2. Overview Proving newsbrands deliver business results
We know that sales are relatively easy to achieve. Profitable sales that build brand value on the balance sheet are far harder to achieve
The focus of the research:
The effectiveness of both print and digital newsbrands
To separate out the impact of digital advertising in newsbrands instead of lumping it in with all digital display
Wider market coverage than any other study
To provide actionable insights and bespoke learnings to advertisers in as many categories as possible, through the use of ‘super-categories’
A focus on profit
To look at how newsbrands contribute to overall campaign success, through assessing their impact on a campaign’s profitability
Source: Planning for profit, Newsworks, 2018

3. £3 billion Highlights more than double £300 million
Brands are missing out on
£3 billion
of campaign profit through under-utilising newsbrands in both print and digital
Increasing print newsbrands’ share of budget to the optimal level would
more than double
current campaign PROI*
The importance of context has never been greater. Increased spend in digital newsbrands will result in higher campaign profit levels to the tune of
£300 million
*profit return on investment
Source: Planning for profit, Newsworks, 2018

4. Nuts and bolts
Benchmarketing conducted a meta-analysis of 684 econometric models from , across a number of different sectors
‘Super-categories’ mean wider category coverage
Looking at 30 individual categories, analysing characteristics such as purchase behaviour as well as how they behaved in relation to response to advertising investment, Benchmarketing developed five ‘super-categories’ as distinct segments. These categories cover an impressive 86% of the total UK advertising market
The impact of both print and digital newsbrands
This work addresses the measurement of digital newsbrands separately from the amorphous mass of online display. For the first time we are able to quantify the impact of including both print and digital newsbrands on overall campaign effectiveness
Measuring profit return on investment (PROI)
PROI is the revenue generated by advertising campaigns divided by the profit margin for each client over the short to medium-term. It takes into account the media investment and the cost of goods or services, so provides a much clearer guide to advertising payback than simply looking at the revenue generated. Benchmarketing’s analysis looks at the short to medium-term PROI, with an average of three – six months post-campaign effect. Benchmarketing's assessment of the long-term effect is twice the short to medium-term PROI, although this can vary by category
Source: Planning for profit, Newsworks, 2018

5. Retail

6. Category summary: Retail
Retail clients are losing out on £1.34 billion potential profit through underinvesting in newsbrands
In order to maximise campaign profit return on investment (PROI) for brands:
an average 21.5% of the total media budget should be allocated to print newsbrands
an average 3.7% of the total media budget should be allocated to digital newsbrands
Benchmarketing’s analysis covers nine retail clients, across 44 different campaigns. It shows that, although all cases include some newsbrands in the media mix, low spending in these channels is harming the profit return from the campaign. This results in lower payback for the entire campaign and diminishing returns from overinvestment in digital media.
Profit return on investment (PROI) is the revenue generated by advertising campaigns divided by the profit margin for each client over the short to medium-term. It takes into account the media investment and the cost of goods or services, so provides a much clearer guide to advertising payback than simply looking at the revenue generated.
In order to maximise campaign PROI, Benchmarketing recommend that a minimum of 21.5% of the total media budget is allocated to print newsbrands and 3.7% to digital newsbrands. The exact investment in print newsbrands to optimise profit varies according to actual budget levels: 25% for campaigns up to around £10 million, 24% for campaigns around the £15 million mark, 22% for £25 million budgets and 21% for larger campaigns up to £50 million.
Analysis shows that TV-led multimedia campaigns using a wide variety of media are most successful at generating maximum PROI. However, retail clients are losing out on £1.34 billion potential profit through underinvesting in newsbrands, particularly print. As rising costs continue to exert pressure on margins, it is important that media budgets are invested where they will get proven returns.
The retail category consists of non-grocery brands
Source: Planning for profit, Newsworks, 2018

7. Digital display share of the RETAIL media budget has more than doubled since 2013
Print newsbrands
Digital newsbrands
2017
31.9%
5.5%
4.3%
14.4%
24.0%
14.3%
0.3%
3.1%
1.7%
0.4%
2016
31.8%
5.7%
4.4%
16.1%
22.5%
12.8%
0.6%
3.7%
1.7%
0.7%
2015
39.3%
5.6%
4.4%
5.3%
15.3%
15.3%
12.0%
0.6%
1.5%
0.5%
2014
39.4%
5.7%
6.0%
18.0%
12.0%
11.8%
The distribution of the retail category advertising expenditure has shifted noticeably in the last five years. TV share is down by nearly 10 percentage points, magazine media have lost a little bit of share and print newsbrands have remained relatively stable since 2015.
Online media accounts for a lower share of retail spend than categories such as motors and finance, however in the last couple of years there’s been a jump in online investment, which now accounts for 40% of all spend. Digital display has risen from 16.8% in 2015 to 25.7% in 2017.
0.5%
3.9%
2.1%
0.6%
2013
41.2%
6.8%
20.7%
10.1%
11.2%
0.1%
3.5%
3.7%
2.2%
0.5% TV
Cinema
OOH
Radio
Magazine
Print newsbrands
Digital newsbrands
Digital display other
Digital video
Digital search
Source: Benchmarketing analysis of SMI (Standard Media Index) UK Pool, 1 Jan 2013 to 31 Dec 2017

8. Newsbrands’ share of total RETAIL
media budget strengthened in 2016, but fell back in 2017
22.9%
20.1%
2.2%
17.8%
16.8%
16.1%
2.1%
1.7%
1.5%
1.7%
Share of media spend
20.7%
18.0%
16.1%
15.3%
14.4%
Newsbrand spend appears to have stabilised more recently, but at 16.1% is nearly seven percentage points lower than in This is a significant sum, given that advertising expenditure in the retail category is estimated at £1.66 billion in 2017 (based on Nielsen and SMI data). The fall in print adspend is far steeper than the decline in circulation of print newsbrands, with daily circulation having fallen only 19% over this period. The sharp fall in spend is also at odds with the growth in the digital newsbrand audience, which now boasts a weekly readership of 31 million, according to the latest PAMCo data.
2013
2014
2015
2016
2017
Print newsbrands %
Digital newsbrands %
Source: Benchmarketing analysis of SMI (Standard Media Index) UK Pool, 1 Jan 2013 to 31 Dec 2017
The retail category consists of non-grocery brands.

9. The peak level of campaign profit return on investment for the RETAIL category occurs when print newsbrand investment is at least 21.5% of the total media budget
Campaign PROI vs print newsbrand usage
Print newsbrands' current average share of budget: 14.4%
Campaign PROI
3.87
2.17
Retail advertising campaigns currently don’t generate a short-term profit. However, this could be turned around if the spend in newsbrands was raised by just over seven percentage points to the optimal level for maximum campaign profitability.
Average print newsbrand spend currently sits at just under 14.4% of overall media budgets, so it falls into the lowest third (tertile) of cases analysed. Campaigns in this tertile operate at a short-term loss, with a PROI of However, there is a clear opportunity for retailers to increase campaign pay back to £3.87 per £1 spent.
In order to achieve this, newsbrand print spend needs to be fractionally above 2013 levels, with a minimum allocation of 21.5% of total campaign media spend. This brings the PROI multiplier for the campaign to 3.87, which means pay back of £3.87 for every £1 spent – remember that profit calculations have already accounted for all media and cost of goods, so any PROI figure of over 1.00 is paying back on top of the initial investment in the short-term. This in turn will mean considerably higher long-term profit: Benchmarketing's estimate of the long-term effect is twice the short to medium-term PROI.
0.55
Low 2.6% %
Medium 16.8% %
High 21.5% %
% print newsbrand spend
Source: Benchmarketing Base: 41 cases using print newsbrands.
The retail category consists of non-grocery brands.

10. The peak level of campaign profit return on investment for the RETAIL category occurs when digital newsbrand investment is between 2.6% and 4.7% of the total media budget
Campaign PROI vs digital newsbrand usage
Digital newsbrands' current average share of budget: 1.7%
Digital display overall is 25.7%
Campaign PROI
2.43
2.31
2.12
Benchmarketing’s 2018 analysis gives us the means to split out the PROI of digital newsbrands from the rest of digital display for the very first time. Newsworks' previous work with Peter Field analysing the IPA Databank shows that adding digital newsbrands, particularly in combination with print newsbrands, has a strong impact on multiple very large business effects, including market share, new customer acquisition and profit. Multiple studies, including the latest Newsworks and AOP report, ‘Context matters’, demonstrate the power of the quality editorial environment that newsbrands provide (see appendix for links).
Now the profitability of adding digital newsbrands to retail campaigns specifically can be quantified.
It is still early days, as the vast majority of campaigns allocate just a few percentage points of budget to newsbrand sites. There are 37 cases in the Benchmarketing econometric model vault, providing a robust base for analysis. The findings show that adding digital newsbrands at the current average level of 1.7% of overall budget has a positive impact on PROI for the total campaign, but that this small share is not providing optimal campaign profitability: campaigns utilising digital newsbrands at less than 2.6% of overall budget deliver a PROI of Campaign PROI is higher, at 2.43, when digital newsbrand spend allocation is between 2.6% and 4.7% of total media budget.
The results for digital newsbrands provide further evidence that “not all online is equal”. As programmatic increasingly favours the ‘who’ over the ‘where’ (notwithstanding white lists), advertisers are missing out on significant profit opportunities.
Low 0.1% - 0.7%
Medium 0.7% - 2.6%
High 2.6% - 4.7%
% digital newsbrand spend
Source: Benchmarketing Base: 37 cases using digital newsbrands.
The retail category consists of non-grocery brands.

11. 3.7% RETAIL: Recommended % spend in print newsbrands
Print newsbrands’ optimal share 0% 0%
28%
25%
26%
26%
25%
25%
24%
21%
22%
22%
21%
21%
21%
21%
21%
14%
Recommended spend levels for maximum campaign profit, by level of investment
The PROI of a given campaign differs according to the amount spent on the campaign overall and the mix of the channels used. Each channel has its own sales response curve. Different media deliver different profit returns at different investment levels – and of course they also interact with each other. Each channel also stops delivering incremental profit at different levels of investment – and there are huge category variations. By calculating response curves for each channel in
each category, Benchmarketing can provide recommended percentage spend in print newsbrands for media budgets between £5 million and £50 million.
For the retail category, the recommended minimum investment in print newsbrands is 21% of the total media budget. This varies across different levels of spend, from a high of 25% for smaller £5-10 million budgets, 24% for annual campaign budgets around £15 million, 22% for £20-25 million budgets and 21% for those spending £30 million and higher.
Until there are more cases with consistent spend where digital newsbrands are split out from all other digital display, it is only viable to recommend an overall minimum spend share of 3.7% for all sizes of campaign.
£1m
£2m
£3m
£4m
£5m
£6m
£7m
£8m
£9m
£10m
£15m
£20m
£25m
£30m
£35m
£40m
£45m
£50m
Total annual campaign budget (£ millions)
Digital newsbrands’ recommended share of budget:
3.7%
Source: Benchmarketing The retail category consists of non-grocery brands.

12. £1.34bn Brands are missing out on potential profit of £1.3 billion
in the RETAIL category by underinvesting in newsbrands
Current retail category spend
= £1.66bn
Current investment in print newsbrands
14.4% = £239.5m
Current investment in digital newsbrands
1.7% = £28.3m
Campaign profit
£239.5m x £0.55 = £131.7m
Total missing profit
Campaign profit
£28.3m x £2.31 = £65.3m
£1.34bn
Recommended average
investment in print newsbrands
21.5% = £357.6m
Recommended average
investment in digital newsbrands
3.7% = £61.5m
Retail brands are missing out on potential profit of £1.34 billion by underinvesting in newsbrands.
The current average 14.4% investment in print newsbrands elicits a campaign profit of £132 million. If the average rose to the recommended 21.5% minimum share of media spend to optimise overall campaign profit levels, the additional profit released could be as much as £1.25 billion.
Digital display is an efficient channel for delivering profit in the retail category and including digital newsbrands as part of the online strategy clearly reaps additional profit. The recommendation is that investment in digital newsbrands should more than double from 1.7% to 3.7% of total campaign media spend. This would elicit potential additional profit of £84 million.
Potential campaign profit
£357.6m x £3.87 = £1.38bn
Potential campaign profit
£61.5m x £2.43 = £149.5m
Missing profit
£1.38bn - £131.7m = £1.25bn
Missing profit
£149.5m - £65.3m = £84.2m
Sources: Benchmarketing 2018 PROI analysis, SMI 2017 spend data. The retail category consists of non-grocery brands.

13. and digital, reflecting its role in promoting immediate footfall
Print newsbrands’ adstock for RETAIL is the same as OOH and ahead of radio
and digital, reflecting its role in promoting immediate footfall
% weekly carry-over
65%
66%
64%
48%
40%
40%
27%
30%
13%
Two pieces of further analysis in addition to PROI calculations have informed the recommendations for budget realignments in the retail category – adstock and response curves.
The carry-over effect of advertising across weeks (adstock) is an important indicator of efficiency and feeds into profitability over time.
Adstock varies for different channels in the retail category, with TV, magazines and digital search performing particularly strongly.
Print newsbrands’ adstock is the same as out of home and ahead of radio and digital display, reflecting its strength in promoting action in the form of footfall.
This analysis is broadly in line with recent findings about the long-term profitability of established media, including Peter Field’s analysis of the IPA databank, Ebiquity and Gain Theory’s analysis for Thinkbox’s special report ‘Profit Ability, the business case for advertising’ and Ebiquity’s ‘Re-evaluating media’ for Radiocentre.
Response curves help determine whether media channel investment is scaleable. Some channels deliver high PROI at low spend levels, but, due to limits of reach and frequency as well as effectiveness, cannot be scaled up to take a higher proportion of the media budget and still deliver strong profits.
Benchmarketing’s response curve analysis demonstrates that TV, print newsbrands, digital display and digital search perform well, with diminishing returns only kicking in at higher budget levels. However digital display’s effect is very immediate, as evidenced by its low adstock. This suggests that the 26% of retail media expenditure currently invested in digital display is not delivering in the long-term. By contrast channels such as out of home and magazines, which have higher adstocks, are not delivering at higher budget levels. Current investment levels are very low (potentially as a result of this). The recommendation is therefore to adjust online budgets to allow for a greater proportion of digital newsbrand display (and potentiallyvideo) and to reinstate print newsbrands at the most effective and efficient spend level in the overall media budget. TV
Cinema
OOH
Radio
Magazine
Print newsbrands
Digital display
Digital video
Digital search
Estimated
2017 share of media budget
31.9%
5.5%
14.4%
25.7%
14.3%
0.3%
4.3%
3.1%
0.4%
Based on 38 cases in the UK. The retail category consists of non-grocery brands.
Source: Planning for profit, Newsworks, 2018