Many marketers are flying blind when it comes to measuring full-funnel effectiveness—and it’s causing missed revenue opportunities.
Nearly two-thirds of global marketers surveyed for Nielsen’s 2022 Annual Marketing Report say measuring full funnel ROI is extremely or very important, but only 54% are extremely or very confident in their ability to measure ROI properly.
Lack of confidence in full-funnel ROI measurement isn’t surprising, given that typical martech providers don’t account for both upper- and lower-funnel marketing efforts in the same solution. This oversight can be costly, as brand awareness is critical to hitting long-term goals. On average, a 1-point gain in brand metrics such as awareness and consideration drives a 1% increase in future sales, according to Nielsen’s research.
And if you’re only measuring half your funnel, you’re missing half the picture, as channels rarely perform well on both sales and brand outcomes—in fact this only happens in 36% of cases1. That means that about two-thirds of the time, a media channel will be weak for at least one of the two goals.
That’s true even for a medium that’s known for its brand-building power: TV. On average, television is one of the most effective vehicles for driving brand lift. However, results can vary largely based on campaign type or even changing seasons. In 31% of Nielsen Marketing Mix global studies, for example, we found that TV was below average in producing brand lift. In a separate 45% of studies, it was in the top 20% bracket. With so many variables affecting outcomes, it’s easy to see why marketers are struggling to find a winning funnel formula.
But, as with most marketing challenges, measuring channel effectiveness and optimizing your marketing funnel becomes much more manageable with data. Take the case of channel spend: Without the benefit of data to help determine where dollars should be allocated, marketers will normally double down on the channel that received the largest investment simply because it also produced the largest lift. And, while Nielsen data shows that the most-funded channel will produce the highest brand lift about 70% of the time, it should only be the first channel to get incremental investment 4% of the time2.
To increase the effectiveness of each channel, and to get a more complete picture of how their entire funnel is performing, marketers should measure each part of the funnel separately. Because upper-funnel messages will likely boost brand metrics, and lower-funnel messages will likely boost sales, mixing the two together in one metric may not give you the information you need to adjust your spend for maximum impact.
Running marketing mix models (MMMs) will help optimize channel mix for short term-sales, and a second analysis can then be done to optimize channel mix for awareness or other upper-funnel metrics. This approach addresses the need to meet short-term sales goals while seeding long-term growth through brand building. Finally, marketers should look at both upper- and lower-funnel plans and weight them based on larger organizational goals.
A well-balanced marketing funnel supports both immediate revenue needs and long-term ambitions. It’s important to remember that ROI is a long game, and media plans that balance those short-term lifts with continual brand building will realize better outcomes down the road.
For more insights on how to grow brand and sales together, visit Nielsen’s new full-funnel marketing hub.
Source:
1Nielsen Marketing Mix models
2Nielsen Total Media Resonance
