Matrix Solutions’ 2018 Ad Spend Churn in America Report Unveils Two in Three Advertisers Return to Advertise on Broadcast, One in Three Churn

By MTS Staff Writer On Sep 27, 2018

New Report from Matrix Solutions Yields Churn Data Across Brand/Advertiser, Platform and Industry

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.

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.

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“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:

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Broadcast

Non-Profits/Community – 45.44 percent churn rate at $4,700 ad dollars (on average)
PD Prog/Dir Response – 43.59 percent churn rate at $2,816 ad dollars (on average)
Media/Communications – 43.17 percent churn rate at $24,210 ad dollars (on average)
Beverages – 40.90 percent churn rate at $10,406 ad dollars (on average)
Travel & Leisure – 40.82 percent churn rate at $10,693 ad dollars (on average).

Digital Broadcast

Health & Beauty – 64.38 percent churn rate at $2,753 ad dollars (on average)
Grocery/Food Items – 58.60 percent churn rate at $2,885 ad dollars (on average)
Beverages – 58.13 percent churn rate at $2,935 ad dollars (on average)
Retail/Stores – 56.02 percent churn rate at $2,370 ad dollars (on average)
Restaurants – 55.37 percent churn rate at $2,245 ad dollars (on average)

Radio

Health & Beauty – 50.74 percent churn rate at $6,925 ad dollars (on average)
Entertainment – 46.50 percent churn rate at $2,691 ad dollars (on average)
Non-Profits/Community – 46.20 percent churn rate at $2,095 ad dollars (on average)
Services – 46.03 percent churn rate at $4,405 ad dollars (on average)
Beverages – 45.95 percent churn rate at $8,081 ad dollars (on average)

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.

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Broadcast

Charter Communications, with an average loss of $342,831
Honda Dealer Association, with an average loss of $119,251
Blue Diamond, with an average loss of $113,597
FX Networks, with an average loss of $96,654
Bank of America, with an average loss of $80,871

Digital Broadcast

TIAA.org, with an average loss of $454,720
McDonald’s, with an average loss of $34,836
Verizon Wireless, with an average loss of $30,694
Cracker Barrell, with an average loss of $23,860
Ford Auto Dealers Association, with an average loss of $20,798

Radio

Mattress Firm, with an average loss of $419,310
Jackson Hewitt Tax Service, with an average loss of $151,663
Polaris, with an average loss of $130,947
T-Mobile, with an average loss of $125,325
Marathon Petroleum Company, with an average loss of $119,276