Nielsen: Internet Marketing Can Top Traditional Models

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Not all paid media dollars expect a lift in consumer product revenue. Sometimes brands need to weight more promotional price discounting and Internet buzz into the mix. This is among the results of a Nielsen study looking at marketing of products in Asia-Pacific, the Middle East and Africa.

For these products, mass media spending was 16% more than average and commanded an average of 31% higher share of category spending.

Nielsen noted: “Some above-the-line investments can actually hurt profitability and brand value.. Internet-based marketing and that which generates buzz among consumers can often be more valuable than traditional marketing models.”

Also, price discounting of products can help. It says some advertised brands get 32% more responsiveness -- encouraging more buyers to buy. Plus, these brands get a third less resistance when prices are raised later.

Also, Nielsen says as digital media becomes prevalent, online “buzz” or advocacy becomes more important -- it can be a good kick-start to sales performance.

This is not to say paid-media doesn’t do its job. Nielsen says brands that advertise see stronger loyalty in the form of more category spending, some 31% higher. In evaluating return on investment, advertisers need to understand the precise return for every dollar invested in marketing activities. The study found that Internet media generated a return of $1.29, almost twice that of TV.

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3 comments on "Nielsen: Internet Marketing Can Top Traditional Models".

1. Kevin Bullard from ILFUSION Creative
   

   commented on: March 30, 2012 at 9:06 a.m.
   Please read that last sentence, TV Station owners...
2. John Grono from GAP Research
   

   commented on: March 30, 2012 at 9:05 p.m.
   Interesting point Kevin. Following up what I would like to see is, rather than a single "all brands" average, a segmentation into (say) big, medium and small brands and then to see the total investment and the ROI. It seems from the comments abover the $1.29 sentence that 'advertised' brands have higher category spend (and indicator of brand size). As everyone knows ... to become big you have to spend - advertising, distribution, promotion, so it could be a case of relative returns.
3. Dimitris Tsioutsias from Targetbase
   

   commented on: April 3, 2012 at 10:13 a.m.
   ROI does not equate Effectiveness. Basing a media strategy purely on ROI can hurt sales volume and cash flow. It really depends on the business model and the category: an e-commerce business like Expedia places different value to internet media than Olive Garden.

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