Doubling programmatic ad investment could lead to a 6% increase in sales and raise marketing return on investment by as much as 22%. That’s according to new research from Rubicon Project, the ad marketplace, in partnership with The Female Quotient (TFQ) Strategy.
Based on an examination of $20bn in spending from leading US brands, with an average $100m each in ad budgets, the Programmatic Proven study highlights the growing significance of programmatic ad buying.
Programmatic buying impacts brand sales
The study found that by shifting ad budgets just a little around, brands can free up budgets to allocate to programmatic. Those who spend over $35m in advertising should allocate 8% of their expenditure towards programmatic in order to yield better returns.
For optimal returns, digital and programmatic should make up over 20% of a large brand’s total ad spend. Direct response campaigns should be allocated 25% in programmatic and digital, which includes mobile.
Build your brand using programmatic
For those who have been spending all their budgets on Google and Facebook ads it’s time to move over to some other services, which could result in a 3x sales lift. Indeed, the impact of these two ad behemoths within programmatic is significantly lower than for digital. Google and Facebook programmatic ad dollars were limited to 13% and 11% respectively.
Google and Facebook combined spend share for programmatic versus digital
Millennials and younger audiences are now spending up to 90 hours per month on their mobile apps. If brands want to reach these consumers via mobile ads, they should allocate digital and programmatic spend to make up at least 30% of their total marketing ad spend with half focused on mobile.
Ad spend by age
Factoring age into a campaign is always a good idea. However, for mobile, in-app ad spend should generally receive the highest budget allocation irrespective of age. Indeed, mobile in-app and web video produced the biggest impact for campaigns whilst banners trailed behind.
Best allocation of mobile budget
Rubicon Project took a closer look at brand categories to find out which formats drove the best audience engagement and ultimately the largest growth in sales. Entertainment topped the chart for mobile video ad spend, followed by financial services, automobile and Consumer Product Goods.
Overall, video was found to be underrepresented in terms of frequency. Rubicon Project recommends that advertisers should double the frequency to achieve an increase in sales.
Programmatic mobile video across categories
Mobile did drive the largest share in social ad spend allocation. However, it was generally found to be more impactful for lower funnel loyalty campaigns as opposed to brand building.
Mobile banner social spend great for lower funnel loyalty
Harry Patz, Chief Revenue Officer at Rubicon Project, concludes:
“This study of some of the largest brands in the world very clearly showcases that advertisers who are underinvested in programmatic will miss out on significant revenue opportunities. By reallocating advertising budgets to double investment in programmatic, our data shows that brands will see a significant uptick in increased sales and marketing ROI, compared to those who do not. This is not about spending more, it’s about spending smarter – having the right mix of programmatic and digital ad spending is key to a balanced portfolio in today’s environment.”