What it means
The average campaign in the WARC database delivers a sales increase four times as high as the advertising investment.
Over the same 2017-2022 period, the median profit ROI has grown 24% from 1.9:1 to 2.36:1 – so every dollar invested brings an additional $2.26 of net profit (having excluded the cost of the campaign in the calculation).
Why it matters
Understanding return on investment is an important way for advertisers to assess the efficiency of their advertising expenditure – and the improvements to ROI (profit or revenue) over the last five years show advertisers are investing in campaigns with greater levels of efficiency.
While this is encouraging, it is important not to confuse campaign efficiency with campaign effectiveness. As experts such as Tom Roach have argued, an over-reliance on ROI can distract marketers from focusing on what really matters: the absolute amount of profit or revenue generated by an activity.
Marketers should heed this advice and be mindful when using ROI to assess the impact of their campaigns.
ROI can vary widely between campaigns and categories, with a short-term impact from less than 1:1 to more than 10:1.
ROI figures in the WARC database are mostly calculated within a one-year timeframe, but evidence strongly suggests the long-term impact of advertising is approximately twice the short-term impact.
WARC subscribers can read the ROI Benchmark report in full here.