Author: Jazmin Brooks

Study finds that three in four people find privacy protected ads and the option to control the number of ads they see daily appealing

 
New York, NY – July 21, 2021 – A new study released today by MAGNA and privacy browser Brave, “Delivering Ad Experiences People Want: Challenging the ‘Status Quo’ Ad Value Exchange,” explored how people really feel about the ‘status quo’ ad value exchange, where people receive free content in exchange for being served ads, along with traditional ad tracking. The study found that most people (80%) feel the trade-off is a one-way street. While most people, including Gen Z and Millennials, understand the role online ads play, the majority report negative feelings about ad load (67%) and ad tracking that feels creepy (70%). For this study, MAGNA partnered with Brave, a web browser with a global advertising platform built for privacy that rewards people for their attention.
 
The study’s main objective was to find out how people really feel about online advertising today, if the ‘status quo’ ad value exchange can be improved, and how well ads can perform in an alternative ad value exchange. The methodology was two pronged. It consisted of an online survey with 1,005 responses among the general population to gauge attitudes towards advertising and various ad value exchanges. In addition, the research included five ad effectiveness studies across MAGNA campaigns that ran on Brave. These surveys included 10,218 respondents and measured brand impact among people exposed to Brave’s privacy respecting ads (that don’t rely on third party cookies). The ad effectiveness testing spanned both US and Canadian markets, measuring ads for a range of brands, including American Express in Canada, and Canada Dry, MINI, Energizer and Simple Mobile in the US.
 
“The results of the Brave trial underscore the interplay between a compelling value exchange and an authentic approach to consumer privacy and preference,” said Arielle Garcia, Chief Privacy Officer, UM Worldwide. “Consumers are increasingly attuned to the dynamics of the ad-supported internet, and aware of how their data is used to deliver personalization. Empowering people by giving them more control over how their data is used and greater choice over their online ad experience work hand-in-hand to engender trust – the foundation of a fair value exchange.”
 
Additional findings of the Brave and MAGNA study include:

• Ad tracking and ad load are palpable: People understand the importance of online ads, but incessant tracking and ad load are a considerable issue. The majority (67%) of people feel bombarded by the number of ads on the internet and well over half (60%) feel that they are constantly being tracked by advertisers online.
• Outright ad blocking isn’t the answer: The study found more control (79%) is preferred over outright ad blocking (73%). In addition, 72% of people felt online ads that are presented separately from web content at a convenient time were just as preferred as no ads at all.
• More user control is good for marketers: If people could control their ad load online, 81% reported they would consider taking positive steps that are good for the advertising industry as a whole, including using more ad supported websites without paying for content (66%), support brands they see ads from (61%), and even spend more time online (60%).
• A safe environment allows for high ad interaction: All four brands that participated in the research found 61% to 74% interacted with their online ads when run in a browser offering more control over ad load in a privacy safe environment.
• Privacy respecting ads yield results: MAGNA advertisers who partnered with Brave saw significant increases in key branding metrics including brand association (+15%-+17%), intent to research products online (+30%) and purchase intent (+9%).

 
“We know that Brave users are more receptive to our privacy-based ads based on their high engagement,” said Donny Dvorin, Brave’s Head of Sales. “This study confirmed both consumer acceptance of Brave’s advertising model and that Brave’s unique approach to advertising drives real business outcomes across many product categories.”
 

The full study can be found here.

 
About Brave:
Brave Software’s fast, privacy-oriented browser, combined with its blockchain-based digital advertising platform, is reinventing the Web for users, publishers, and advertisers. Users get a private, speedier web experience with much longer battery life, publishers increase their revenue share, and advertisers achieve better conversion. Users can opt into privacy-respecting ads that reward them with BAT (Basic Attention Token), a frequent flyer-like token they can redeem or use to tip or contribute to publishers and other content creators. The Brave solution is a win-win for everyone who has a stake in the open Web and who is weary of giving up privacy and revenue to the ad-tech intermediaries. Brave currently has over 32+ million monthly active users and over 1 million Verified Publishers. Brave Software was co-founded by Brendan Eich, creator of JavaScript and co-founder of Mozilla (Firefox), and Brian Bondy, formerly of Khan Academy and Mozilla.
 
For more information, visit brave.com or follow the company on Twitter @brave.
 
About MAGNA:
MAGNA is the leading global media investment and intelligence company. Our trusted insights, proprietary trials offerings, industry-leading negotiation and unparalleled consultative solutions deliver an actionable marketplace advantage for our clients and subscribers.
 
We are a team of experts driven by results, integrity and inquisitiveness. We operate across five key competencies, supporting clients and cross-functional teams through partnership, education, accountability, connectivity and enablement. For more information, please visit our website: https://magnaglobal.com/ and follow us on LinkedIn and Twitter.
 
Media Contacts:
Zinnia Gill
Mediabrands
Director, Global Corporate Communications
(646) 965-4271
[email protected]
 
[email protected]

A Featured Partner at MAGNA’S Equity Upfront™, Black-Owned ReachTV Positioned to Capture an Audience that’s Eager to Travel Again

 
NEW YORK–(BUSINESS WIRE)–As air travel is resurging, Mediabrands is joining forces with ReachTV, the rapidly expanding network available on nearly 2,500 screens at some 90 airports across North America and the United Kingdom.

The Black-owned network, which features a mix of original programming and content from a host of familiar networks, was a participant in Mediabrands first annual Equity Upfront^™. Created by MAGNA, the Equity Upfront^™ showcased Black-owned and targeted media businesses to advertisers. Subsequently, Mediabrands pledged it would collaborate with clients across the network to invest a minimum of 5% in Black-owned media channels in aggregate by 2023.

ReachTV, founded by media investor and entrepreneur Lynnwood Bibbens, offers advertisers a “Truth & Positivity” programming philosophy and a clutter-free advertising environment. The partnership comes as the total number of flights have increased significantly since the all-time pandemic low of May 2020, according to the Department of Transportation’s most-recent Air Travel Consumer Report.

“ReachTV is dedicated to presenting uplifting content that appeals to a highly desirable audience of tastemakers on the go,” said Bibbens, who is also ReachTV’s Founder and CEO. “We can help Mediabrands’ clients reach travelers who are emerging from the pandemic with pent-up demand. We’re able to reach them from takeoff to destination and from terminal to bar to airport gate.”

ReachTV measured over 12B impressions annually when travel was at 50 percent of normal levels. In another indicator of a rebounding travel industry, ReachTV impressions were up over 70% last month.

In addition to producing original content, ReachTV is partnered with more than 50 content creators, including NBC, A&E, AMC and NFL Network. Since its 2016 launch, ReachTV has scaled rapidly, across North America, and has established a presence at airports in the top 10 U.S. media markets. ReachTV also is installed at three of the U.K.’s busiest airports.

The Mediabrands/ReachTV partnership includes partnership elements such as snipes during programming, sponsorships, content integrations and additional impressions. The outlet also has customized dashboards for marketers and can pinpoint placements near airport retailers selling their wares.

“The Equity Upfront^™ and spending pledge aim to reverse long-standing inequities in the advertising industry,” said Dani Benowitz, President, US, of MAGNA. “As we launch our partnership with ReachTV, our clients will see the immediate benefit of how minority-owned media companies not only provide them with exciting content environments, but also closely connect them with highly desirable and hard to reach consumers in engaging ways. In addition to supporting equity in media, brands who put ReachTV in their mix are positioned to capture consumers as they start traveling again and excitedly renew connections with loved ones.”

ABOUT MEDIABRANDS:

IPG Mediabrands is the media and marketing solutions division of Interpublic Group (NYSE: IPG). Mediabrands manages approximately $40 billion in marketing investment globally on behalf of its clients and provides strategic services and solutions across its award-winning, full-service agency networks UM and Initiative, and through its innovative marketing specialist companies Reprise, Magna, Orion, Rapport, Healix, Mediabrands Content Studio and the IPG Media Lab. Mediabrands’ clients include many of the world’s most recognizable and iconic brands from a broad portfolio of industry sectors. The company employs more than 13,000 marketing experts in more than 130 countries, representing the full diversity of humanity. For more information, please visit our website: www.ipgmediabrands.com and be sure to follow us on LinkedIn, Twitter or Instagram.

ABOUT MAGNA:

MAGNA is the leading global media investment and intelligence company. Our trusted insights, proprietary trials offerings, industry-leading negotiation and unparalleled consultative solutions deliver an actionable marketplace advantage for our clients and subscribers.

We are a team of experts driven by results, integrity and inquisitiveness. We operate across five key competencies, supporting clients and cross-functional teams through partnership, education, accountability, connectivity and enablement. For more information, please visit our website: https://magnaglobal.com/ and follow us on LinkedIn and Twitter.

ABOUT REACHTV:

ReachTV is the first Nielsen-rated, linear OTT entertainment network featuring a combination of short and long form series. ReachTV’s ground-breaking in-airport linear channels can be seen in over 90 of the top airports in North America and are expanding globally. ReachTV airports see over 1 billion travelers annually and generate over $1 billion in food & beverage/retail revenue every month. ReachTV delivers fresh daily content on the Company’s own patent pending delivery platform, which recreates the entire traditional television network ecosystem in the cloud. ReachTV produces content in its owned and operated studios, and partners with world-class producers to deliver outstanding original programming for its network and other distribution channels. In addition to its original programming, ReachTV channels feature innovative short and long form content from a broad range of production companies and networks such as NBCUniversal, AMC, Bloomberg, Business Rockstars, DraftKings, The Hollywood Reporter, Live Nation, Ovation, PlayersTV, and USA Today. ReachTV partnered to launch a Tastemaker network of Influencers and Celebrities under ReachTV. Social which has now grown in less than 18 months to over 350 million fans.

Contact

Rahel Rasu
Chief Communications Officer, Mediabrands
[email protected]

GLOBAL ECONOMIC RECOVERY BRINGS RECORD AD MARKET GROWTH

KEY FINDINGS

• Global advertising spending will grow by $78bn in 2021 (+14%) to $657 billion, a new all-time high, following a decline of -2.5% in 2020. The marketplace will continue to grow in 2022 (+7%).
• Advertising activity is fueled by (1) economic recovery (global GDP +6.4%) benefitting key ad-spending verticals severely hit by COVID-19 last year (automotive, travel, entertainment, restaurants), (2) stronger-than-ever organic drivers to digital marketing, and (3) international sports events (Tokyo Olympics, UEFA Euro).
• Digital ad formats capture most of the growth with ad sales up +20% to $419bn, 64% of total ad sales.
• Linear ad sales are slower to recover but will stabilize full-year (+3% to $238bn).
• All 70 ad markets monitored will expand again this year with China (+16%) and the UK (+17%) among the largest increases.
• The US market will grow by $34bn (+15%, strongest growth rate in 40 years) to reach $259 billion, with digital ad sales up +20% and non-political linear ad sales up +4%.
• Linear ad sales still represent the bulk of ad revenues for traditional media owners and their continued stagnation will trigger a wave of consolidation in the media industry, aimed at competing with digital media players.

 

According to Vincent Létang, EVP, Global Market Research at MAGNA and author of the report: “As economic recovery is stronger and faster than anticipated in several of the world’s largest ad markets (US, UK and China, in particular) and consumption accelerates, brands need to reconnect with consumers. At the same time, the acceleration in ecommerce and digital marketing adoption that started during COVID, continues full speed into 2021, fueling digital advertising spending from consumer brands as well as small and DTC businesses. This unique combination of cyclical, organic and structural drivers will lead to the strongest advertising annual growth ever monitored by MAGNA: +14% globally (+15% in the US).”

GLOBAL AD MARKET: +14% TO $657 BILLION

As the economy recovers faster than expected globally (GDP +6%) and in most markets, so do marketing activity and advertising spending. With the added driver of rescheduled international sports events, MAGNA forecasts global all-media advertising spending to grow by $78bn (+14%) to $657bn in 2021, a new all-time high. MAGNA also raises its forecast for advertising market growth in 2022 to +6.6% (previously +5%). The +14% growth expectation for 2021 would represent the highest growth rate on record, beating +12.5% in 2000, and a significant increase from MAGNA’s previous global forecast (Dec. 2020: +8%).

Economic recovery will lift all boats, but the contrast has never been wider between digital ad sales accelerating (+20% to $419bn) and linear ad sales (linear TV, linear radio, print, OOH, cinema) which are barely stabilizing (+3% to $238bn after 2020’s -18% decline). COVID may be receding in most markets but the changes to lifestyles, media consumption and business models continue to fuel an acceleration in the adoption of digital marketing from both national consumer brands and small, local and “direct” businesses. Digital growth from consumer brands comes partly at the expense of traditional linear channels but in the case of small businesses (that represent the bulk of search and social ad spend), it is mostly incremental to the advertising pie.

All of the 70 ad markets monitored by MAGNA will grow to some degree in 2021 and 2022. In 2021, Asia Pacific ad markets will grow by +13%, EMEA markets by +12%. Latin America and North America will both grow by nearly +15%. Everywhere, the pattern is similar, with linear ad sales to grow by low- to mid-single digits and digital ad sales growing by +20% or more. The United States remains the largest market and will increase by +15% in 2021, and will still remain ahead of China (+16%), Japan (+9%), the United Kingdom (+17%) and Germany (+11%) among the top five markets.

Nearly all digital ad formats will grow by double-digits in 2021 as total digital ad sales will account for 64% of global all-media ad spend. They will reach two-thirds of all advertising sales in 2022. The explosion of ecommerce will boost search by +20% to $200 billion, while growing marketing adoption and media consumption will drive social media by +26% to $119 billion. Video ads will grow by +24% to $57 billion as short-form, long-form AVOD and OTT ad spend are all fueled by increased reach and viewing. Out-stream video and static banners may grow at a more subdued pace (single-digits) due to the increasing limitations to tracking and targeting on websites (on Safari and soon Chrome) and apps (on iOS14).

Among linear ad formats, MAGNA expects linear television ad sales to recover as consumer brands (e.g. automotive, drinks) compete for returning consumers in a brand-safe environment. Advertiser demand will drive CPM inflation (average +8%) which offsets eroding ratings. In addition, international sports events bring additional ad budgets: Global TV ad sales will thus grow by +3% to $153 billion. Radio and out-of-home media will benefit from businesses re-opening in several key verticals (e.g. automotive, retail, entertainment) as well as a gradual return to consumer mobility that will restore their audiences; ad sales will increase by +5% and +10% respectively. Print ad sales will not quite stabilize as the return of key verticals (fashion, beauty, travel) will not offset the continued decline in circulation and ad pages. Newspaper and magazine ad sales will decrease by -4% and -5% respectively.

The scale reached by digital media owners and the stagnation of linear ad spend is forcing traditional media owners to consolidate to compete more effectively and invest in cross-media technology. MAGNA believes the spring announcements in the US (Warner/Discovery) and in France (TF1/M6 with a combined market share of 85%) are just the beginning of a new wave of mergers and acquisitions globally.

US AD MARKET: +15% TO $259 BILLION

In the US, media companies’ net advertising revenues (NAR) will reach a new all-time high of $259 billion in 2021. That will be an increase of $34 billion (+15%) over 2020. The +15% growth will mostly be driven by digital advertising acceleration (+24%) while linear ad sales will only show modest growth (+4% excluding political). The new growth forecast represents the strongest acceleration in 40 years and stands nine percentage points above the previous MAGNA forecast (published March 2021). The upward revision comes from a better-than-expected start of the year and an increasingly strong economic outlook for the coming months: For example, the International Monetary Fund (IMF) recently increased its full-year, real GDP forecast to +6.4%. Marketing activity and advertising spending will be fueled by strong consumption, a fast-recovering job market, the reopening of many businesses (restaurants, theaters, amusement parks…) and the return of normal events and sports schedules, plus the Olympics.

Following a strong 1Q21 (+16%, driven by huge digital growth), MAGNA expects second quarter ad sales to grow by at least +35% year-over-year (YOY), against a historically low quarter in 2Q20 (-17%). Strong YOY growth will continue in 3Q21: +13% with $900m of incremental ad spend generated around the Tokyo Olympics. Growth will slow down to +4% in 4Q21, which compares against a strong quarter in 4Q20 that was boosted by record political spending and a robust holiday season.

Digital advertising sales will grow by +24% to reach $179bn, to approach 70% of total ad sales. Unlike linear media, the digital market quickly rebounded from its lows in the second quarter of 2020, and it has been red hot ever since. First-quarter digital ad sales were up +35% YOY and the second quarter is expected to grow by at least +40% YOY.

Within digital media, social, video and search will drive growth. Both social media and digital video will grow +28% this year, while search will gain +23%. Video will be driven by the short-form segment, as both YouTube and Twitch continue to report strong results, and the long-form segment, as the proliferation of AVOD platforms in 2020 (Peacock, Paramount+, etc.) demonstrate, will capture dollars lost in linear TV. Digital audio will also grow in 2021 (+17%) as consumption and marketing usage in podcasts continues to increase rapidly.

Non-political linear advertising sales (linear TV, radio, print, out-of-home and cinema) will increase by +4% to $81 billion, but due to the lack of political spend this year, total linear ad sales (including political) will be merely stable. Linear ad spend has been slow to recover in 1Q21 and ad sales were still down vs 2020 (-11% YOY), but more easily, the return of sports, and consumer mobility will help stabilize the market in the next three quarters. Within linear media, out of home will show the highest growth, +11% over 2020, following a heavy decline in 2020 (-25%) and in 1Q21 (-28%), as mobility recovers and advertising spending comes back from entertainment, retail and travel (all among top 5 spending verticals). Local TV will benefit from the recovery of its No. 1 industry vertical, automotive (Jan-April car sales up 29%), driving non-political ad sales by +10%. Radio ad sales will increase by +7% to $10bn, thanks to automotive and entertainment verticals (both in the Top 4 radio verticals). Print is the only linear ad format that will not grow again in 2021 (-14%), though national newspapers and magazines will fare better than their local counterparts. National TV ad sales will grow by 5% to $38 billion helped by stronger pricing and incremental spending around the Tokyo Olympics.

Traditional media owners’ cross-platform ad sales (linear+digital) will grow by +5% in 2021, with total television ad revenues up +6% (including long-form AVOD +25%) and audio ad sales up +10% (including audio streaming and podcasting up +35%). The digital ad sales of newspaper and magazine publishers, which now stand at half of total publishing ad sales, will grow further this year (+14%) but not enough to offset the continuing decline of print ad sales (total ad revenues -14%).

In 2022, MAGNA expects the US advertising market to grow by +8% to reach $280bn, thanks to continued economic growth (GDP growth between +3.5% and +4.3%) and more cyclical drivers (Winter Olympics in 1Q22, mid-term elections in 4Q22). Marketing and advertising activity will also benefit from a full year of an open economy compared to 2021, when the first quarter was still partly hampered by COVID. This is a two-percentage point upward revision from MAGNA’s previous report in March.

MAGNA believes the recent merger announcement between Warner Media and Discovery is the first of a new wave of consolidations to come in the media industry. Facing stagnation in linear media consumption and linear ad sales that are still the bulk of their business revenues, traditional media companies have no choice but to grow in scale, in order to compete with digital media giants, and invest in cross-platform advertising solutions. Traditional media owners are moving now as they believe antitrust authorities are ready to consider market shares in the broader media market and thus approve horizontal consolidations that would have been unthinkable just five years ago. The US TV market remains relatively fragmented following the merger of Warner and Discovery: The top three TV ad vendors (currently NBC, ViacomCBS and Warner/Discovery) will control just 60% of the US TV advertising market, compared to 90%+ for the top three broadcasters in most other advanced markets. Moreover, they will control only 15% of the broader, cross-platform ad market compared to 30% for Google or 16% for Facebook. Media consolidation is global, and international markets remain a step ahead as the top two French broadcasters (combined market share 90%) just announced their own merger plans.

• DOWNLOAD full MAGNA reports and datasets: WWW.ATLAS.MAGNAGLOBAL.COM (Mediabrands employees and MAGNA subscribers)
• NEXT UPDATE: September 2021 (US), December 2021 (US & Global)

TABLE 1: GLOBAL NET AD REVENUES (NEW GROWTH FORECASTS)

KEY MARKETS                     2020         2021           2022

WORLD                                 -2.6%         13.5%        6.6%

NORTH AMERICA               0.2%         14.9%         7.9%

LATIN AMERICA              -11.5%        14.8%         5.8%

WESTERN EUROPE          -5.0%        12.4%         5.9%

CENTRAL &                          -3.4%       11.6%          5.1%

EASTERN EUROPE

EMEA                                     -5.0%       12.0%            5.9%

APAC                                      -3.3%        12.8%            5.5%

AUSTRALIA                         -5.1%        11.4%              2.9%

BRAZIL                                  -6.8%       15.2%             6.9%

CANADA                               -5.8%        11.4%              5.7%

CHINA                                     2.6%         16.1%              5.9%

FRANCE                                -6.0%         13.1%              7.2%

GERMANY                            -3.7%          10.9%             5.0%

INDIA                                     -22.8%        11.0%              13.6%

ITALY                                      -10.4%        7.7%                4.0%

JAPAN                                      -6.0%          8.8%                4.9%

RUSSIA                                     -1.8%          11.6%               4.9%

SPAIN                                       -10.7%         15.2%               7.5%

UNITED KINGDOM             -2.6%          16.8%                8.0%

USA (EXCL. CE)                     -1.7%            17.4%               6.5%

USA (INCL. CE)                        0.5%            15.1%                8.0%

Source: MAGNA, June 2021

TABLE 2: NET AD REVENUES IN KEY MARKETS (NEW vs OLD FORECAST)

2021 Growth                              Fall 2020              Spring 2021             Change

World (all media)                         7.6%                          13.5%                     5.9%

North America                               4.2%                           14.9%                    10.8%

Latin America                                 8.3%                            14.8%                     6.6%

Western Europe                              9.1%                            12.4%                      3.3%

Central and Eastern Europe       9.5%                            11.6%                      2.1%

Emerging                                            11.2%                            14.4%                     3.2%

Developed                                           6.4%                             13.2%                      6.9%

Europe, Middle East, Africa         8.9%                             12.0%                      3.1%

Asia Pacific                                          11.1%                               12.8%                     1.7%

Total Linear                                          3.5%                               3.1%                    -0.4%

Total Digital                                        10.4%                               20.4%                  10.0%

Source: MAGNA, June 2021

TABLE 3: NET ADVERTISING REVENUES – US MARKET

AD FORMATS                                       2020                              2021                             2022

DIGITAL AD REVENUES                  13.3%                            23.5%                         11.1%

Search                                                       11.6%                             23.2%                       11.4%

Online Video                                           23.5%                            28.1%                      15.8%

Social Media                                            21.4%                             28.3%                    12.6%

Mobile                                                        20.4%                             16.1%                    15.2%

LINEAR AD REVENUES (incl. CE) -16.4%                            -0.1%                     1.2%

National TV (incl. CE)                         -11.8%                                5.1%                   -3.7%

National TV (excl. CE)                          -12.3%                              3.6%                  -3.6%

Local TV (incl. CE)                                     0.8%                             -11.0%                 15.1%

Local TV (excl. CE)                                    -18.7%                            9.9%               -4.4%

Print                                                                -31.6%                           -13.9%           -16.7%

Radio                                                                -31.0%                             6.0%               3.6%

Out-of-home                                                -24.6%                            10.4%             8.2%

Cinema                                                              -79.9%                            135.9%       50.0%

Direct Mail                                                       -13.6%                            -4.0%         -0.7%

GRAND TOTAL (incl. CE)                              0.5%                               15.1%          8.0%

GRAND TOTAL (excl. CE)                              -1.7%                              17.4%          6.5%

Source: MAGNA, June 2021

ABOUT THE RESEARCH

MAGNA research is media centric. It monitors net media owners advertising revenues based on a bottom-up analysis of financial reports and data from media trade organizations; other ad market studies are based on tracking ad insertions or consolidating agency billings. The MAGNA approach provides the most accurate and comprehensive picture of the market as it captures total net media owners’ ad revenues coming from national consumer brands’ spending as well as small, local, “direct” advertisers. Forecasts are based on economic outlook and market shares dynamic. The full report contains more granular media breakdowns and forecasts to 2025, for 70 markets.

ABOUT MAGNA
MAGNA is the leading global media investment and intelligence company. Our trusted insights, proprietary trials offerings, industry-leading negotiation and unparalleled consultative solutions deliver an actionable marketplace advantage for our clients and subscribers.

We are a team of experts driven by results, integrity and inquisitiveness. We operate across five key competencies, supporting clients and cross-functional teams through partnership, education, accountability, connectivity and enablement. For more information, please visit our website: https://magnaglobal.com/ and follow us on LinkedIn and Twitter.
MAGNA has set the industry standard for more than 60 years by predicting the future of media value. We publish more than 40 reports per year on audience trends, media spend and market demand as well as ad effectiveness.

To access full reports and databases or to learn more about our market research services, contact [email protected].

A new report from Matterkind and MAGNA shows increased ROI for brands that use Advanced Addressable Direct Mail

 
NEW YORK–(BUSINESS WIRE)–Today, Interpublic Group’s Matterkind and MAGNA revealed ROI to Sender, a new report that lists the best practices for running a direct mail campaign and explores the value of new product developments like Advanced Addressable Direct Mail (AADM). The report highlights the fact that direct mail still remains an integral component of everyday life and brands are continuing to find innovative ways to reach their customers. The report also analyzes key trends and examines how to incorporate direct mail in a media mix.

ROI to Sender reveals how direct mail, one of the original forms of advertising, is now a $16 billion industry with a core group of loyal users that continue to invest in innovative new product developments like AADM each year. AADM is the latest product advancement that accounted for $150 million last year and is a burgeoning solution that matches a user’s digital profile to their physical location. This solution allows marketers to retarget online website visitors with offline direct mail. This means that brands can re-engage customers using their first-party Customer Relationship Management databases or prospect for new clients by tying digital third-party data to terrestrial household addresses. It’s a targeted digital-to-direct mail solution that lets marketers cut waste and reach only the audience that they want to reach with mail.

According to the report, MAGNA expects the AADM market to grow to more than $500 million by 2025, an average growth rate of +30% per year. This growth opens several new data-driven opportunities for brands to merge direct mail with their addressable media strategy in a familiar way that people expect.

“This new ability to leverage rich, addressable tactics for direct mail is really exciting and something that we’ve seen marketers needing, and wanting, for some time,” said Chris Karpenko, Executive Director of Brand Marketing at the United States Postal Service. “We’ve had great results with direct mail and digital working together within a holistic omni-channel mix. Bringing these channels even closer together, further bridging the online and physical worlds, is crucial to successful marketing.”

“Direct mail and addressability have historically been synonymous as direct mail has traditionally been regarded as a new customer acquisition or traffic-driving strategy for local businesses,” said David Tucker, Senior Vice President Managing Director of US Strategy at MAGNA. “With the rise of advanced addressable direct mail, linking the physical mailer to online activity, many advertisers have also discovered mail’s strength further down the funnel, finding it a cost-effective way to retarget, especially coming off a period where more touchpoints were digital than brick and mortar.”

“With third-party cookies eroding, and CTV screens filled with logged-in streaming users, more of the marketing mix than ever before is anchored around robust, first-party data,” said Marcus Witte, Executive Vice President of Advisory Services at Matterkind. “When using Matterkind’s AADM offering, we have seen ROI increase for brands when direct mail is tied into a holistic campaign based on a person’s digital identity and physical address.”

Key findings from ROI to Sender include:

• Direct mail is the third largest media channel in the US, after digital media and national television, and is slightly larger than local television.
  • By the end of 2020 direct mail was a $16 billion market.
• Interest in mail is high, and more people are realizing the importance of it.
  • According to a USPS survey run by Summit Research in late 2020, 60% of millennials viewed mail as more important to them in 2020 than they did three years ago, while 54% of Gen X note that mail was more important to them in the same time period.
  • An incredible 80% of people said that they looked forward to seeing what was in their mailbox.
• People spend more time reading their mail than in past years.
  • On average, people spent more than 8 minutes opening and reading mail in 2020.
• In 2021, programmatic techniques enable direct mail to be an effective part of the media mix across the funnel.
  • The top 10 adapters account for 30% of direct mail spend and grew their combined spend by 1% in 2020.
• The growth of Advanced Addressable Direct Mail is part of a larger trend toward automated direct mail platforms.
  • The advanced addressable direct mail market will grow by nearly +50% in 2021 and will surpass $500 million by 2025.

 
In 2021, programmatic techniques enable direct mail to be an effective part of the media mix across the funnel and represent an ideal time to bring AADM into the media mix. With audience modeling, smaller batches of mail, shortened production timelines, and creative advances, direct mail can be a strong contributor to results across the customer journey.

To learn more, download the full report.

About MAGNA

MAGNA is the leading global media investment and intelligence company. Our trusted insights, proprietary trials offerings, industry-leading negotiation and unparalleled consultative solutions deliver an actionable marketplace advantage for our clients and subscribers. We are a team of experts driven by results, integrity and inquisitiveness. We operate across five key competencies, supporting clients and cross-functional teams through partnership, education, accountability, connectivity and enablement. For more information, please visit our website: magnaglobal.com and follow us on LinkedIn and Twitter.