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ROI Rises When Advertisers Commit to Higher Media Spend, Study Shows

Although it’s no secret that dedicating more resources to advertising can lead to increased ad spend ROI, many businesses are hesitant to do so for fear of overspending. But a new study has shown that when companies commit to spending more on media, their return on investment actually goes up. So if you’re looking for ways to boost your ad spend ROI, increasing your media budget may be the answer.


The Rise in Yearly Media Spend


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As advertising budgets have increased in recent years, so too has the return on investment (ROI) that businesses are seeing from their media spend.

The sharpest rise takes place between a yearly media spend of $2.1m and $10.5m, where ad spend ROI rises from $2.10 to $8.43. Ad spend ROI then increases steadily to a peak of approximately $13.70, which is achieved when advertisers spend in the region of $31.6m.

There are a number of factors that contribute to this increase in ad spend ROI as media budgets grow.

  • Firstly, businesses are able to reach a wider audience as they are able to afford more high-profile placements. This not only increases brand awareness but also drives more traffic to their website or store.

  • Secondly, businesses are able to target their advertising more effectively as they have a larger budget to work with. They can A/B test different ad copy and placements to see what works best with their target audience.

Where does ad spend cap out?

It’s no secret that advertising spending can have a big impact on a company’s bottom line. But what is the point at which further ad spending becomes counterproductive? In other words, where does ad spend cap out?

A recent study sought to answer this question and found that there is a point of diminishing returns when it comes to ad spend ROI. The study found that ad spend ROI begins to tail off as advertisers increase spending above $31.6m, suggesting that it is not beneficial to the ad spend ROI to spend more than $31.6m yearly on advertising.

Of course, every company is different, and there are many factors to consider when setting an advertising budget. But this study provides valuable insight into how much is too much when it comes to ad spending.

If you’re wondering how much you should be spending on advertising, consider this study’s findings and use them to inform your decision-making. Remember, there is such a thing as too much of a good thing – and that applies to advertising spend, too.


What are the Best Practices for Ads?

What are the best practices for marketing? This is a question that every advertiser should be asking themselves on a regular basis. There are a number of factors to consider when it comes to crafting an effective ad campaign, and the best practices for marketing can vary depending on the products or services being offered, the target audience, and the overall goals of the business.

That said, there are some general best practices for marketing that all businesses should keep in mind when planning their next ad campaign. Here are a few of the most important ones:

Review and Reset Benchmarks Regularly

In order to gauge the effectiveness of your ad campaigns, you need to have some sort of benchmark to compare them against. However, these benchmarks should not be set in stone. As your business grows and changes, so too should your benchmarks. Regularly review your benchmarks and reset them as needed to ensure that they are still relevant and accurate.


Build A First-Party-First Strategy

In today’s digital world, data is everything. And when it comes to advertising, businesses need to be strategic about the data they collect and how they use it. One of the best ways to do this is by building a first-party-first strategy. This means collecting data directly from your customers through things like surveys and customer loyalty programs. This data can then be used to create more targeted and effective ad campaigns.


Stay On Top of Advanced Tracking Technology

Ad tracking technology has come a long way in recent years, and it’s only going to continue to evolve. Businesses need to stay on top of these advances in order to be able to effectively track the performance of their ad campaigns. This data can then be used to make necessary adjustments and improvements.


Test More Paid Media Channels

There are a seemingly endless number of paid media channels available to businesses today. And while it’s important to focus your ad spend on the channels that are most likely to reach your target audience, it’s also worth testing out new channels from time to time. You never know when you might find a new channel that works better for your business than the ones you’re currently using.


Be A Steward of Automation

As advertising has become more complex, the use of automation has increased as well. While automation can be a huge time-saver, it’s important to remember that it should never be used as a replacement for human input. Automation should only be used to supplement the work that humans are doing, not replace it entirely.

Master Responsive Search Ads

Responsive search ads are a relatively new type of ad that allows businesses to create multiple versions of an ad and then let Google automatically test and optimize them based on real-time data. This type of ad can be extremely effective, but it can also be complex to create and manage. As such, it’s important to make sure that you have a solid understanding of how they work before attempting to use them in your own campaigns.

Fifth & Cor can handle all of your marketing needs, including creating an incredible paid ad campaign that drives sales and reaches customers where they are spending the majority of their time online – on their smartphones. Contact us today to learn more about what we can do for your business!


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