The effectiveness of marketing is often questioned and difficult to measure accurately. Despite advanced tools and large amounts of data, it is a constant challenge to demonstrate the full impact that marketing has on a company's growth. Google has conducted extensive analysis and, in collaboration with industry experts, recently presented the report "The Effectiveness Equation", which takes a holistic approach to how companies can better measure and communicate the true value of their marketing.
Short-term ROI provides an incomplete picture
A key conclusion from the report is that the after-effects of marketing between months 5 and 24 often correspond to the results of the first 4 months. Yet many companies focus only on short-term ROI, which can give a distorted picture of the long-term importance of marketing.
The balance between branding and performance
The report shows that the best results occur when 40-60% of the budget goes to branding. Branding increases both short- and long-term sales effects, which underlines the importance of not neglecting long-term strategies in favor of quick ROI. If your brand is sensitive, you might want to stick closer to 60% in brand budget and then spend the rest on performance marketing – or vice versa.
Brands with strength withstand price increases better
A clear indication from the report is that strong brands have lower price sensitivity. This means they can raise prices without losing customers, sometimes up to twice as much compared to weaker brands. We have all bought a product at some point simply because of the feeling the brand gives us.
First-party data as a competitive advantage
The report also highlights the value of using first-party data to tailor messages to the target audience. Actively using collected data can increase brand credibility by 10–26% compared to competitors who don’t, which is crucial to challenging market leaders right now.
- Personalized marketing messages increase relevance.
- Use data to strengthen long-term customer relationships.
Continuous investments provide sustainable growth
Cutting back on marketing during recessions requires a disproportionate reinvestment later. For every krona saved, approximately kr1.85 is needed to regain lost market share. A stable presence in the market creates long-term brand value and protects against competitors.
Collaboration between market and economy is key
A recurring theme is the need for better collaboration between marketing departments and finance. Shared KPIs and closer dialogue between departments can lead to more efficient use of budget and clearer results.
Taking these insights and actively implementing them into your marketing strategy can make a big difference to your company’s long-term success. At Adfreak, we work daily to help companies understand and maximize their marketing potential – and Google’s “Effectiveness Equation” contains important insights to take with you into modern digital marketing.
Download the full report
