Marketing Against The Grain

ROAS Is a Trap: How Smart Marketers Really Drive Growth

Aug 6, 2024

The discussion highlights the pitfalls of overrelying on Return on Ad Spend as a marketing metric. The hosts push for a more nuanced understanding of customer acquisition and the need for incremental measures. They also critique Nike's recent focus on performance marketing, advocating for a richer strategy balancing direct returns and brand awareness. Additionally, listeners are treated to anecdotes from the Olympics, showcasing thrilling moments in sports and innovative advertising opportunities.

31:45

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Quick takeaways

Relying solely on Return on Ad Spend can obscure meaningful metrics and stifle long-term marketing growth opportunities.

Utilizing the incrementality model and focusing on brand awareness can better capture new customers and drive sustainable success.

Deep dives

The Flaw in Advertising Metrics

Traditional advertising metrics, such as Return on Ad Spend (ROAS), are increasingly seen as inadequate for measuring marketing effectiveness. While ROAS provides clear insights into the return generated from spending, it also allows for manipulation, as marketers can adjust spending on retargeting or discounts to achieve desired figures. This reflects a broader issue within marketing where easier-to-measure metrics may overshadow more meaningful, albeit complex, indicators of success. As businesses evolve, a shift toward recognizing the limitations of ROAS is essential for adopting a more accurate and holistic approach to measuring advertising effectiveness.

The 3-Buckets Advertising Framework

04:01

Control Your Growth: Beyond Advertising

02:21

Master the Funnel: Focus on New Interest

01:16

Intro

3min

Rethinking ROAS in Marketing Metrics

13min

Balancing Advertising Strategies

8min

An Unforgettable Day at the Olympics

2min

Exploring the Olympics and Rethinking Marketing Strategies

3min

Ep. 249

"Is putting all your eggs in the ROAS basket stunting your growth?"

Kipp and Kieran dive into why relying solely on Return on Ad Spend might not be the smartest move for marketers aiming for long-term success. Every marketer needs to understand the significance of building their own audience, the true impact of paid advertising, and navigating the complex world of marketing metrics.

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