Advertisers Leaving Money on the Table


This spring we noted an AT&T case study that found print had four times the ROI of TV. At the time, FIPPs’ Guy Consterdine advised that “magazines should be allocated a higher share of the advertising budget than they usually receive,” noting that the researchers found the return on print magazine ads to be far greater than expected in boosting awareness.

Now, Guy is back with a great explanation of the high ROI of magazines, and he’s again urging advertisers to carefully reconsider their ad budget allocations.

“In general, as more ad expenditure pours into a given medium, the sales generated by the last tranche of money becomes less than the sales generated by the same amount of money spent earlier. Eventually the situation is reached where spending yet more money in the medium produces little effect or even no effect at all,” he notes.

“By that stage, it would have been better to have spent the last amounts of money in a different medium which was still producing good returns for additional expenditure,” Consterdine continues.

What often happens, he explains, is that ad budgets spend heavily on digital and TV, with “little left over for other media including magazines.” But when those campaigns are analyzed, it’s being found that “television (in particular) has reached a relatively flat section of its diminishing returns curve, while magazines with their low level of expenditure are still on the steeply rising part of their curve.”

“What this means is that if the last portion of the budget allocated to television was spent in magazines instead, greater net sales would be generated. The relatively small loss of sales from TV advertising due to the switching of that money would be much more than offset by the extra sales generated by that money being spent in magazines,” he explains.

This sliding scale approach makes absolute sense. Throwing more money at diminishing digital or TV returns will do nothing but add to the noise. And there is clearly room for revenue growth in under-invested channels like print magazines. Consterdine does a great job of providing the research and case findings for his advice, always helpful when justifying any ad budget.

The bottom line is most of the campaigns analyzed could be show better results if more resources were allocated to print magazine advertising. True story.