L’Oreal Regional TV case study November 2011. RTM is the marketing bureau for Regional free to...
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Transcript of L’Oreal Regional TV case study November 2011. RTM is the marketing bureau for Regional free to...
L’Oreal
Regional TV case study
November 2011
www.regionaltvmarketing.com.au
RTM is the marketing bureau for Regional free to air TV
RTM reviewed L’Oreal regional skin care sales and TV ROI for 13 months to July
• 33% of L’Oreal and Garnier sales come from regional markets and up to 37% for mature age brands – in line with regional population
• L’Oreal regional BDI improved 10% vs. metro following increased share of TV $ to RTV
• RTV demonstrably more effective when used at same weights to metro
• RTV driving 40% to 50% of launch sales
PLAY TALKING REGIONAL VIDEO
Regional TV covers all areas outside capital
cities and reaches 36% of
populationQLD
NNSW
SNSW
TAS
VIC
REG. WA
DIARY
Regional TV coverage
includes large cities and fast
growing coastal suburbs
Newcastle & Central Coast
Gold Coast
Wollongong & Illawarra
Canberra
Populations of major regional TV markets are comparable with the metros
SydneyMelbourne
Reg NSWBrisbane
PerthReg QLDAdelaideReg VIC
DiaryWATAS
0m 1m 2m 3m 4m 5m
4,6354,528
3,4892,982
1,8561,764
1,4081,171
969585
510
People
Source: ATR & OZTAM 2011, Nielsen Media Research 2010
NNSW 2,079
SNSW 1,410
Population Increase: 2001 vs. 2011
Source: ATR & OZTAM 2011
Australian population moving North and to the coast. Over 30% growth in 10 years in some regional areas
MARYB
MACKA
YBRIS
NOR RIV
CAIRNS
TOW
NS
PERTH
ROCK
TOOW
CANB
GIPPS M
EL
TAM/T
AR
ALBURY
WOLL
BALLSY
DADEL
NEWC
HOBART
BEND
LAUNCE
SHEP
P
O/D/W
0%5%
10%15%20%25%30%35%40%45%
National average
QLD NSW VIC TAS METRO
Urbanisation and high population growth changing the profile of regional Australia
• Seachange: Baby boomers and young families
• Lower cost of living and lifestyle are main attractions
• Rural populations moving to regional hub towns
• Less than 4% of households depend on farming
Regional consumers’ willingness to spend grew this year slightly this year against “national” trend
2006 2007 2008 2009 2010 20110
50
100
150
200
250
300
350
Metro
Spending per discretionary $1000
Source: foreseechange 2005 – 2010 annual average, 2011 June & November 2011 survey
average
Average household incomes in regional TV markets are within 10% of national average
Regional Metro
NNSW $89,690 Sydney $112,380
SNSW $102,500 Melbourne $101,840
Victoria $84,470 Brisbane $104,970
Queensland $95,080 Adelaide $91,530
Tasmania $84,170 Perth $119,600
Rural $106,690
Source: Roy Morgan Single Source (12mths to Mar 2011 )
P25-54: Average household Income
Regional consumers are more optimistic about their current financial outlook…
…and are more likely to spend on discretionary items over the coming year.
Regional women attitudes and purchasing of
skincare are the same as metro
Source: Roy Morgan Single Source (12mths to March 2011)
Women aged 25-39: Met Reg
Children in Household 59% 70%
I have favourite brands for most things I buy 70% 69%
Sun Protection Factor (important criteria for skin care)
33% 33%
Moisturising Benefits (important criteria for skin care)
37% 41%
Purchased skincare P6M 73% 71%
Metro Regional0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
15% 16%
17% 16%
11% 11%5% 5%6% 6%5% 5%6% 5%4% 3%3% 3%5% 5%
24% 25%Other BrandsVaselineClean&ClearJohnson'sNeutrogenaClearasilGarnierDoveL'OrealNivea BrandOlay
Brand shares of total category sales: June 2010 to July 2011
L’Oreal average regional and metro share of total skin care sales are the same
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT)
33%of all L’Oreal
Australian Skincare sales are from
regional consumers
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT)
L’Oreal share of skin care in Reg. NSW and TAS is above average
Total L’Oreal share of total skin care category sales: June 2010 to July 2011
SYD
MEL BR
IAD
EPE
R
NNSWSN
SW VIC
QLD TAS
SA/W
A0%
2%
4%
6%
8%
10%
12%
14%
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT)
L’Oreal regional sales are 33% of national total – but Reg. NSW is more significant & TAS/WA/SA value above ADE
SYD
BRI
PER
VIC
TAS
$0.0m $1.0m $2.0m $3.0m $4.0m $5.0m $6.0m $7.0m $8.0m
7564
6907
4593
1622
3466
5286
1377
2605
730
1284
Total L’Oreal Skin Care sales: June 2010 to July 2011
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT)
W/E 04/07/10
W/E 01/08/10
W/E 29/08/10
W/E 26/09/10
W/E 24/10/10
W/E 21/11/10
W/E 19/12/10
W/E 16/01/11
W/E 13/02/11
W/E 13/03/11
W/E 10/04/11
W/E 08/05/11
W/E 05/06/11
W/E 03/07/11
W/E 31/07/11
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
$0.0m
$0.2m
$0.4m
$0.6m
$0.8m
$1.0m
$1.2m
Metro TV Regional TV Metro
4 weeks to W/E
Total L’Oreal share of total Skin care sales vs. TV Spend
June 2010 – July 2011Total TV: $6.5mReg share: 14%
L’Oreal share of regional markets improved relative to national trend over the year
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Cate
gory
share
by
valu
eTV
spend
W/E 04/07/10
W/E 01/08/10
W/E 29/08/10
W/E 26/09/10
W/E 24/10/10
W/E 21/11/10
W/E 19/12/10
W/E 16/01/11
W/E 13/02/11
W/E 13/03/11
W/E 10/04/11
W/E 08/05/11
W/E 05/06/11
W/E 03/07/11
W/E 31/07/11
0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%
$0.0m
$0.2m
$0.4m
$0.6m
$0.8m
$1.0m
$1.2m
Metro TV Regional TV Metro
4 weeks to W/E
L’Oreal Youth Code share of total Facial Moisturisers/Specialist sales vs. TV Spend
June 2010 – July 2011Total TV: $2.1mReg share: 16%
L’Oreal Youth Code drove much of the growth and regional consumers particularly responsive to TV.
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Cate
gory
share
by
valu
eTV
spend
W/E 04/07/10
W/E 01/08/10
W/E 29/08/10
W/E 26/09/10
W/E 24/10/10
W/E 21/11/10
W/E 19/12/10
W/E 16/01/11
W/E 13/02/11
W/E 13/03/11
W/E 10/04/11
W/E 08/05/11
W/E 05/06/11
W/E 03/07/11
W/E 31/07/11
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
$0.0m
$0.2m
$0.4m
$0.6m
$0.8m
$1.0m
$1.2m
Metro TV Regional TV Metro
4 weeks to W/E
L’Oreal Revitalift share of total Facial Cleanser/Moisturisers/Specialist sales vs. TV Spend
June 2010 – July 2011Total TV: $1.4mReg share: 24%
L’Oreal Revitalift share declined but was very responsive to higher TV activity in 2011
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Cate
gory
share
by
valu
eTV
spend
W/E 04/07/10
W/E 01/08/10
W/E 29/08/10
W/E 26/09/10
W/E 24/10/10
W/E 21/11/10
W/E 19/12/10
W/E 16/01/11
W/E 13/02/11
W/E 13/03/11
W/E 10/04/11
W/E 08/05/11
W/E 05/06/11
W/E 03/07/11
W/E 31/07/11
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
$0.0m
$0.2m
$0.4m
$0.6m
$0.8m
$1.0m
$1.2m
Metro TV Regional TV Metro
4 weeks to W/E
L’Oreal Age Perfect Clean share of total Facial Cleanser sales vs. TV Spend
June 2010 – July 2011Total TV: $497kReg share: 16%
L’Oreal Perfect Clean achieved exceptional launch success in regional markets from TV advertising
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Cate
gory
share
by
valu
eTV
spend
RO 3Ix
L’Oreal skin care
Annual sales
TV Spend
ROI
Metro $24.2 $5.6m $4.32
Regional $11.3m $883k $12.80
Cost efficiency and ROI from L’Oreal regional TV is 3 times better than metro TV
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
L’Oreal TV advertising ROI by market
Markets Annual sales
TV Spend ROI
SYD $7.6m $2.3m $3.29
MEL $6.9m $1.5m $4.55
BRI $4.6m $910k $5.05
ADE $1.6m $427k $3.80
PER $3.5m $474k $7.31
NNSW $2.7m $316k $8.51
SNSW $2.6m $247k $10.51
VIC $1.4m $70k $19.68
QLD $2.6m $224k $11.63
TAS $730k $0 --
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Total Garnier regional sales are 32% of national
SYD
BRI
PER
VIC
TAS
$0.0
m
$0.5
m
$1.0
m
$1.5
m
$2.0
m
$2.5
m
$3.0
m
$3.5
m
$4.0
m
$4.5
m
Total Garnier Skin Care sales: June 2010 to July 2011
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT)
Garnier share of regional skin care varies only slightly by market but TAS below average
Total Garnier share of total skin care category sales: June 2010 to July 2011
SYD
MEL BR
IAD
EPE
R
NNSWSN
SW VIC
QLD TAS
SA/W
A0%
1%
2%
3%
4%
5%
6%
7%
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT)
W/E 04/07/10
W/E 01/08/10
W/E 29/08/10
W/E 26/09/10
W/E 24/10/10
W/E 21/11/10
W/E 19/12/10
W/E 16/01/11
W/E 13/02/11
W/E 13/03/11
W/E 10/04/11
W/E 08/05/11
W/E 05/06/11
W/E 03/07/11
W/E 31/07/11
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
$0.0m
$0.2m
$0.4m
$0.6m
$0.8m
$1.0m
$1.2m
Metro TV Regional TV Metro
4 weeks to W/E
Total Garnier share of total Skin care sales vs. TV Spend
June 2010 – July 2011Total TV: $3.2mReg share: 16%
Garnier share of regional skin care grew strongly in 2011
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Cate
gory
share
by
valu
eTV
spend
W/E 04/07/10
W/E 01/08/10
W/E 29/08/10
W/E 26/09/10
W/E 24/10/10
W/E 21/11/10
W/E 19/12/10
W/E 16/01/11
W/E 13/02/11
W/E 13/03/11
W/E 10/04/11
W/E 08/05/11
W/E 05/06/11
W/E 03/07/11
W/E 31/07/11
0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%
$0.0m
$0.2m
$0.4m
$0.6m
$0.8m
$1.0m
$1.2m
Metro TV Regional TV Metro
4 weeks to W/E
Garnier Body Intensive 7 Days share of total Body Moisturisers sales vs. TV Spend
June 2010 – July 2011Total TV: $602kReg share: 13%
Garnier Body Intensive was a successful launch in regional markets – approx. 50% of sales growth from RTV
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Cate
gory
share
by
valu
eTV
spend
W/E 04/07/10
W/E 01/08/10
W/E 29/08/10
W/E 26/09/10
W/E 24/10/10
W/E 21/11/10
W/E 19/12/10
W/E 16/01/11
W/E 13/02/11
W/E 13/03/11
W/E 10/04/11
W/E 08/05/11
W/E 05/06/11
W/E 03/07/11
W/E 31/07/11
0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%
$0.0m
$0.2m
$0.4m
$0.6m
$0.8m
$1.0m
$1.2m
TAS TV Regional TV TAS
4 weeks to W/E
Garnier Body Intensive 7 Days share of total Body Moisturisers sales vs. TV Spend
June 2010 – July 2011Total Reg TV: $78K
RTV not used for Garnier Body Intensive in TAS – launch share half of active markets and appears to be declining
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Cate
gory
share
by
valu
eTV
spend
RO 2.5IxCost efficiency and ROI from Garnier regional TV is 2.5 times better than metro TV
Garnier skin care
Annual sales
TV Spend
ROI
Metro $12.9m $2.7m $4.78
Regional $6.1m $518k $11.78
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Garnier: ROI by Metro + Agg Markets
Markets Annual sales
TV Spend ROI
SYD $3.9m $1.3m $2.89
MEL $3.8m $861k $4.37
BRI $2.6m $514k $5.15
ADE $907k $198k $4.58
PER $1.7m $261k $6.46
NNSW $1.5m $174k $8.52
SNSW $1.3m $144k $9.06
VIC $830k $92k $9.02
QLD $1.5m $175k $8.76
TAS $317k $0 --
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Guthy Renker
Olay
L'Oreal
Nivea
Neutrogena
Garnier
Clean&Clear
Vaseline
Clearasil
Dove
Grand Total
48%
18%
14%
18%
15%
16%
20%
14%
0%
8%
20%
MTV% RTV%
Regional TV share of skin care brands’ national TV budgets has grown but opportunities remain
Regional TV share of skin care brands’ national TV budgets has grown but opportunities remain
Source: Nielsen Media Research AdExCategory: Skin Care - All
Total TV Spend
$5.4m
$5.1m
$6.5m
$5.9m
$3m
$3.2m
$358k
$2m
$926k
$1.6m
$34m
Period: w/c 13/6/10 to w/c 31/7/11
W/E 04/07/10
W/E 01/08/10
W/E 29/08/10
W/E 26/09/10
W/E 24/10/10
W/E 21/11/10
W/E 19/12/10
W/E 16/01/11
W/E 13/02/11
W/E 13/03/11
W/E 10/04/11
W/E 08/05/11
W/E 05/06/11
W/E 03/07/11
W/E 31/07/11
0.0%2.0%4.0%6.0%8.0%
10.0%12.0%14.0%16.0%18.0%
$0.0m
$0.2m
$0.4m
$0.6m
$0.8m
$1.0m
$1.2m
Metro TV Regional TV Metro
4 weeks to W/E
Olay share of total Skin care sales vs. TV Spend
June 2010 – July 2011Total TV: $5.1mReg share: 18%
Olay maintains higher share of regional skin care sales through consistently strong suppport
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Cate
gory
share
by
valu
eTV
spend
W/E 04/07/10
W/E 01/08/10
W/E 29/08/10
W/E 26/09/10
W/E 24/10/10
W/E 21/11/10
W/E 19/12/10
W/E 16/01/11
W/E 13/02/11
W/E 13/03/11
W/E 10/04/11
W/E 08/05/11
W/E 05/06/11
W/E 03/07/11
W/E 31/07/11
0.0%2.0%4.0%6.0%8.0%
10.0%12.0%14.0%16.0%18.0%20.0%
$0.0m
$0.2m
$0.4m
$0.6m
$0.8m
$1.0m
$1.2m
Metro TV Regional TV Metro
4 weeks to W/E
Nivea share of total Skin care sales vs. TV Spend
June 2010 – July 2011Total TV: $5.9mReg share: 18%
Nivea share recovered in 2011 especially in regional with boost in RTV
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Cate
gory
share
by
valu
eTV
spend
Garnier Body Intensive
Garnier Pure Active
Garnier UltraLift
Age Re-Perfect
DE Revitalift
DE UV Perfect
Men Expert
Perfect Clean
Youth Code
Grand Total
13%
17%
14%
21%
24%
12%
0%
16%
16%
14%
MTV% RTV%
Regional TV share higher for L’Oreal youth and mature brandsRegional TV share higher for L’Oreal youth and mature brands
Source: Nielsen Media Research AdExCategory: Skin Care - All
Period: w/c 13/6/10 to w/c 31/7/11
Total TV Spend
$602k
$2.3m
$815k
$308k
$1.4m
$653k
$1.6m
$497k
$2.1m
$10.3m
Regional women 55+ are affluent consumers
and just as engaged with skincare
Women aged 55+ Met Reg
Favourite brands for most things 65% 68%
Moisturising Benefits (criteria for skin care)
48% 47%
Anti-aging Benefits (criteria for skin care)
27% 25%
Purchased skincare P6M 70% 67%
Source: Roy Morgan Single Source (12mths to March 2011)
L’Oreal Revitalift regional sales are 35% of national
SYD
BRI
PER
VIC
TAS
$0.0m $0.5m $1.0m $1.5m $2.0m
Total L’Oreal Revitalift Skin Care sales: June 2010 to July 2011
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT)
Garnier Ultra Lift regional sales are 37% of national
SYD
BRI
PER
VIC
TAS
$0.0
m
$0.1
m
$0.2
m
$0.3
m
$0.4
m
$0.5
m
$0.6
m
$0.7
m
$0.8
m
$0.9
m
Total Garnier Ultra Lift Skin Care sales: June 2010 to July 2011
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT)
Men aged 18-39 Met Reg
Household income $50k+ 50% 56%
Children in Household 38% 45%
Favourite brands for most things I buy 66% 68%
Moisturising Benefits (criteria for skin care) 16% 18%
Purchased skincare P6M 37% 33%
Source: Roy Morgan Single Source (12mths to June 2011)
Regional men are just as relevant to L’Oreal skincare
Male skin care category development in Reg QLD, SNSW and rural in line with Sydney / Melb
SYD
MEL BR
IAD
EPE
R
NNSWSN
SW VIC
QLD TAS
Diary
0%5%
10%15%20%25%30%35%40%45%
% of Men 18-39 who purchased skincare P6M
Source: Roy Morgan Single Source 12 months to June 2011
W/E 04/07/10
W/E 01/08/10
W/E 29/08/10
W/E 26/09/10
W/E 24/10/10
W/E 21/11/10
W/E 19/12/10
W/E 16/01/11
W/E 13/02/11
W/E 13/03/11
W/E 10/04/11
W/E 08/05/11
W/E 05/06/11
W/E 03/07/11
W/E 31/07/11
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
$0.0m
$0.2m
$0.4m
$0.6m
$0.8m
$1.0m
$1.2m
Metro TV Regional TV Metro
4 weeks to W/E
L’Oreal Men Expert share of total Facial Cleanser/Moisturisers/Specialist sales vs. TV Spend
June 2010 – July 2011Total TV: $1.6mReg share: 0%
L’Oreal Men Expert is less popular in regional
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Cate
gory
share
by
valu
eTV
spend
W/E 04/07/10
W/E 01/08/10
W/E 29/08/10
W/E 26/09/10
W/E 24/10/10
W/E 21/11/10
W/E 19/12/10
W/E 16/01/11
W/E 13/02/11
W/E 13/03/11
W/E 10/04/11
W/E 08/05/11
W/E 05/06/11
W/E 03/07/11
W/E 31/07/11
0%
1%
2%
3%
4%
5%
$0.0m
$0.2m
$0.4m
$0.6m
$0.8m
$1.0m
$1.2m
Metro TV Regional TV Metro
4 weeks to W/E
Nivea Men share of total Skin care sales vs. TV Spend
June 2010 – July 2011Total TV: $733kReg share: 4%
Nivea Men has similar share in regional to metro
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Cate
gory
share
by
valu
eTV
spend
W/E 04/07/10
W/E 01/08/10
W/E 29/08/10
W/E 26/09/10
W/E 24/10/10
W/E 21/11/10
W/E 19/12/10
W/E 16/01/11
W/E 13/02/11
W/E 13/03/11
W/E 10/04/11
W/E 08/05/11
W/E 05/06/11
W/E 03/07/11
W/E 31/07/11
0.0%
0.1%
0.2%
$0.0m
$0.2m
$0.4m
$0.6m
$0.8m
$1.0m
$1.2m
Metro TV Regional TV Metro
4 weeks to W/E
Dove Men Care share of total Skin care sales vs. TV Spend
June 2010 – July 2011Total TV: $518kReg share: 18%
Dove Men Care had widespread regional TV support and achieved similar market share as metro
Source: Scan Data (4 W/E 04/7/10 to 31/7/11) Coles /Woolworths/Bi Lo (Excludes NT), Adquest Millennium
Cate
gory
share
by
valu
eTV
spend
Increasing regional TV share of national budget will boost sales growth and advertising ROI
• Adding new regional markets will boost growth
• ROI for regional TV will boost overall campaign return
• Equal weights in all markets would require approx. 23% of total TV budget
• …and will deliver 35% or more of national sales and 40% or more of national growth
Vaseline case study objectives
• Identify key media drivers of sales.• Measure response to media activity in Regional vs. Metro
areas• Generate predictive models enabling insight into budget
allocation across channels and regions.• Measure impact of Vaseline price and distribution.• Identify competitive impact:
– Price/Distribution– Advertising
Project Scope
• Product: Vaseline Hand and Body Range
• Key Metric: Total Vaseline baseline sales in Woolworths
• Time Period: 2008 through to end of 2010
• Interval: Weekly
• Number of Periods:148
• Geography: Sydney, NNSW, SNSW, Melbourne, Regional VIC, Brisbane, Regional QLD, Tasmania
Key findings summary
• The study found a re-alignment of TV market investment using the same 2010 TV budget could increase annual TV generated sales by 38%.
• And improve ROI by 43%• The model recommends 40% share of
total TV budget should be allocated to regional markets to achieve this outcome
• TV flighting patterns in regional are optimal with continuous lower weights
Media Investment Summary 2008 – 2010
Eastern Regional Aus
Variables Tested Strong Sales Influencer?
TV
Magazines
Radio
Press
Digital
Vaseline Price
Vaseline Distribution
Competitive Advertising
Competitive Price
Competitive Distribution
Weather Indicators
Economic Indicators
Public Holidays
Catalogue Placements
Consumer Competitions
These variables
help explain
over 80% of
Woolworths sales
variation.
Variables Tested
aaa
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a
a
Model vs. ActualModel is highly accurate: Sales 90.7%
4/02/2008 2/06/2008 29/09/2008 26/01/2009 25/05/2009 21/09/2009 18/01/2010 17/05/2010 13/09/2010-40000
-20000
0
20000
40000
60000
80000
100000
120000
140000
Outlier Actual Model
Sale
s $
NSW, VIC, QLD & TAS
TV drives the majority (67%) of advertising generated Vaseline sales
4/02
/200
8
21/0
3/20
08
6/05
/200
8
21/0
6/20
08
6/08
/200
8
21/0
9/20
08
6/11
/200
8
22/1
2/20
08
6/02
/200
9
24/0
3/20
09
9/05
/200
9
24/0
6/20
09
9/08
/200
9
24/0
9/20
09
9/11
/200
9
25/1
2/20
09
9/02
/201
0
27/0
3/20
10
12/0
5/20
10
27/0
6/20
10
12/0
8/20
10
27/0
9/20
10
12/1
1/20
100
5
10
15
20
25
TV Mags Radio Digital OOH In-Store
Sale
s ($
‘000)
TV Radio OOHMagazine
s Digital Press
% of Adsales 67% 8% 4% 14% 7% NA
% of Budget 79% 2% 2% 12% 4% 0.3%
2008 2009 2010
Over the period of the study regional areas deliver 38% of advertising generate sales for only 16% of budget and hence better ROI compared to metro areas.
Melbourne and Sydney have a greater capacity to generate high volume sales but require large levels of spend
Region Spend Sales Generated ROI
Overall 4.9 mill 100% 100
Sydney 1.96 mill 26% 71
Melbourne 1.2 mill 21% 86
Brisbane 891K 15% 86
NNSW 197K 7% 186
SNSW 190K 11% 286
RQLD 200K 11% 271
RVIC 142K 6% 214
Tasmania 74K 2% 143
Adstock investment in regional areas during trial was less than optimal
020
0040
0060
0080
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4200
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1400
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1800
Predicted sales driven by weekly TV Adstock levels
Sydney Melb Bris NNSW SNSW RQLD RVIC TAS
Weekly Adstock
Sa
les $
= Average Weekly Adstocks
Adstock investment in regional areas should be increased to maximise total advertising generated sales.
020
0040
0060
0080
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4200
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0
5000
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400
600
800
1000
1200
1400
1600
1800
Predicted sales driven by weekly TV Adstock levels
Sydney Melb Bris NNSW SNSW RQLD RVIC TAS
Weekly Adstock
Sa
les $
= Average Weekly Adstocks
RegionCurrent Adstock
Possible Mix% of weekly
budget
Sydney 42K 20K 18.59%
Melbourne 28K 24.6K 22.86%
Brisbane 19.5K 19K 17.66%
NNSW 4.8K 10K 9.29%
SNSW 3.9K 10K 9.29%
RQLD 4.9K 13K 12.08%
RVIC 3.2K 7K 6.51%
Tasmania 1.3K 4K 3.72%
Total 108K 108K
Optimum allocation to Regional TV is 41% of total TV budget
Using 2010 TV, the model suggests that annual TV generated sales could be increased by 38% by adopting a more continuous flighting pattern and improving spend allocation by region. ROI would improve by 43%
0
1000
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Proposed Flighting and TV Budget Split – Compared to 2010Investment Projected TV Sales2010 TV Sales
Sale
s $
Investm
en
t $
Syd Melb Bris NNSW SNSW RQLD RVIC TASTotal
Spend ROI
2010 Spend 43% 23% 17% 4% 4% 4% 4% 1% 1.78mill 100
Potential Spend 19% 23% 18% 9% 9% 12% 7% 4% 1.78mill 143
41% annual increase
Due to higher decay in regional areas, a continuous flighting pattern may be more appropriate. Whereas in Sydney where advertising decay is lower, a large burst followed by shorter ones is most efficient.
Region
2010 Spend
2010 Rev.
2010 ROI
Poss.Spend
Approx
Rev.ROI
Sydney
762K 36K 0.047c 331K 16K 0.048c
Region
2010 Spend
2010 Rev.
2010 ROI
Poss.Spend
Approx
Rev.ROI
NNSW 71K 9.6K 0.14c 165K 22.8K 0.14c
Region2010 Spend
2010Rev.
2010ROI
Poss.Spend
ApproxRev. ROI
SNSW 70K 14.6K 0.21c 166K 33K 0.2c
Region2010 Spend
2010 Rev.
2010 ROI
Poss.Spend
ApproxRev. ROI
TAS 25K 2.8K 0.11c 66K 7K 0.11
Invest
men
t
Sale
s
Week Number
Invest
men
t
Sale
s
Week Number
Invest
men
t
Sale
s
Week Number
Invest
men
t
Sale
s
Week Number
Region2010 Spend
2010 Rev.
2010 ROI
Poss.Spend
ApproxRev. ROI
Melb 408K 26K 0.063c 407K 27.5K 0.07c
Region2010 Spend
2010 Rev.
2010 ROI
Poss.Spend
ApproxRev. ROI
Bris 306K 19.1K 0.063c 314K 22.9K 0.07c
Region2010 Spend
2010 Rev.
2010 ROI
Poss.Spend
ApproxRev. ROI
RVIC 65K 9.3K 0.14c 116K 17.7K 0.15c
Region2010 Spend
2010 Rev.
2010 ROI
Poss.Spend
ApproxRev. ROI
RQLD 75K 14.5K 0.19c 215K 39K 0.18c
Melbourne may also benefit from shorter more concentrated bursts of activity resulting from higher point of diminishing returns compared to Brisbane and regional areas.
Invest
men
t
Sale
s
Week Number
Invest
men
t
Sale
s
Week Number
Invest
men
t
Sale
s
Week Number
Invest
men
t
Sale
s
Week Number
Overall Radio achieved the strongest ROI but this is based on limited data points. Total media return on investment is $0.08 (NB WW sales only). Regional TV achieved the next best ROI after Radio.
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
$0.08
$0.32
$0.14 $0.13
$0.09$0.07 $0.06
$0.16
Return on Investment SummaryWW Sales Only
Dollars
Potential ROI from optimised TV investment
is $0.10
Key findings summary
• The study found a re-alignment of TV market investment using the same 2010 TV budget could increase annual TV generated sales by 38%.
• And improve ROI by 43%• The model recommends 40% share of
total TV budget should be allocated to regional markets to achieve this outcome
• TV flighting patterns in regional are optimal with continuous lower weights