Many news media are focused on new business models, profitability, and shareholders’ value. But in this quest for innovation and continuity, we might overlook one of the major assets of the news media: it’s advertisers’ value.

In tough economic times, with a critical look at diminishing advertising budgets, news media can still deliver excellent return on investment (ROI), even resulting in direct uplift at the counter.

In 2013 we expect to deliver some hard evidence of this belief.

Like everywhere in Europe, the Dutch news media, especially newspapers, are experiencing tough competition from other media channels. Most A-brand advertisers choose a multi-media approach, with TV and online as a base.

On top of that, newspapers, magazines, radio, or outdoor can play a secondary role. But they have to compete, even for a supporting role.

The low gross rating point (GRP) prices of television in the Netherlands make this pitch extra difficult — particularly for retailers who need weekly impulse shopping traffic and still rely on regular newspaper advertising.

The advertiser’s focus on media ROI and direct sales also offers chances.

A dedicated panel of GfK Panel Services is a validated source for this type of metric. This panel consists of a few thousand consumers whose media and consumer behaviour are continuously tracked.

A German analysis in 2011 of more than 100 multi-media campaigns delivered some promising results. If we look at sales ROI of media campaigns, newspapers belong to the most remunerative media channels.

These positive insights encouraged the Dutch news media promoter Cebuco to initiate some ROI studies for their specific market. The organisation signed up for seven studies; the individual news media will account for three extra cases.

When transformed to showcases, these studies can be used as incentives for other A-brands. And an aggregated study of the individual cases — planned for mid 2013 — will be able to bring out some general lessons for a better advertising ROI.

Of course, a secondary goal is to gain a fair share in the TV-dominated Dutch advertising market.

Halfway through this project, the first lessons are already emerging. And for news media, they appear to be very promising.

The provisionary conclusion is that TV is over-used. Because of the cheap tariffs and effectiveness promise, media campaigns are regularly depending on 1,000 GRPs or more.

On the other hand, print advertisement is limited to one shot or a few inserts. GfK found that the law of diminishing returns is clearly visible; the last flights of the TV commercials don’t contribute much to the ROI.

On the other hand, the print ads are still on the progressive side of the curve; by adding more newspaper adds, the ROI will grow. By optimising the media strategy for the ratio of print to TV, the ROI can improve to 25%.

Although we’ll have to wait for the aggregated study to deliver the hard evidence, some results are worth mentioning in this “appetizer article”:

• If well-targeted and well-created, the newspaper ad ROI can run up to 240% (even accounted with gross spending).
• Of course, news sites can be effective, as well; beware that media campaigns should be well-targeted to perform above average.
• TV loses effectiveness after too many encounters. Newspapers, meanwhile, can deliver growing ROI when inserted three or four times per campaign.

So news media can deliver an eminent ROI on short notice. But that is not the only achievement. Don’t forget the campaign contributes also to a stronger reputation and that is a basis for future sales.

In the course of this year, Cebuco expects to publish some eye-opening results and some long-term lessons for an effective (news media) campaign. Undoubtedly these findings will get to you through the familiar INMA channels.

In the meantime, be confident of the sales power your media have for your local advertisers.

 
By Erik Grimm
Source:  http://www.inma.org/blogs/research/post.cfm/