A new report from the marketing effectiveness consultancy, “Measure, Thrive, Optimize: How to Demonstrate Advertising's Value and Boost Growth”, is based on an analysis of 75 company-market combinations across multiple industries and markets; and it used Marketing Mix Modelling to understand key contributors to revenue and isolate the impact of advertising on overall revenue.
Other key findings
- Companies that measure and optimise advertising contribution experience a 0.7 percentage point increase year-over-year, equivalent to $70m additional revenue for a $10bn company.
- Optimisation improvements (0.4%) slightly outpace increased investment (0.3%) in driving contribution growth. Marketers need to both spend more and spend wisely.
- Two primary measurement techniques are recommended: Marketing Mix Modelling (MMM) for larger companies with complex media strategies, and A/B testing for smaller companies with simpler approaches.
Why it matters
“The data speaks for itself – advertising is not a cost centre, it's a growth engine,” says Matthew Chappell, global client success officer at Gain Theory. And, he argues, even more compelling than the ROI figure is the fact that “companies actively measuring and optimising their advertising contribution are seeing year-on-year growth”.
That’s more important than ever in a market of volatility where marketing teams are under immense pressure to deliver budgets under scrutiny.
Source: warc.com, Gain Theory