Programmatic Spend Can Increase Marketing Return Up To 22%

Rubicon Project revealed on Thursday new findings of a study focusing on the sales lift marketers can achieve when using programmatic channels.

The study, conducted in connection with The Female Quotient Strategy, showed that marketers, when doubling their programmatic investments, can raise marketing return on investment (MROI) up to 22% and increase sales up to 6%.

"This study found an undeniable correlation between investment in programmatic and significant increases in sales and marketing ROI,” Harry Patz, CRO at Rubicon Project, told Real-Time Daily via email. “Conversely, brands not taking advantage of programmatic are missing out on significant revenue opportunities. We're not advocating an increase in spending, but rather a reallocation of budget to double investment in programmatic ensuring a balanced portfolio."

Examining $20 billion in spending by top U.S. brands that spend on average over $100 million apiece, the report found that to achieve optimal sales and MROI outcomes, programmatic should make up around 10% of total media spend.

Top-line findings from the study:

-- To achieve the optimal marketing balance, marketers should shift on average: TV -3%, Radio -1%, Print -1%, Digital -1%, in order to add 6% to programmatic spend.

-- For brands with a focus on younger consumers, 30% of overall marketing spend should go to digital and programmatic, half of which should be allocated to mobile.

-- Beauty brands do best with video; marketers in this space saw a need to shift over 50% of total budget to mobile and desktop video.

-- Marketers see benefits when shifting spend outside of walled gardens. The report showed a 4.5 lift in top-line sales when moving spend out of Facebook and Google.

2 comments about "Programmatic Spend Can Increase Marketing Return Up To 22%".
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  1. Ed Papazian from Media Dynamics Inc, December 1, 2016 at 2:44 p.m.

    I'm confused. Is "programmatic" a method of planning and buying digital ads or is it a medium? In this report it sounds like a medium. So, if we drop "digital" spend by 1% as well as TV by 3%, radio by 1% and print by 1% and add "Programmatic" with a plus 6% we are at "optimal marketing balance". Huh?. Also fascinating is the "finding" that doubling "programmatic investments"---I assume in digital media---can cause an increase of "up to 6%" in sales. If that's the case, why drop digital spend by 1%?Maybe I'm wrong and "programmatic buying" has morphed, somehow, into an advertising medium after all? Returning to the claim that doubling "programmatic" spend gets you "up to" an increase of 6% in salesĀ  that's interesting. But they aren't promising a 6% sales gain following a 100% increase in "programmatic" spend, are they? Nope, it's "up to 6%", which could mean .05% or 1.0% or 2.75%, or who knows what? I realize that this report is concluding that "programmatic" buying---in digital media?---is the way to go, but doesn't it cost much more money to buy programmatically? And are we assured that whatever targeting efficiency gains we capture the first time around will be repeated year after year?

  2. John Grono from GAP Research, December 1, 2016 at 5:07 p.m.

    This is how dangerous such claims are:
    * I currently spend 2.5% of my budget on programmatic
    * I double that to 5% and I get 6% more sales and 22% more MROI (having the best brand I will get top-shelf results)
    * I double it again to 10% and get 12.4% more sales and 48.8% more MROI
    * Life is so good now I double it again to 20% and sales are up 19.1% and MROI is up 81.6%
    * I'll get the end of year bonus if I double it again to 40% as sales will be up 26.3% and MROI up 122%
    * I'll go to the well once more (but not bet the whole shooting match) to 80% - bingo sales up 33.8% and MROI is astronomic at 170% - I'll be CMO before you know it!

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