{"id":93318,"date":"2026-04-28T05:24:07","date_gmt":"2026-04-28T10:24:07","guid":{"rendered":"https:\/\/www.bricktowntom.com\/blog\/?p=93318"},"modified":"2026-04-28T05:24:07","modified_gmt":"2026-04-28T10:24:07","slug":"its-true-you-really-do-need-to-spend-money-to-make-money","status":"publish","type":"post","link":"https:\/\/www.bricktowntom.com\/blog\/04\/its-true-you-really-do-need-to-spend-money-to-make-money.html","title":{"rendered":"It\u2019s true: You really do need to spend money to make money"},"content":{"rendered":"<p>Advertising is a commitment. It can also be expensive. And while we know that <a href=\"https:\/\/annualmarketingreport.nielsen.com\/\">brands are prioritizing their brand awareness<\/a> efforts in the coming year, there isn\u2019t a marketer on the planet who\u2019s not focused on the tangible returns that their spend delivers. And given that focus, it\u2019s not uncommon for brands to pull back when the returns aren\u2019t there. Somewhat counterintuitively, however, that\u2019s usually not a good strategy.&nbsp;<\/p>\n<p>The knee-jerk reaction to reign in spending when returns are lackluster is logical. Why continue\u2014or even increase\u2014spending if it\u2019s not generating positive results? As odd as it might sound, the answer is because you\u2019re likely not spending enough to get the returns you want. In fact, there\u2019s a spending threshold to generate the best returns, and if you don\u2019t hit that, the returns will likely be underwhelming. And if you pull back, the problem could worsen.<\/p>\n<div class=\"wp-block-nlsn-blocks-nlsn-blockquote\">\n<div id=\"\" class=\"module alignfull\">\n<div class=\"container\">\n<div class=\"row justify-content-center\">\n<div class=\"col-md-12\">\n<div class=\"blockquote vertical-line vertical-line-null text-highlight text-bg-null\">\n<h3 class=\"quote-body\">If you\u2019re not spending enough on advertising, you\u2019re not going to get the returns you\u2019re looking for<\/h3>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>In a recent deep dive into an array of cross-channel media plans, we found that 50% of marketers\u2019 media investments are actually too low to drive maximum payback. And in terms of amount, they\u2019re 50% below what they should be to generate the best possible results. When marketers embrace the premise of spending more to earn more\u2014by committing to the ideal amount\u2014they could boost their return on investment (ROI) by as much as 50%.<\/p>\n<p>Armed with an understanding that maximum ROI depends on specific spending levels, marketers can dive into determining what the right spending amount is. Said differently, in order to get the best ROI, brands need to know how much they need to spend to break through.<\/p>\n<p>Here\u2019s an example: In a recent analysis, we found that when a brand spent too little, the vast majority of the audience (87%) were exposed to the campaign less than three times. This group accounted for 68% of the delivered impressions. That means that nearly 70% of the impressions might not have been as effective as they could be.<\/p>\n<p>In a separate example where a brand spent a medium amount, approximately 40% of the audience was exposed at least three times, and only a small portion of the audience (8%), saw the ad eight or more times in a week, which suggests potential ad waste. In the example where ad spending gets very large, 75% of the impressions are attributed to the audience members who see that ad more than eight times, but even in this example,32% of the campaign audience saw the ad only once or twice.<\/p>\n<div class=\"infogram-embed\"><\/div>\n<p>In addition to looking at a few specific cases, we wanted to better understand\u2014at a global level\u2014how frequently brands underspend and in which channels. Through our analysis of ROI observations, we focused on three key questions to understand what spending and ROI looks like\u2014as well as what opportunity is being left on the table:<\/p>\n<ul>\n<li>How much spending does it take to be competitive?<\/li>\n<li>How does this vary by geography?<\/li>\n<li>How do brands\u2019 planned spend levels compare to the optimal spend levels for the media channel?<\/li>\n<\/ul>\n<p>Based on our analysis, we found that the average brand invests 3.8% of its revenue on advertising<sup>1<\/sup>. To stay competitive, we believe a brand needs to spend between 1% and 9% of its revenue on advertising. In our study, we found that most brands spent between 1.4% and 9.2%. Within this range, one-fourth spend less than 3.8% and another quarter spends more than 3.8%.<\/p>\n<div class=\"infogram-embed\"><\/div>\n<p>It\u2019s also worth noting that to compete, a newcomer will need to spend proportionally more than an established player. Conversely, an established brand can trend toward the lower end of the range to stay competitive.<\/p>\n<p>Given the correlation between spend and ROI, modeling is critical for advertisers and agencies interested in finding the right balance to achieve maximum returns. While there are pitfalls to both spending too much and not enough, underspending is notably more problematic.<\/p>\n<p>Across a study of media plans that clients of all sizes provided to Nielsen, we found that 25% of channel-level investments were too high to maximize ROI. Within this group, the spend was 32% too high. Reducing spend would improve channel ROI, but only by 4%. That, however, would result in significantly reduced sales volume, since reducing spend will also reduce ad-driven sales.<\/p>\n<p>The solve here isn\u2019t to slash the budget. Rather, brands should optimize their channel mix. Finding the right balance ensures that spending is properly allocated for reach, efficiency and frequency. For example, an auto manufacturer recently <a href=\"https:\/\/www.nielsen.com\/us\/en\/insights\/article\/2022\/understanding-how-campaign-optimization-pays-off-in-an-ever-expanding-media-landscape\/\">increased its reach by 26%<\/a> and its impressions by more than 39% by simply optimizing its media allocation. In this example, the brand reduced its allocation across linear TV, digital and CTV to accommodate for the inclusion of radio without adjusting its budget.&nbsp;<\/p>\n<p>Spending too little poses a greater challenge. On average, brands underspend by 52%. That\u2019s likely too big a gap for many brands to close in a single planning cycle. But for those that can, the upside is significant: ROI improvement of 50.3%.<\/p>\n<p>Globally, underspending is rampant. While most brands allocate most of their budgets to TV, there are many instances where the allocations are still too low to drive maximum ROI. And outside of TV spending, more than half of the media plans Nielsen reviewed showed under investment across display and video.<\/p>\n<div class=\"infogram-embed\"><\/div>\n<p>ROI is just one of the many factors that advertisers and agencies consider when they\u2019re planning their media budgets. The budget, however, is what drives campaign effectiveness. And right now, 50% of global media investments are too low, which means a significant amount of ROI is being left on the table.<\/p>\n<p><em>For additional insight, <\/em><a href=\"https:\/\/global.nielsen.com\/insights\/2022\/roi-report\/\"><em>download our recent ROI report<\/em><\/a><em>.<\/em>&nbsp;<\/p>\n<h3>Note<\/h3>\n<ol>\n<li>Nielsen Compass Database 2020-2021<\/li>\n<\/ol>\n<p>Source: Nielsen<\/p>\n<p id=\"kc_opp\"><small>Republished by  <a href=\"http:\/\/www.blogtrafficexchange.com\/\">Blog Post Promoter<\/a><\/small><\/p>","protected":false},"excerpt":{"rendered":"<p>Advertising is a commitment. It can also be expensive. And while we know that brands are prioritizing their brand awareness efforts in the &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[51],"tags":[126],"class_list":["post-93318","post","type-post","status-publish","format-standard","hentry","category-a-few-things","tag-information"],"aioseo_notices":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p3k0YU-oh8","jetpack-related-posts":[{"id":93222,"url":"https:\/\/www.bricktowntom.com\/blog\/03\/woocommerce-wednesdays-how-to-manage-ecommerce-returns-refunds-with-woocommerce.html","url_meta":{"origin":93318,"position":0},"title":"WooCommerce Wednesdays: How to manage ecommerce returns &amp; refunds with WooCommerce","author":"admin","date":"March 31, 2026","format":false,"excerpt":"Unfortunately, refunds and returns are an inevitable part of ecommerce. Errors can occur, products may not meet buyer expectations, and some people will simply decide they no longer need their order. After a poor experience, some buyers will naturally hesitate to buy from you again. However, offering a painless returns\u2026","rel":"","context":"In &quot;E-business &amp; E-marketing&quot;","block_context":{"text":"E-business &amp; E-marketing","link":"https:\/\/www.bricktowntom.com\/blog\/category\/ebusiness-emarketing"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.bricktowntom.com\/blog\/wp-content\/uploads\/2022\/06\/businessman-2108029_12801-300x200-1.jpg?fit=300%2C200&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":93748,"url":"https:\/\/www.bricktowntom.com\/blog\/04\/what-to-spend-on-when-inflation-is-high.html","url_meta":{"origin":93318,"position":1},"title":"What to Spend On When Inflation Is High?","author":"admin","date":"April 22, 2026","format":false,"excerpt":"Hey Everyone! I need a little help. Last week, I received a question about inflation spending. Basically, the reader asked if there is anything we should buy ahead of time to head off future inflation. I did some research and only came up with a few things. Okay, here is\u2026","rel":"","context":"In &quot;A Head Start&quot;","block_context":{"text":"A Head Start","link":"https:\/\/www.bricktowntom.com\/blog\/category\/a-head-start"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.bricktowntom.com\/blog\/wp-content\/uploads\/2022\/09\/What-to-Spend-Money-On-When-Inflation-Is-High-350.jpg?fit=350%2C525&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":92515,"url":"https:\/\/www.bricktowntom.com\/blog\/03\/marketers-can-foster-greater-representation-in-media.html","url_meta":{"origin":93318,"position":2},"title":"Marketers can foster greater representation in media","author":"admin","date":"March 30, 2026","format":false,"excerpt":"Every year, the topic of gender equity captures headlines during Women\u2019s History Month. During this time, the media industry is often called out for a lack of on-screen representation. The numbers speak for themselves: women received 43% share of screen and 42% share of casting in U.S. television programming in\u2026","rel":"","context":"In &quot;A Few Things&quot;","block_context":{"text":"A Few Things","link":"https:\/\/www.bricktowntom.com\/blog\/category\/a-few-things"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":92873,"url":"https:\/\/www.bricktowntom.com\/blog\/04\/u-s-podcast-listenership-continues-to-grow-and-audiences-are-resuming-many-pre-pandemic-spending-behaviors.html","url_meta":{"origin":93318,"position":3},"title":"U.S. podcast listenership continues to grow, and audiences are resuming many pre-pandemic spending behaviors","author":"admin","date":"April 27, 2026","format":false,"excerpt":"During a pandemic that drove millions indoors, and in front of screens, a funny thing happened with podcasts: audience engagement increased. And in addition to the wealth of new listeners, engagement among listeners is growing. While the rise in engagement is somewhat contrary to what might be expected amid the\u2026","rel":"","context":"In &quot;A Few Things&quot;","block_context":{"text":"A Few Things","link":"https:\/\/www.bricktowntom.com\/blog\/category\/a-few-things"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":92733,"url":"https:\/\/www.bricktowntom.com\/blog\/04\/is-spending-on-experience-overrated.html","url_meta":{"origin":93318,"position":4},"title":"Is Spending On Experience Overrated?","author":"admin","date":"April 21, 2026","format":false,"excerpt":"Whew! I finished our taxes and sent them in on time. Unfortunately, we owed the government over $3,000 because I didn\u2019t pay enough estimated taxes. I also contributed $5,000 to my i401k for 2021. That reduced our tax liability a bit. Unfortunately, these big payments reduced our cash savings to\u2026","rel":"","context":"In &quot;A Head Start&quot;","block_context":{"text":"A Head Start","link":"https:\/\/www.bricktowntom.com\/blog\/category\/a-head-start"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.bricktowntom.com\/blog\/wp-content\/uploads\/2022\/04\/Experience400.jpg?fit=400%2C400&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":92138,"url":"https:\/\/www.bricktowntom.com\/blog\/04\/a-tale-of-two-teams-and-their-fans.html","url_meta":{"origin":93318,"position":5},"title":"A tale of two teams \u2013 and their fans","author":"admin","date":"April 2, 2026","format":false,"excerpt":"The word fan comes from the word fanatic, meaning an enthusiastic devotee, usually as a spectator. And on Sunday, February 13, there will be inspiring moments both on the field and on screen\u2014for fans around the globe to experience.\u00a0 Not surprisingly, the NFL is the most popular sports league among\u2026","rel":"","context":"In &quot;A Few Things&quot;","block_context":{"text":"A Few Things","link":"https:\/\/www.bricktowntom.com\/blog\/category\/a-few-things"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.bricktowntom.com\/blog\/wp-json\/wp\/v2\/posts\/93318","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bricktowntom.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bricktowntom.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bricktowntom.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bricktowntom.com\/blog\/wp-json\/wp\/v2\/comments?post=93318"}],"version-history":[{"count":1,"href":"https:\/\/www.bricktowntom.com\/blog\/wp-json\/wp\/v2\/posts\/93318\/revisions"}],"predecessor-version":[{"id":93336,"href":"https:\/\/www.bricktowntom.com\/blog\/wp-json\/wp\/v2\/posts\/93318\/revisions\/93336"}],"wp:attachment":[{"href":"https:\/\/www.bricktowntom.com\/blog\/wp-json\/wp\/v2\/media?parent=93318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bricktowntom.com\/blog\/wp-json\/wp\/v2\/categories?post=93318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bricktowntom.com\/blog\/wp-json\/wp\/v2\/tags?post=93318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}