- Successful advertisers achieve an average profit return on investment (ROI) of 2.26:1.
- As most case studies on WARC list short-term results, the long-term return will often be higher.
Successful advertisers achieve an average profit return on investment (ROI) of 2.26:1, according to an analysis of WARC's database of 1,169 case studies of successful advertising campaigns.
This means that, on average, every dollar invested brings an additional $2.26 of net profit after excluding the cost of the campaign.
As most case studies on WARC list short-term results, this is an approximate guide to short-term payback and the long-term return will often be higher.
Profit ROI (also known as ROMI or payback) can be a useful measure for advertisers because it allows you to compare the efficiency of different campaigns with different budgets. It also allows you to compare the return from your campaign with the returns from alternative investments. However, as an industry, marketing has often misused ROI, mistaking it for a goal instead of a measure of efficiency.
Additional research shows that the return on investment is highest when 40-50% of the advertising budget is spent online, while brand messaging outperforms product or performance messaging four-fifths of the time. Having a greater focus on long-term effectiveness is also important, especially for B2B brands.
WARC's latest report also finds that automotive and retail advertisers achieve the highest return on investment. However, the competitive nature of big-budget categories like food, toiletries & cosmetics and soft drinks mean their average profit ROI is below the all-sector average.
MORE FROM WARC
- ROI benchmarks report
Using its database of effective advertising campaigns, WARC analysed 1,169 case studies that contained ROI information.
The B2B Institute at LinkedIn, in partnership with WARC and Lions, undertook a major study to analyse the effectiveness of ten years’ of B2B marketing campaigns and to replicate Lions and WARC’s B2C study The Effectiveness Code.
Advertising doesn’t share its lessons when it’s not trying to win awards.
Source: warc.com
