In a challenging environment, it has become vital for brands to understand the true return of their media investment now and in the future, by regularly evaluating metrics such as customer retention, lifetime value, and short-term conversions and sales.
In an article for a WARC Spotlight on Drivers of brand growth, Konstanze Fichtner and Harry Davison share research from GfK, Nielsen, and Nepa, commissioned by Meta, revealing the importance of long-term outcomes, with media generating 42%-76% of its total ROI through long-term sales and price premium effects.
Why measuring marketing effectiveness matters
By balancing the short- and long-term impact of advertising, companies can maximise the value of their marketing investments and gain an advantage over their competitors. Achieving this is not easy, and companies must set the right KPIs, measured in the right way, with advertising that is regularly tested for effectiveness.
- Optimising only on short-term outcomes can result in brands missing out on incremental growth opportunities in untapped audiences and markets.
- To drive sustained growth, marketers must focus on total ROI, considering short-term conversions and long-term value.
- Having the analytic capabilities and KPIs in place to evaluate media investment across short- and long-term outcomes is essential to unlock growth opportunities in a fragmented media landscape.
- Businesses need to build this capability internally or externally to make informed media decisions.
This article first appeared on www.warc.com
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