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Out-of-home (OOH) gives luxury brands a far greater return-on-investment (ROI) than any other advertising channel, according to new data from econometrics agency Independent Marketing Sciences (IMS).

Data analysed from over 270 IMS campaigns utilising 24 different advertising channels over the last decade shows that OOH delivers, an average ROI of 12.8x for luxury brands - meaning every £1 spent directly translates into £12.80 in revenue. Across all 24 channels, luxury’s average advertising ROI was 4.7x.

“Luxury doesn’t tend to follow the typical product playbook, and with luxury advertising, a lighter touch is often more,” said Alex Vass, founder and CEO at IMS. “A heavily performance-driven, conversion-led approach risks brands undermining their own appeal. Out-of-home on the other hand can, through exclusive, high-impact environments, drive brand awareness, fame and an exceptional ROI - without the pressure of immediate conversion.”

According to ad spend analysis by Vivvix, investment by luxury brands into OOH nearly doubled between 2019 and 2023. Meanwhile, JCDecaux showed that 86% of audiences who see a luxury apparel OOH advert engaged with that brand, including by visiting its website or social media channels.

After OOH, the channels delivering the highest ROI for luxury were consumer retargeting (8.6x ROI) and Google Ads’ Performance Max (8.2x ROI). The channels delivering the lowest ROI for luxury included content syndication (0.7x ROI), brochures (1.2x ROI) and video on demand (1.5x ROI).

“These results show that the creativity of Out of Home drives real-world emotional connection for luxury brands to the public,” said Tim Lumb, Director Outsmart.

Other industries where OOH has a high return on investment include utilities and infrastructure (9.1x ROI) and over-the-counter pharmaceuticals (4.8x ROI), according to IMS.

IMS uses econometric modelling to quantify the relationship between various factors such as seasonality, product promotions, and economic trends, in order to calculate the effectiveness of different marketing channels for specific brands.