How Advertising on Different Types of Media Affects Sales of Consumer Packaged Goods

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Nielsen study shows return on ad spend

Magazines and online display ads showed the highest return on advertising spend. 

The increase in sales that consumer packaged goods brands can expect as a result of ad campaigns varies widely by the media platform used to distribute those ads, according to a new study presented today by Nielsen Catalina Solutions at the Advertising Research Foundation's Audience Measurement 2016 conference in New York.

To determine how spending on media directly affects sales, Nielsen analyzed more than 1,400 campaigns from 450 CPG brands in seven categories (baby, pet, health and beauty, general merchandise, food, beverage, and over-the-counter products) over 11 years and compared that with in-store purchase data. To determine which advertising platforms drove incremental sales, NCS isolated households that had been exposed to certain types of media—TV, online display, video, mobile, cross-platform and magazines—and compared their buying habits with those of unexposed households.

The study found that magazines showed the highest return on advertising spend (ROAS) across all CPG categories, with an average return of $3.94 for every ad dollar spent. Display ads followed with an ROAS of $2.63. Digital video had the lowest ROAS at just $1.53.

It was a different story, however, when the incremental sales driven by each media platform were compared with other audience metrics, including the number of households exposed to that platform and the number of impressions the campaign created. Nielsen found that TV drove the highest incremental sales per exposed household ($0.33), while display drove the lowest ($0.19). Mobile advertising resulted in the most sales per 1,000 impressions (an additional $26.52), while display ads resulted in the least ($16.96).

Nielsen also studied the data for specific CPG categories, determining that baby products had the highest ROAS across all types of media, while over-the-counter had the lowest. Broken down by media platform, display advertising drove the highest ROAS for baby products, pet products and beverages, while magazine ads garnered the highest ROAS for food, general merchandise, health and beauty, and over-the-counter products.

The type of creative used by a CPG campaign also affected ROAS: Reward/sweepstakes and promotion/coupon ads drove the highest returns, while recipes drove the lowest.