Seven in ten ad campaigns fail to generate meaningful ROI | WARC | The Feed
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Seven in ten ad campaigns fail to generate meaningful ROI
Measuring ROI Effectiveness studies Strategy
Seventy percent of ad campaigns generate a return on investment (ROI) that calls their profitability into question, according to research presented at the Cannes Lions International Festival of Creativity 2022.
That finding came from a study incorporating 343 campaigns, accounting for £5bn in adspend, in the Advertising Research Community (ARC) database, an effectiveness resource developed by Dr. Grace Kite, the founder of UK-based analytics consultancy Magic Numbers.
About the research
- All the featured campaigns have been subject to econometric modeling to assess the drivers of their ROI, whether good or bad.
- The ARC database also mixes award-winning programs with initiatives which have not received such honours.
- As such, it represents “everyday” work alongside the best-in-class output that is put forward to compete for industry-level recognition.
A “concerning” trend
- In all, seven in ten of the ARC campaigns returned less than £2 in revenue for every £1 spent. (WARC subscribers can read more here.)
- This is a “concerning” figure, reported Stuart Heppenstall, principal consultant at marketing effectiveness consultancy Data2Decisions, who presented the findings.
- “Marketing often is paid for out [of] profits, and has to show that it can pay for itself,” Heppenstall said in a session held by WARC, entitled “Creative Commitment: New Learning from the ARC Database”, at Cannes Lions.
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