Updated: Jun 22
We recently asked a group of CPG brands to tell us their most commonly used commerce campaign metric. Over a third quoted ‘driving a positive return’.
Whilst we were unsurprised by this result, a focus on driving return as a primary metric can result in a short-term approach to campaign planning.
Furthermore, a recent study by Business Wire revealed while 84% of marketers are under pressure to prove ROI to justify their marketing spend, 40% state their marketing, sales, and finance teams aren’t aligned on what successful ROI looks like.
Our advice when setting campaign metrics would be to always manage a range of objectives that work ‘through the funnel’, with an increased focus on consideration. However, during this period of economic uncertainty when brand budgets are being squeezed tighter than ever before, it’s likely ROI will remain a primary metric for the foreseeable.
With this in mind, it becomes critical for marketers to better understand the varying factors that impact ROI in relation to their brand and media choices. Here are our top considerations when setting ROI as a primary campaign metric.
Take into account the size of your brand when setting ROI targets
We encourage brands to be ambitious with their target setting. However, data tells us brands with base sales per store per week of £100 to £200 will deliver an average ROI of £1.19. This more than doubles to £2.64 when the base sales rise to £1,000+.
Take your brand category into account when setting ROI targets
Price and frequency of purchase impact base sales, which in turn impacts ROI. For example, the BWS category has a typically higher price point, meaning these campaigns don’t need to sell as many incremental units to drive a return, with the category often yielding an average £3.42 ROI.
In comparison, some ambient products struggle against a lower price point and a lower purchase frequency, causing the average ROI for the ambient grocery category to sit at £1.17.
Choose media channels that generate a high volume of impressions across many stores for a stronger ROI
Our data showson average, media that generates more than one million impressions delivers a positive return for the brand, with 10 million impressions and above driving ROI above £3.
Media cost has a significant impact on ROI
If your objective is to drive a strong return, consider channels that cost lower than £350 per store at a brand level. Anything above this is likely to drive a negative ROI.
But media channels across all points of the shopper journey deliver a positive return at brand level
The good news is, our data shows ‘secondary space’ and ‘at fixture’ channels deliver the strongest performance at an average ROI of £4.10 and £3.16 respectively.