In a moment of transformation for marketing, marked by algorithms and generative artificial intelligence, pressure grows to achieve results, especially in the short term. However, an incomplete approach to advertising, that is, with excessive focus on the performance or brand construction, It can generate losses for companies.
This is collected by the report “The Multiplier Effect”, prepared by WARC in collaboration with Analytic Partners, Bera.AI, Prophet and System1. The document, which offers an investigation into advertising efficacy, aims to help optimize strategies and generate long -term sales and value.
Ultimately, it is a brand defense as a commercial performance accelerator. And although the data focuses on the United States, the conclusions are extrapolable to everyone.
Here are the main conclusions of the report:
Inaccurate metrics can generate excessive focus on performance
The vicious circle of inaccuracy
The WARC report points out that over the last years advertising investment has put the focus on performance and the search for immediate results, Partly due to the rise of the digital ecosystem, an unstable economic context, the fragmentation of attention and other changes in media consumption habits.
The commitment to performance is based on the promise of immediate results (clicks, visualizations, etc.) and its constant optimization. However, consultants indicate that a large part of the metric is misleading, incomplete or inaccurate, since they respond to simplified attribution models and that tend to ignore other influences on Customer Journey.
Moreover, Analytic Partners data suggests that the attribution model “last click” overestimal the impact of the PAID SEARCH in 190%, while they can devalue the impact of television by 90%. This generates what Warc calls “doom loop”, that is, a Vicious circle of inaccuracy which can lead advertisers to invest in excess of performance.
Performance and brand combination
This is not the first report that reflects on the advantages of Combine investment in performance and brand construction advertising. The data offered by Analytic Partners suggest that the greatest profitability occurs when both approaches are part of the strategy.
Specifically, the consultant points out that moving from an approach based solely on performance to a mixed one can generate a Improvement of the ROI higher between 25%and 100%, with an average increase of 90%. On the other hand, moving on to an approach based solely on performance from a mixed one can generate a 40%ROI decrease.
From WARC they point out that brand construction has effect on people who are still part of the consumer base of a company, so it serves to increase the chances of considering the brand when the time comes to make a purchase.
This theory is reinforced with the findings of System1, which indicate that 92% of the brand ads had good short -term performance And they created demand among consumers who are ready to buy, in addition to generating long -term value.
The multiplier effect
Taking as reference the evidence cited, from WARC they consider that the key maximizing advertising investments is to stop understanding performance and brand construction as separate activities, and instead, understand them as codependent and integrated. In other words, the approach should not be a brand + performance, but X Performance brand.
This means that brand construction advertising can boost sales in the short term, both today and in the future, and that performance -based advertising can reinforce the brand. To achieve this, the report transfers a series of recommendations:
- Assign at least the 30% of the budget to brand construction adsalthough the recommended practice raises that figure between 40% and 60%
- Although the Investment in Search It will vary according to the brand and category, dedicating more than 25% of the budget to this channel should be an alert signal
- Avoid thinking about Silos when planning campaigns, and instead, think about Full-Funnel creative platforms in which different types of assets are reinforced with each other
- Build one Integrated measurement approach and consider long -term impacts
Although the multiplier effect approach will not solve all the problems of brand advertising strategies, it may imply an important advance towards a new marketing stage. Other issues are still to be addressed, such as how advertising fits with other ways of generating value, how to optimize creativity or how to highlight its value before the financial departments.