Effective marketing strategies should produce long-term returns. However, a fragmented media landscape, combined with short-term corporate policies, means marketers have only a partial view of the impact of their campaigns across the entire conversion funnel. Enough to lead them to make often ill-advised budgetary decisions.
A new study by WARC, in partnership with Google, highlights the latest research in EMEA on the importance of measuring both short- and long-term effectiveness, the link between brand metrics and sales. And explains how the latest technological and methodological advances in measurement can help advertisers have a more holistic view of the impact of their marketing.
Michal Protasiuk and Ahmet Bas, Senior Managers of Marketing Research and Insights, YouTube Ads, Market Insights, EMEA, said: “Measuring the impact of marketing is challenging, especially in an ever-changing and diverse media landscape, so than in an increasingly complex consumer purchasing journey. Advertisers optimize their media investments with short-term metric, using it as the compass for their entire marketing budget, apparently including their branding campaigns with long-term goals. The need for a more holistic approach to measuring marketing impact has never been greater. »
Focus on short-term marketing ROI and ignore half of the media returns
A strong emphasis on performance marketing and short-term measurement has made it difficult to demonstrate the long-term value of marketing. Yet the cost of neglecting long-term effects is an incomplete picture of ROI. According to Ekimetrics’ latest MMM meta-analysis, advertisers who prioritize short-term ROI may be overlooking half (50%) of the media returns that can be generated by the related but distinct dynamics of brand building.
Investing in top, middle and bottom of the funnel marketing drives long-term growth
Investing in brand awareness through top- and mid-funnel marketing not only promotes long-term growth, but can also have a direct impact on the bottom line. Multiple studies show that marketers should move away from the binary view of brand and performance, and focus more on results and use both traditional and digital channels to drive growth.
A recent study by Nielsen for Google found that increasing top- and mid-funnel brand awareness by just 1% not only leads to a 0.6% increase in long-term sales, but also a 0.4% increase in short-term sales.
Investing in bottom-of-funnel marketing to drive purchase intent has also been proven to have long-term effects
According to the Nielsen study, by increasing activities aimed at increasing “purchase intent” by 1%, short-term sales increase by 0.7% and long-term sales by 0.2%.
Leveraging Marketing Mix Modeling to Maximize ROI Across the Funnel
MMM is experiencing renewed interest, driven by the shift to measuring effectiveness, the adoption of robust and aggregated measurement approaches, and its ability to measure new digital media formats. Because it is a statistical analysis technique used to evaluate the effectiveness of marketing investments and their impact on business performance, such as sales. It makes it possible to quantify the influence of the different elements of the marketing mix (advertising, promotions, prices, distribution channels, etc.) by measuring their contribution to short and long term results.
However, no single tool can provide a holistic measurement of the impact of media investments. To measure marketing performance effectively, a combined approach is necessary to fill the gaps between each measurement methodology. Marketers are increasingly combining the use of Attribution (to measure digital media campaigns), Incremental Experiments (to validate observations and test insights) and enhanced MMM solutions (to connect insights and learnings) .
Using historical data on marketing spend, sales and other external factors (like economic or seasonal trends), MMM helps businesses optimize the allocation of their marketing budget by identifying the best performing channels, and make informed decisions to maximize return on investment (ROI).
The success of using MMM relies on appropriate investment, judicious choices between internalization and outsourcing, informed strategic planning and the establishment of reliable benchmarks for continuous optimization.
Anna Dzierzędzka, Director of Media Planning and Connections at PepsiCo CE and Founder & President of POR, part of the WFA, said: “AI-powered advertising solutions will revolutionize holistic campaign measurement, enabling a deeper understanding of efficiency at an accelerated pace and providing insights into potential future scenarios. This increased understanding will enable businesses to make more informed and impactful decisions, driving growth and success. »
