China Insights
English
English

Finding new approach to measure impact of media spending

Jason Yu

Greater China General Manager

Shoppers 25.04.2018 / 14:34

barcode trolley 2 col

Understanding of the real impact individual advertising campaigns have on actual sales.

By the end of 2018, the global media investment industry is set to be worth over US$550 billion, according to GroupM. With this number growing and fast-moving consumer goods (FMCG) brands making up a quarter of that spend, understanding the impact of advertising is crucial.

Media investment vs sales

Kantar Worldpanel’s recent report Changing Media Success Measures showed that the short-term impact of any successful media campaign should be an uplift in sales. From our studies concentrating on the impact of media investment, we can see that, during a campaign, the average impact of advertising campaigns is 4.5% of the total sales of the FMCG brand during this period of time. Or in other words, without the influence of the campaign, the sales of the brand during this period would have been 4.5% lower. (All effects are controlled by the presence of promotions, as well as the underlying equity or loyalty associated with each brand analysed.)

Globally, only 8% of our researched ad campaigns had contributed more than 7.5% of total sales of their brands during campaigns.



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog

How about the benchmarks in China? Kantar Worldpanel’s Consumer Mix Modelling has found that from 2016 till 2017, campaigns of FMCG brands have contributed an average of 4.0% of sales for their brands, lower than global average. In 2017, the ratio was only 3.8%.

Category matters

The contribution to sales provides key benchmarks—particularly at sector level, where we see the biggest differences. With an average uplift 20% higher than the global benchmark, beauty and personal care, and homecare brand campaigns are the most responsive to advertising. Food and drink brands, on the other hand, see an average uplift of 3.8%—14% lower than the global figure.

When looking at media campaigns, considering your sector benchmark is key.



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog

New vs existing shoppers

Advertising’s effectiveness should be measured not just by financials, but on how many new shoppers it has brought into the brand.

Two campaigns that generate the same level of sales might appear identical, but when we look through the shopper lens we can understand its true success. By knowing how many new shoppers a brand campaign has attracted, we can see advertising’s long-term impact.

From the shoppers who have been influenced by a campaign, more than one in three (37%) are new*. New shoppers attracted to the brand because of its advertising are likely to be lighter buyers initially. They may be testing the brand against a competitor they usually buy or entering a category for the first time. Therefore, the long-term gain comes in the opportunity to keep them in the brand.

Alongside attracting the all-important new shoppers, media spending also benefits a brands penetration through stopping existing ones from leaving. We see on average over a quarter of shoppers not leaving a brand due to the ad campaign that person has seen.

This means that in total 64% of shoppers are having a positive impact on brand penetration when we combine the new with those not leaving.

The third element we capture are existing shoppers increasing their spend, with 36% of people during a campaign behaving this way.

In China, new shoppers’ proportion is higher than global average (42% vs 37%), while not-leaving consumers (25% vs 27%) and buying-more consumers (33% vs 36%) are both lower than global benchmark. It means that keep recruiting new shoppers are especially important in China.



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog

The mix of new versus retained shoppers is particularly important when we look at the differences between big and small brands, which have an almost identical sales uplift coming from media. Our data shows that big brands tend to get a much higher proportion of their media sales from existing shoppers buying more, whilst smaller brands benefit more from attracting new shoppers.

When benchmarking the success of a campaign, as well as considering the sector you play in, it’s important to think about the size of your brand.



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog

To download the full version of Changing Media Success Measures (English), please click here.

Source: Kantar Worldpanel

Editor's notes

* Not purchased in the previous six months;

* To reach the author, or to know more information, data and analysis of China's FMCG market, please contact us ;

* Please subscribe to our newsletter to receive news alerts.

 

Latest Stories

Connected Intelligence, AI and Voice will transform media in the new year, says Kantar.

Meet the fast-rising brands to understand how they broke into the landscape, and learn how can incumbents ward off their challenge.

What have Chinese consumers bought during the world’s largest e-commerce shopping event? Which categories are big winners? How much have they spent? Do people regret spending too much?

P&G and Yili lead the race, reaching over 160 million families. Nongfu Spring, Haday and Dali are fastest growers.

Xiaomi Mi 8 was the most popular handset model in these three months. The next three models on the best-seller ranking were all from iPhone.

Related Content
Social Network