ThinkboxThis month’s Chart of the Month comes from our latest study, ‘The Growth Gap’ by WPP Media, which explores how, with constrained budgets, you can allocate resources to balance immediate sales with long-term brand equity.
The study analysed 624 brands and over 7,400 different campaign scenarios. It found that many businesses stop investing in advertising long before that investment ceases to be profitable. Current average brand annual media investment level is £15 million, but saturation point (when each £1 invested starts generating less than £1 in profit return) is at £30 million.
The study found that the average brand could double their advertising investment and still keep every pound profitable, unlocking 11% headline profit growth (c. £32 billion profit left on the table).
This varies by sector however. Travel brands could increase advertising investment by 275%, Retail by 131%, and Automotive by 67% and still see profitable returns. In contrast, proving the value of additional media investment for Telecoms, Finance, and FMCG brands is more complex. It requires factoring in customer lifecycle or assessing advertising’s impact on other metrics, such as price elasticity and distribution.
Want to know more? Watch Advertising Through Adversity on demand.
For all Chart of the Month’s from the recent months, download the slides from the link above, this includes:
- June: TV has the highest share of cultural availability
- May: 30-second TV ads consistently account for half of all impacts
- April: TV advertising is the most trusted medium
- March: Total TV is fundamental for getting ads seen
- January/February: We feel most relaxed when watching TV
- December: TV is the battery that charges other media
- September/October: Twice as many people trust brands advertised on TV than YouTube
- August: ‘Cheap media isn’t cheap if nobody’s watching’