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Cross Media Analysis Increasing ROI in the media mix L’Oreal case study

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Main content

Summary (slides 3)

Set-up and Objectives (slides 5-7)

•  Study objectives

•  Campaign overview

•  Set-Up research

Analysis (slides 9-13)

•  Google Display Network (GDN)

•  Optimizing ROI Curves

•  Optimization of Pre-roll campaigns

•  Frequency capping

Recommendations (slide 15)

Appendix (slides 17-19)

•  Monthly efficiency indices ROS (untargeted) and targeted Pre-roll

•  Explanation regression analysis

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Increase ROI by 32% by shifting 10% TV budget

Current budget allocation New budget allocation

72%

17%

11%

TV

Print

Online

65%

21%

14%

TV

Print

Online

10% of TV budget towards Print/Online

ROI indexed on 100 ROI = 132

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Set-up and objectives

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Study objectives Main Research questions

Research questions for optimizing the media mix

•  How do cost per GRP for TV, Print, Display, Video Ads and Rich Media compare?

•  How to optimize reach and (effective) frequency across media/formats?

•  How does targeting of media and ad formats compare to each other?

•  What is the impact of the different media and ad formats compared to each other?

•  How do cost/effect (ROI) scores compare?

1 Online and off-line have different “languages”: how do we integrate them towards one currency?

2 Online and off-line have different impact and cost: how do we compare and optimize the media mix?

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Research and campaign period (18 campaigns included)

The research and analysis were done over a 5 month period, including 18 campaigns of 14 different beauty products.

February March April May June July

Week 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

Product 1

Product 2

Product 3

Product 4

Product 5

Product 6

Product 7

Product 8

Product 9

Product 10

Product 11

Product 12

Product 13

Product 14

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Method: Media Efficiency Panel Purchase and media behavior measured from the same individuals (single source)

Print

Folder

Loyalty

Price

TV

Radio

Online

Psychographic

Demo-graphic

Media

Purchase

Personal

Promo

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How to reallocate 10% TV budget and increase ROI by 32%?

Cost

Targeting

Impact

Cost/Effect

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Low cost/GRP on GDN results in opportunity to increase ROI using a small part of the 10% TV budget

The cost/GRP (or CPM) on Google Display Network on average are ~20 times lower than TV, targeting is 9% better and

impact per served impression is about a fifth of TV. This results in ~4 times higher ROI at current spend level. A small

part of the 10% shift in TV budget is allocated to GDN resulting in 4 times more GDN impressions.

Cost 20,11

Targeting 1,09

Impact 0,19

Cost/Effect 4,20

€556

€23

€-

€100

€200

€300

€400

€500

€600

TV Google Display Network

Net Cost/GRP

Source: price of GDN is based on the auction + Cost/GRP TV from Carat Media facts booklet (TV net cost based on 70% average market discount)

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Shift budget to media that are in steeper part of ROI curve Shift part of TV budget towards print and part of ‘Rich media other’ budget towards YouTube

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

0 2 4 6 8 10 12 14

TV

Print

Rich Media YouTube

Rich Media Other

→ Average number of contacts

→ In

crea

se in

sal

es

= Average number of contacts

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For many audiences targeted pre-roll is cheaper than TV On TV smaller audiences have a higher GRP price whilst each GRP delivers fewer impressions. YouTube Pre-roll has more stable rate by audience.

Net Cost/GRP Indexed against TV for common TV audiences

1.0

0.1

1.0

0.2

1.0 0.6

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0.3

1.0 1.1

0

1

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10

M20-34 20-34 20-49 V20-49 13+

Net cost/GRP (euro) Population size

Impressions per GRP

Average Net CPM TV (euro)* Average Net CPM l’Oréal

13+ 625 13,753,000 137530 5 5.5

20-34 795 2,996,000 29960 27 5.5

20-49 691 6,832,000 68320 10 5.5

Shoppers 20-49 633 3,732,000 37320 17 5.5

Shoppers + Kid 625 1,896,000 18960 33 5.5

Men 20-34 925 1,502,000 15020 62 5.5

Women 20-49 624 3,398,000 33980 18 5.5

Source: CPM targeted Pre-roll on YouTube in the auction was 5,5 euro + Cost/GRP TV from Carat Media facts booklet (TV net cost based on 70% average market discount)

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HIGH SEASON HIGH SEASON

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Targeted Pre-roll: €14,- CPM

Untargeted Pre-roll (Run of Site): €10,- CPM

Monthly TV costs are STER, SBS, RTL and and average. YouTube Pre-roll costs are based on the YouTube 2012 rate card

Cost/GRP

Pre-Roll is extra efficient in expensive TV months Large Pre-roll opportunity in expensive TV months due to seasonality. Pre-roll does not have this seasonality over months. (calculation Pre-roll versus TV ROI by month in back-up)

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Cap frequency for sites with very frequent visitors Sites/networks with high visiting frequency create too much contacts. For those sites, frequency capping increases ROI strongly.

18.6%

7.3%

9.2%

4.6%

11.6%

4.0%

8.2

4.2

3.0

8.2

3.6

5.1

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2.0

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2%

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16%

18%

20%

Display Google Display Other Rich Media Google

Rich Media Other Pre-roll Google Pre-roll Other

Reach

Frequency

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Recommendations

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Recommendations: shift 10% TV budget

1 Shift part of the TV budget towards Google Display Network. The combination of 20 times lower cost/GRP and

one fifth of the impact compared to TV results in ~4 times higher ROI at current spend level.

2 Shift budget at the end of the TV ROI curve towards media that are still functioning in a steeper part of their

ROI curve (Print and Rich Media).

3 Use variation in TV pricing over months and target audiences as an opportunity to find month versus audience

combinations where Pre-roll is a cheaper solution than TV. (see back up slides for ROI calculation Pre-roll

versus TV by month and audience)

4 Apply frequency capping particularly on sites with very frequent visitors (e.g. social sites). Otherwise

campaigns build an extreme amount of contacts with a relatively small part of the target audience.