LOS ANGELES: Online marketing is more cost-effective than the offline alternative, and a simple reallocation of marketing spend could generate a 4% increase in sales, a study has argued.

Analytics company Marketshare carried out in-depth analyses of video and mobile ad effectiveness to create a Marketing Efficiency Index, which compared ad spending on different online and offline channels to actual results. The study, sponsored by Google, looked at several major industries, including autos (entry level luxury segment), credit cards, cosmetics, auto insurance and smartphones.

It found that by reapportioning their expenditure, marketers with spending levels similar to the category averages studied could expect to generate an incremental 1% to 4% lift in sales.

Noting that the total marketing spend analysed across all five categories exceeded $8bn, the report observed that "the stakes are significant".

"Through this analysis, MarketShare and Google are helping marketers better understand how search, online video, and other paid, owned, and earned marketing tactics influence consumer behaviour and drive demand," said Wes Nichols, chief executive at MarketShare.

"At the same time," he added, "we've uncovered new insights about video and mobile advertising effectiveness that many marketers haven't seen or been able to quantify before."

In particular, Marketshare's analysis was able to determine the value YouTube "owned" and "earned" content views represent, highlighting their significant overall sales contribution. It suggested that current levels of brand spend in YouTube appeared to be consistently underinvested.

Looking at the categories studied, Marketshare proposed that smartphones and auto insurance would be well-placed to benefit from an increase in digital spending.

And in terms of digital sectors, mobile search was deemed important, especially in the larger categories including cosmetics, credit cards and auto insurance.

Data sourced from PR Newswire; additional content by Warc staff