Leisure and pleasure

Overview

Clients in this category invested around £2.3 billion in media in 2017. Traditionally heavy TV spenders, with other established mass media as secondary support, ‘leisure and pleasure’ brands allocated less than 30% of adspend into digital media in 2017, lower than for other categories. While digital has grown share over the last few years, the bulk of spend remains in established mass media.

Benchmarketing’s analysis 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.

To maximise PROI for brands in the ‘leisure and pleasure’ category, Benchmarketing recommend that an average 19.4% of the total media budget is allocated to print newsbrands and 2.4% to digital newsbrands.

Clients are losing out on a massive £1.2 billion potential profit through underinvesting in newsbrands, particularly print. 

19.4%
Print newsbrands' minimum recommended share of budget
2.4%
Digital newsbrands' minimum recommended share of budget

Adspend patterns

The distribution of the ‘leisure and pleasure’ category advertising expenditure has shifted in the last five years. TV share is down by over five percentage points, magazine media has lost a little bit of share, while radio and out of home have remained relatively stable. Print newsbrands, after a decline in 2014, have retained their share since 2015.

Online media accounts for a lower share of spend than categories such as motors and finance, however in the last couple of years there’s been a rise in online investment, which now accounts for just under 29% of all spend. Digital display has risen from 12.9% in 2013 to 22% in 2017.

Newsbrand spend appears to have stabilised, with a small increase to 9.6% in 2017. This is less than two percentage points lower than 2013. However, this is significantly lower than the optimum share recommended by Benchmarketing to optimise overall campaign effectiveness. The underinvestment in multi-platform newsbrands doesn’t match the changes in readership. With digital newsbrand readership taken into account, the drop in spend is 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

‘Leisure and pleasure’ advertising campaigns generate strong profits – but these could be increased by around 46% if the spend in newspapers was raised by 10 percentage points to the optimal level for maximum campaign profitability.

Average print newsbrand spend currently sits at just under 9% of overall media budgets, so it falls into the lowest third (tertile) of cases analysed. Campaigns in this tertile generate a respectable PROI of 2.26, which means they pay back £2.26 for every £1 invested. However, there is a clear opportunity for ‘leisure and pleasure’ brands to increase campaign profitability to £3.31 per £1 spent.

To achieve this, newsbrand print spend needs to be significantly higher, with an average allocation of between 19.4% and 31.3% of total campaign media spend. When print newsbrands are included at this level, the PROI multiplier for the campaign is 3.31. This means that they pay back £3.31 for every £1 invested. 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 3.31
when print newsbrands are at optimum level

Campaign PROI: digital

For the first time, the profitability of adding digital newsbrands to campaigns specifically can be quantified.

There are 124 cases using digital newsbrands in the Benchmarketing econometric model, which provides a large base for analysis. The findings show that adding digital newsbrands at the current average level of 0.8% 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 1.7% of overall budget deliver a PROI of 2.61. Campaign PROI is significantly higher, at 4.35, when digital newsbrand spend allocation is between 1.7% and 3% 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.

PROI is 4.35
when digital newsbrands are at optimum level

The profit gap

The current average 8.8% investment in print newsbrands elicits a campaign profit of £466 million. If the average rose to the recommended 19.4% minimum share of media spend to optimise overall campaign profit levels, the additional profit released could be as much as £1 billion.

Digital display is an efficient channel for delivering profit in the ‘leisure and pleasure’ category and including digital newsbrands as part of the online strategy clearly reaps additional profit. The recommendation is that digital newsbrands should take a slightly higher share of overall media spend, at 2.4%. This would elicit potential additional profit of £196 million.

  Missing profit
  £244.9m - £49m = £195.9m 
Missing profit
 £1.51bn - £466.4m = £1.04bn
Potential campaign profit
£56.3m x £4.35= £244.9m
Potential campaign profit
£454.9m x £3.31 = £1.51bn
Recommended average
investment in online newsbrands

2.4% = £56.3m
Recommended average
investment in print newsbrands

19.4% = £454.9m
Campaign profit
£18.8m x £2.61 = £49m
Campaign profit
£206.4m x £2.26 = £466.4m
Current investment in online newsbrands
0.8% = £18.8m
Current investment in print newsbrands
8.8% = £206.4m

Current 'leisure and pleasure'   super-category spend = £2.35bn

£1.24bn
Total missing profit =

Where should the money come from?

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

Adstock varies quite considerably by media channel in the ‘leisure and pleasure’ category, with TV and magazines the highest and digital search the lowest. On the whole, digital channels tend to have lower adstocks.

Response curve analysis demonstrates that channels such as cinema and out of home are less scaleable – despite high adstocks – than TV, print newsbrands and digital display in the ‘leisure and pleasure’ category. That is, the point at which additional investment stops delivering incremental profit is at lower spend levels for cinema and out of home than these three media channels. In fact, the response curve for print newsbrands is almost exactly the same as for digital display, second only to TV. This suggests that print newsbrands should see the significant increase in investment recommended by the profit analysis.

The recommendation is therefore to adjust budgets to allow for a greater proportion of digital newsbrand display and to reinstate print newsbrands at the most effective and efficient spend level in the overall media budget.