Undoing Some of the Assumptions of What is a ‘Performance’ Channel:


Is it time to retire brand vs performance as a model for ad investment?

Key takeaways:

"All media 'perform' over both the short and long term, but some have a greater carryover."

Linear TV's long term multiplier is 3.3x, way above the 2.2x average of other media.
- “That makes sense because video has an unrivalled ability to build memorability – which obviously translates into bigger long-term effects and the ability to change perceptions.”

Paid Social, Online Display & Video are less efficient.
- They hit diminishing returns faster and to plateau off, becoming less effective at relatively modest amounts.
- "That’s partly because obviously, in those channels, we’re using all the data signals to find really precise, targeted audiences. That’s what their strength is. And those audiences are, by definition, finite and not as broad.”


58% of the profit effects from advertising happen after the first three months


Generally, the scale of the advertising spend increases the profit effects.

The WARC article has more charts and more detailed writeup. 





I was struck by the great new Thinkbox Profit Ability research, and in particular this comment from one of the researchers (as featured in the WARC write-up - link in comments).

“In our opinion, brand and performance as a terminology doesn’t really affect how advertising is actually paying back,” said Jane Christian, Managing Director Analytics & Insight at EssenceMediacom UK.

"We think it’s better to think about scale efficiency and time as the dimension that should direct what your optimal media mix is. I think that the sooner that we move away from that brand-performance distinction, the better.”

I'm starting to hear this from a few sources now. Brand/performance is a great mental model, but doesn't neatly operationalise. And, let's face it, when it comes to budget allocation, performance marketing almost always wins. The clue is in the name.

As the research shows, all media 'perform' over both the short and long term, but some have a greater carryover.

(There's a lot more coming up on this on WARC later in the year - watch this space!)

I used the first round of Profit Ability a lot after in came out in 2018. I suspect I'll be using this round a lot too!

Also interesting is that the old rule of thumb that the full impact of advertising is roughly double the short-term impact seems to hold true.

h/t to Thinkbox, EssenceMediacom, Gain Theory, Mindshare, Wavemaker and Ebiquity plc for some quality data!

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