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How marketers can balance short-term gains with long-term success
Effective marketing strategies balance short-term returns with long-term objectives. However, a fragmented media landscape, combined with the industry’s focus on short-term metrics, often prevents marketers from gaining a holistic view of the impact of their full-funnel efforts, increasing the risk of misguided budget decisions.
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A new study by Warc in partnership with Google, highlights the latest research in EMEA on the importance of measuring both short-term and long-term effectiveness, the connection between brand metrics and sales, and how the latest technological and methodological advancements around measurement may help advertisers have a more holistic view on the impact of their marketing.
Rica Facundo, managing editor, Warc, comments: “In this whitepaper, developed in partnership with Google, we dive into the challenges of measuring the long-term impact of campaigns and offer new evidence into new solutions and best practices that will help marketers gain broader and more granular insights of their marketing efforts.”
Michal Protasiuk and Ahmet Bas, senior marketing research & insights managers, YouTube Ads, Market Insights, EMEA, say: “Measuring marketing impact is a challenge, particularly in the ever-evolving and diverse media landscape and the increasingly messy consumer purchase journey.
“Advertisers are optimising their media investments with a short-term focused measurement and using it as the north star for their whole marketing budget, seemingly even for their branding campaigns with long-term goals. The need for a more holistic approach to measuring the impact of marketing has never been greater.”
Key insights and solutions outlined in ‘Beyond the horizon - the holistic path to measuring media investments’ include:
Focusing on short-term marketing ROI ignores half of media returns
A sharp focus on performance marketing and short-term measurement, have made it difficult to prove the long-term value of marketing. Yet the cost of neglecting long-term effects is an incomplete picture of ROI.
According to the latest MMM Meta analysis by Ekimetrics, advertisers that prioritise short-term ROI may overlook half (50%) of media returns that can be generated by the related but separate dynamic of brand building.
Peter Grant, head of Media Effectiveness, Boots, says: “If long-term health is sacrificed enough times and to a significant degree, then there is no tomorrow. Deep promotions and an addiction to conversion tactics are effectively the same thing. It may look and feel great today, but more is needed for tomorrow to be sustainable.”
Investing in upper, mid and lower funnel marketing drives long-term growth
Investing in brand awareness via upper- and mid-funnel marketing not only drives long-term growth but can also have a direct impact on the bottom line.
Multiple studies are proving that marketers should move away from the binary view of brand versus performance to be more outcome-focused and utilise both traditional and digital channels to generate growth.
A recent study conducted by Nielsen for Google revealed that boosting brand awareness in the upper and mid funnel by just 1% not only leads to a 0.6% increase in long-term sales, but also results in a 0.4% increase in short-term sales.
Investing in lower funnel marketing to drive purchase intent, has also proven to have long-term effects. According to the Nielsen study, by increasing ‘purchase intent’ activities by 1%, short-term sales grow by 0.7% and long-term sales by 0.2%.
Leveraging Marketing Mix Models (MMM) to maximise ROI across the funnel
No single tool can provide a holistic measurement of media impact. To measure marketing performance effectively, a combined approach is necessary to close the gap 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).
Marketing Mix Modelling (MMM) is witnessing a resurgence driven by the shift towards effectiveness measurement, the adoption of robust, aggregated measurement approaches, and its capability of measuring new digital media formats.
Brands considering MMM should give thought to:
Investment: is dependent on factors such as how much data the company has and how granular the insights should be. Dr Grace Kite, economist and CEO/founder of Magic Numbers recommends investing 10% of the media budget in MMM.
In-housing vs outsourcing: this is determined by factors such as expertise, bespoke or off-the-shelf solutions.
Strategic budget planning: MMM is particularly effective in assessing future cross-channel budget distribution by leveraging past performance data.
Benchmarking: MMM helps create accurate and data-driven benchmarks that quantify the holistic impact of different marketing channels on ROI.
Anna Dzierzędzka, media & connections planning director, PepsiCo CE and Founder & President of POR, part of WFA, says: “AI-powered advertising solutions will revolutionize holistic campaign measurement, enabling a deeper understanding of effectiveness at an accelerated pace and providing insights into potential future scenarios. This enhanced understanding will empower businesses to make more informed and impactful decisions, ultimately driving growth and success.
A complimentary copy of the full report is available to read here.
