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05 October 2017

Lidl: Press Delivers Much Better ROI Than Programmatic

Lidl gets much better return on investment from press, radio and TV advertising than programmatic which is being oversold, the supermarket's head of media Sam Gaunt told a conference for marketers this week.

“The marketing industry has been guilty of overselling programmatic,” Mr Gaunt told the Festival of Marketing.  “There’s a large amount of over-investment by marketers in the programmatic sphere who sit within brands that have no real strategy. They don’t know how much they are spending on programmatic or where this advertising is going.”

Marketing Week reported that Gaunt produced a chart that showed how Lidl’s digital advertising – which programmatic sits within – is still dwarfed by radio, TV and print when it comes to ROI. He added: “All marketing is about building your brand but also driving sales and programmatic isn’t doing the latter for Lidl just yet.

“For all the debate around fraud and viewability, the reality is programmatic is very expensive. It’s a premium media. When you stack up the cost of it with traditional media and then weigh up the impacts, it can be hard to justify.”

Mr Gaunt’s comments echo those made by senior marketers from other big brands in recent weeks. Procter & Gamble chief brand officer  Marc Pritchard reportedly told the Dmexco conference last month that ROI for some of his brands was going down while the cost of digital media was going up.

And Unilever chief marketing and communications officer Keith Weed used his Ad Week New York keynote address to attack the “murky digital media supply chain.”

Mr Gaunt continued: “Around March last year, what we had been seeing across a number of brands was ROI declining, cost of digital media was going up. As we were raising the bar on our capability, we needed to make sure we improved our media reach because we were realising the reach had actually come down.”

Lidl’s marketing spend has soared in recent years, Marketing Week reported, spending £75 million so far in 2017 compared to £28 million in 2013.

Mr Gaunt said because people typically consume programmatic advertising with the sound off, they are more likely to get distracted. TV, as a comparison, is “more impactful” because the sound is on, which makes it more powerful at holding someone’s attention, he added.

He concluded: “There’s no doubt the future of media spend revolves around programmatic advertising and buying. But, at the moment, the problem with programmatic is it is new, shiny and overvalued.

“I’m not trying to sound pessimistic but trying to make the point that there’s still a long way to go until we reach that nirvana of really understanding how programmatic can work effectively and generate an impressive ROI.”