Finance

Overview

Finance clients invest heavily in media, spending £1.5 billion in 2017. Traditionally heavy newspaper spenders in the past, finance brands have cut print allocations substantially since 2013, while spending in digital newsbrands has remained stable.

Benchmarketing’s analysis shows that low spending in newsbrands is harming the profit return of campaigns. This results in lower payback for the entire campaign and diminishing returns from overinvestment in digital media.

To maximise PROI it is recommended that a minimum of 11.9% of the total media budget is allocated to print newspapers and 5.6% to digital newsbrands.

Analysis indicates that TV and digital display are important lead channels for brand and response advertising respectively.

Finance clients are losing out on £264 million potential profit through underinvesting in print and digital newsbrands.

11.9%
Print newsbrands' minimum recommended share of budget
5.6%
Digital newsbrands' minimum recommended share of budget

Adspend patterns

While TV and radio have maintained share of finance category advertising expenditure over the last five years, out of home and print media have witnessed declines.

Online media now secure almost half of finance clients’ budgets. Digital display alone accounts for 38.1% of total spend.

Finance category spend in print newsbrands has exhibited the most marked decline, from 19% of total media budgets in 2013 to just 7.2% in 2017.

Spend in digital newsbrands has maintained a share of around 4% during the same period, despite a huge growth in audience.

The fall in print adspend is far steeper than the decline in circulation and this sharp fall is also at odds with the growth in the overall weekly newsbrand audience, which now stands at 41.3 million, according to latest PAMCo data.

Campaign PROI: print

Profit margins for finance campaigns are lower in percentage terms when compared with some other categories, due to the highly competitive nature of the acquisitions market.

However, finance campaigns are considerably more profitable when the spend in print newsbrands is up to 16.5% of overall campaign spend.

Average print spend currently sits at 7.2% of overall media budgets, so it falls into the lowest third (tertile) of cases analysed. Multimedia finance campaigns in this tertile generate a PROI of just 0.52.

Considerably higher campaign profitability is discovered when print newsbrand spend is between 7.2% and 16.5% of the total campaign investment. When print newsbrands are included at this level, the PROI multiplier for the campaign is 1.32. 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.

PROI is 1.32
when print newsbrands are at optimum level

Campaign PROI: digital

For the first time, the profitability of adding digital newsbrands to finance 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. However, there are clear findings that adding digital newsbrands at the current average level of 4.1% of overall budget is not optimal for delivering PROI for the total campaign. At this level, the campaign PROI is just 0.42 (that is, no short-term payback of media cost), whereas the profit return for campaigns spending between 4.1% and 7% of budget on digital newsbrands is a much more positive 1.31.

PROI is 1.31
when digital newsbrands are at optimum level

The profit gap

The current average 7.2% investment in print newsbrands elicits a campaign profit of £56 million. If the average rose to the 11.9% minimum share of media spend to optimise overall campaign profit levels, the additional profit released could be as much as £179 million.

The recommendation for digital newsbrands is that it should take a slightly higher share of overall media spend, at 5.6%. This would elicit potential additional profit of £110 million.

Missing profit
£110m - £25.8m = £84.2m
Missing profit
£235.6m - £56.2m = £179.4m
Potential campaign profit
£84m x £1.31= £110m
Potential campaign profit
£178.5m x £1.32 = £235.6m
Recommended average
investment in online newsbrands

5.6% = £84m
Recommended average
investment in print newsbrands

11.9% = £178.5m
Campaign profit
£61.5m x £0.42 = £25.8m
Campaign profit
£108m x £0.52 = £56.2m
Current investment in online newsbrands
4.1% = £61.5m
Current investment in print newsbrands
7.2% = £108m
Current finance category spend
= £1.5bn
£264m
Total missing profit =

Where should the money come from?

To understand how budgets in the finance category can be effectively realigned, Benchmarketing looked at two separate pieces of further analysis in addition to PROI calculations – adstock and response curves.

Adstock is strong for most established media channels in the finance category, which suggests they are contributing to long-term brand value. Digital display and search have lower adstocks, which fits with their primary use for driving response. Digital video has brand building potential but is not yet scaleable.

TV and digital display are both highly scaleable in the finance category. It therefore makes sense to shift a slightly greater proportion of the digital display spend into digital newsbrands. Print newsbrands are an important part of the media mix for driving incremental profit, especially for lower budgets.

The recommendation is to review the role of tertiary media in order to increase investment in print newsbrands.