Brand-building is critical to the long term success of business performance. People are increasingly spending more time on digital channels; in fact, according to Global Web Index, consumers spend 72% of their media time on digital channels. With a heightened focus by marketers on return on investment (ROI) due to inflation and the economic downturn, the question of whether you can build a brand with digital channels has become an important one.
New independent research by Nielsen, Nepa and GfK and commissioned by Meta, addresses this question and shows that digital advertising and Meta apps contribute to long-term ROI. Using advanced marketing mix modeling, five studies were conducted across different European countries and categories – including CPG, Tech & Durables and over 3,500 campaigns, – to calculate the short-and long-term ROI of advertising across different media channels.
The research showed that:
- Brand-building is a critical element to the long-term success of business performance. Businesses are undervaluing the total value of advertising if they don’t measure long-term impact.
- Across all studies in this analysis, the long-term ROI made up almost 60% of Total ROI.
- Digital channels like Facebook, Instagram, online video and digital display have significant long-term revenue impact for brands.
- Facebook and Instagram outperformed TV in terms of Total ROI (combining short- and long-term ROI) in four out of five studies.
- Meta’s apps drove 52% higher Total ROI than the average channel.
The results also indicate that the size and relevance of the long-term impact effects of advertising vary significantly by industry:
- Almost 80% of the total ad spend in Tech & Durables generated long-term returns.
- The short-term ROI in CPG outweighed the long-term ROI, at 42%. However, even in CPG, long-term effects were found to add a significant amount of additional ROI, which would not have been measured by looking only at short-term impact.
The ROI for Heineken
Heineken, one of the brands participating in the study, saw its Ad Spend ROI on Facebook and Instagram increase by 71% when long-term effects were taken into account.
“The observed long-term effect of our investment in digital platforms changed our perception of the role digital can play in our communication mix, [by demonstrating that digital makes an] important contribution to the mental availability of our brands in the long-term.” — Alberto Tucci, Head of Media and Digital for Italy and Spain at Heineken
Experimentation is also key to success. Tucci says Heineken operates a “learning agenda,” which results in constant improvements to their advertising approach, and joins the dots between performance marketing and brand-building.
You can listen to more from Alberto Tucci in this video interview.
Best Practices to Drive Long-Term Impact on Meta
The research showed that brands are undervaluing the contribution digital advertising makes if they only look at its short-term effects. It also identified ways that brands can drive long-term growth on Meta apps:
- Target broad audiences: Campaigns that target broad audiences are important for driving long-term brand ROI.
- Use multiple formats, including video.
- Aim for sufficient exposure: Frequency is the average number of times a person is exposed to an ad campaign. Advertisers should aim for a frequency of two or more per week.
- Run campaigns for longer periods of time: Longer campaign periods are more effective at driving long-term sales through brand-building.
Read a summary of the key report findings.
