With today's increasingly price-conscious consumers, there is ample room for improvement in advertising efficiency: The ratio of average short-term return on marketing investment––sales within three months of media execution––is $1.09 for each dollar spent, according to a recent study by Nielsen.
That's just a 9% return.
On average, however, advertising effectiveness could be increased 30-40%, the study finds, if companies take a closer look at how well each media and promotion type works for each brand.
The ROI for different marketing tactics varies. The top 5 (average short-term return) are as follows:
- Online ads: $2.18 for each dollar spent
- Co-op programs: $1.74
- Promotions: $1.19
- Magazines: $1.12
- Public relations: $1.05
