At a time when metrics and KPIs rule all decision making in the media buying process for advertisements, a new report examining churn across broadcast, digital broadcast and radio found that broadcast is least likely to experience churned accounts at a 36.34 percent churn rate; followed by radio with a churn rate of 43.76 percent; with digital broadcast proving the most volatile with a churn rate of 50.09 percent.
However, the stakes are higher for broadcast and radio when an account churns than it is for digital broadcast platforms. On average, a churned account for broadcast yields a loss of $7,887 per media deal; for radio it's $5,626; and for digital broadcast, even though it has the highest churn rate, the impact of that churn, on average, costs $3,920.
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The findings come from Matrix Solutions' 2018 Ad Spend Churn in America Report, a comprehensive report on the state of the advertising spend churn rates derived from the activity of more than 400,000 active accounts within media ad sales teams from Matrix's global ad sales platform Monarch. The data analyzed media ad deals between July 2016 to June 2018 to determine churn activity across industries and broadcast, digital broadcast and radio platforms.
"When thinking about advertising spend, the industry tends to only look at the money that exchanges hands between the advertiser and the media company—and we wanted to instead look at the money that never left the negotiating table," said Mark Gorman, CEO at Matrix Solutions.
"Broadcast clearly fares better than its digital counterpart, and it's all because of measurement. There are fewer reasons for advertisers to doubt the effectiveness of their broadcast ad buys, hence why the platform is least likely to churn. There's less proof to show what is and isn't working. In contrast, digital broadcast has more of a burden to bare in that it captures more metrics to paint a picture of success for a digital ad buy—but failure as well, hence the platform's 50 percent churn rate."
Churn by Industry
Possessing a window into churn rates for specific industries enables media companies to better develop their media sales strategies. Churn history helps forecast the likelihood of which advertisers might fail to return revenue to a platform and which advertiser is likely to repeat business.
When examining industries least likely to experience churn:
Broadcast
Digital Broadcast
Radio
Churn by Brand
Some brands are more reliable than others—in addition to Matrix Solutions' 2018 Ad Spend Churn in America Report highlighting specific churn rates, and the cost of that churn across platforms and industries, it has also captured data on brands with the highest loss in revenue due to churned accounts that come out of a national sales office across broadcast, digital broadcast and radio.
Broadcast
Digital Broadcast
Radio
For more churn information on brands, additional information detailing specific churn information across platform and industries and a national versus local analysis on churn, please see the full 2018 Ad Spend Churn in America Report here.
Methodology
Matrix Solutions looked at more than $9 billion worth of relevant media ad sales deals, excluding political ad spend, to determine the churn activity across platforms, industries and brands in the United States – normalizing each category from the activity of more than 400,000 active accounts within media ad sales teams selling broadcast, digital broadcast and radio inventory. Data was derived from Matrix's global ad sales platform Monarch. Data was captured from July 2016 to June 2018.
About Matrix Solutions
Matrix Solutions makes media happen by helping media companies to better monetize their content. Its flagship product, Monarch, is the only global ad sales platform built for media – transforming chaotic data into actionable sales information that delivers the insights necessary for prospecting, managing, evaluating and closing business.
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The company manages more than $13 billion in media ad revenue, offering its best-in-class analytics, sales intelligence, media-specific CRM and sales tools to more than 10,000 media sellers to more efficiently manage their workflow.
For more information, please visit matrixformedia.com.
Contact
Diffusion PR for Matrix Solutions
Lauren Curlett
matrix@diffusionpr.com
1 (646) 571-0120
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