Boomtown recently kicked off a new trade ad campaign challenging marketers and buyers to cut through the cliché and invest in regional markets. Their statistics are compelling but it’s their job to sell regional, so they are always going to be. But as someone who independently measures ROI of media day in, day out, I’d have to agree that they are on to something and it’s what we’ve been telling our clients to do more of for years. And now, as budgets are increasingly under pressure, there is even more reason for brands to increase investment in regional markets because channels like TV, for example, can deliver a 32% uplift in ROI versus a metro buy.
Regional markets consistently outperform metro in terms of ROI
Regional advertising consistently outperforms metro at the investment levels of average Australian advertisers. TV and press see the biggest discrepancies in performance between metro and regional placements with an average ROI 32% higher for regional TV than metro, and 33% higher for regional press. In other words, for every dollar spent in regional TV markets, there’s an average $0.32 more that you are getting back versus your investment in a metro market.
These results don’t mean that brands should significantly increase investment into regional markets – everything is measured on a yield curve, which means these results are partially driven by the fact that we see relatively very little investment in regional markets versus metro. As investment increases, we would expect that the gaps between metro and regional decrease, but at the moment, we’re a long way off from this point so there are big gaps. The key recommendation from us would be to invest a little – test, and learn.
Give a little bit, give a little bit of your love to me
Not just a classic Supertramp song, but what I imagine our poor regional markets saying when it comes to advertising investment.
Metro markets take priority over regional markets for the vast majority of brands because that’s where the majority of sales come from, and therefore it’s more important to ensure that there is at least a representative share of investment vs sales in these markets. Further, when budget is limited, there’s a further need to prioritise where the money goes, which means that in many cases, regional investment gets sacrificed to support the Big City. It happens across many investment allocations (as I’m sure our regional based counterparts will be happy to tell us), and so it’s no surprise that it happens in advertising.
But some investment is better than none. We know across all the work we do at Analytic Partners – across the $800b worth of marketing investment we’ve measured globally over the last 24 years - that incremental reach drives ROI. So this means that choosing to invest even in a select few priority regional markets (where viewership is still high), to grow incremental reach simply through a little investment, will have a positive impact on returns.
And a little can go a long way. It’s often much cheaper to buy regional media and you can often buy good placements as supply is greater than demand, so you don’t actually need to invest a lot and you’ll get more back per dollar (as the ROIs indicate) than if you were to invest in a metro region.
We talk a lot about balance in our recommendations to clients – balancing the need to drive sales and overall media efficiency and sometimes it’s a trade off of one over the other. But for regional investment, for many brands it’s not going to be a trade off but a benefit – reaching an audience where you have presence, but don’t normally advertise to but also driving overall ROI, enabling you to support some of your more expensive placements elsewhere. Sounds like a win-win to me.
Jo-Ann Foo, Senior Director at Analytic Partners