Mix online and offline advertising for best return

The project, led by Dr Grace Kite, economist and founder of Magic Numbers, found that revenue per pound was at its highest when there was a mixture of offline and online advertising in a campaign, a trend that was maintained across both smaller and larger organisations.

Return on investment also steadily increased when the proportion of campaign spending online increase from zero to 30%.

The research found that for every £1 invested in marketing, there was a return of £3.80, with a general trend of increased effectiveness in advertising campaigns over the past five years.

The ARC project is based on effectiveness data and insights from 343 campaigns using effectiveness modelling, which together accounted for £5bn worth of advertising spend.

The project found a significant shift between 2005 and 2016 of the amount of investment being allocated to online channels, but that the proportion of online advertising spend had stabilised from 2016 onwards.

Display advertising online halved as a proportion of overall spending on internet advertising, falling from 50% in 2016 to 25% in 2019.

Paid social had also expanded to match that spend on paid search, according to the ARC.

Kite said: “Our ARC work shows that advertising works, that we understand the online channels better than we ever have.”

Janet Hull, director of marketing strategy at the Institute of Practitioners in Advertising (IPA) and executive director at IPA EffWorks, said: “The early indications are that this work is a helpful addition to the IPA toolbox of effectiveness learning and we are already in talks about how the IPA can give credibility to this initiative and help to widen participation.”