Total ROI judges a channel, marginal ROI decides where the next euro goes
PrincipleBrand Strategy
Total ROI judges a channel, marginal ROI decides where the next euro goes
Total ROI measures a channel's overall efficiency in converting spend into revenue. Marginal ROI reveals the value of each additional unit of spend, answering what more budget would actually deliver. Total ROI assesses performance; marginal ROI guides allocation. Optimising investment requires both.
Source
The Effectiveness Equation - Google Market Insights EMEA, with Kantar, Nielsen, Ekimetrics, Ipsos MMA, the Behavioural Architects and WARC (2025)
Michal Protasiuk, Ahmet Bas, Jonas Christensen, Vanessa Bruns, Emily Allen and Jonny Protheroe (Google Market Insights, EMEA)
p. 22, The Effectiveness Equation (2025)
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PrincipleMarketing measures itself on only one side of the profit equationStatMost organisations have no agreed definition of what marketing effectiveness meansStatBrands with pricing power command roughly twice the price of brands without itStatPricing power comes from meaningful difference, not from salienceCaseA UK skincare brand turned a 2% revenue increase into 7% by lowering its price elasticity firstPrinciplePromotion-heavy communication raises price sensitivity; balanced brand building lowers itStatPricing power and resistance to price rises correlate strongly and measurablyStatHalf of advertising's sales effect arrives after the fourth monthStatMedia returns peak with roughly half to sixty per cent of the budget in brand buildingStatRaising brand awareness lifts short-term sales as well as long-term onesWarningWinning back share costs nearly twice what cutting the budget savedWarningEvery dark quarter costs future revenue that takes years to rebuild