, and more than nine in ten advertisers still buy it.
2. Reduce the Programmatic Long Tail
Buying media inventory programmatically often exposes advertisers to a long tail of sites where investment is low. This effect leads to supply chain fragmentation and defunding quality news sites, investment in misinformation and fake news, and more carbon. Last year, we discovered one client’s spend that was invested across more than 325,000 different domains.
3. Eliminate Audience Extension Networks
Audience extension networks are third-party domains, where the likes of Meta and Google deliver ad inventory that many advertisers believe is appearing on the suppliers’ own platforms. They are designed to extend reach and delivery, often enabled by default. The quality of inventory served is low, with muted sound and autoplay enabled. We typically reduce exposure to these networks to less than one percent of all spend for Digital Governance clients. This contrasts with an average of almost 7% for budgets examined by Adalytics.
4. Refine and Update Ad Verification Strategy
The goalposts of ad verification are ever-shifting, and providers are constantly updating their proprietary algorithms, increasingly using AI. Advertisers should review ad verification protocols regularly, ideally against the benchmarks for viewability, brand safety, and invalid traffic provided – by country – by the WFA.
5. Apply Proper Diligence to PPC
In 2023, PPC represented 30% of global ad spend, a total of $257bn. Yet PPC is one of the least-assessed channels in the marketing mix. And while PPC has a strong, long-term profit ROI of £3.52, it could be much stronger. Paid search is essential to many brands’ success, but regularly assessing, identifying, and quantifying wastage is the key to boosting ROI still further.
The Proof of the Pudding
In 2023 alone, Ebiquity’s media experts identified more than $1bn in quantified digital inefficiency. With inefficiencies ranging from 10-45% of ad spend, the average value opportunity among our Digital Governance clients was 21%.
Increasingly, the challenges advertisers face are not so much between channels but rather within them. Their media mix may be well-balanced and optimised, but their investment within channels is not going where they think it is. The results of Profit Ability 2 show that it’s never been more important to address both between- and within-channel optimisation.
Want exclusive access to our on-demand webinar on Closing the Digital ROI Gap? Contact your Ebiquity Client Partner or reach out to us here.
