Rethinking Marketing Effectiveness: Moving Beyond ROI
In today's marketing landscape, the age-old adage "Half of my advertising is wasted; I just don't know which half" still rings true. Proving marketing effectiveness remains a top challenge for marketers, despite having access to sophisticated tools and data.
The traditional focus on return on investment (ROI) often leads marketers to prioritise short-term gains at the expense of long-term brand building. As Peter Field, co-author of "The Long and the Short of It," cautions, an excessive focus on ROI can be "insanely dangerous" as it teaches marketers to go after low-hanging fruit rather than pursuing sustainable growth.
So, what should marketers measure if not just ROI? The answer lies in balancing short-term and long-term objectives through a "return on objectives" approach.
The Four Elements
Set clear objectives aligned with strategy
Track execution against the plan
Measure campaign results
Capture learnings and feed them back into the next cycle
While straightforward in theory, implementing this cycle is challenging. Common barriers include lack of clear objectives, inability to track progress, blame culture, short-term pressures, and failure to course-correct.
To unlock marketing effectiveness, brands must embed a "return on objectives" mindset and build capabilities within their marketing teams. This involves:
Planning activities to deliver core objectives: Focus on influencing specific behaviours, perceptions, or attitudes tied to your objectives, not just increasing sales or revenue.
Measuring the right things: Group KPIs into output (ultimate results like increased trial), input (execution metrics to achieve outputs), and efficiency (results per effort/investment).
Integrating strategy, plans, and execution: Ensure line of sight from long-term strategy down to individual activities and vice versa.
Linking volume and profit objectives: Only when they are the core objectives, not automatic defaults.
Fostering a learning culture: Move from justifying activities to learning, improving, and building creativity.
Prioritising what to measure: Focus on critical metrics, not everything.
The benefits of building this capability? Studies suggest a 3-8% potential improvement in top and bottom-line growth. Yet 60% of marketers still lack the right approaches.
Ultimately, marketing effectiveness requires a mindset shift - from "I think" to "I know" - by aligning objectives, building capabilities, and generating sustainable revenue growth through excellence in execution.
The Path Forward
Conduct an honest assessment of your organisation's biggest needs around objective-setting, measurement, and learning.
Start with high-impact areas, getting leadership support. Don't try to overhaul everything at once.
Embed processes that link strategy to execution, foster transparency and accountability, and enable continuous improvement.
Invest in building marketing teams' capabilities around objective-setting, measurement, and evaluation.
Balance long-term brand objectives with short-term performance goals.
In today's results-driven environment, it's tempting to fixate on short-term ROI. But the path to sustainable growth lies in a mindset anchored on "return on objectives" - balancing immediate performance with long-term brand equity.
Contact us to discuss how to build Objectives effectiveness into your next campaign
