Marketing effectiveness research shows equal impact in months 5-24

A recent study by Google and industry partners highlights that marketing efforts continue to deliver significant value long after campaigns end, with months 5-24 showing returns equivalent to the first four months. Released earlier this week, "The Effectiveness Equation" report examines how businesses can better measure and communicate marketing's full business impact.

The collaborative research, developed with partners including Nielsen, Kantar, Ekimetrics, the Behavioural Architects and WARC, addresses persistent challenges in marketing effectiveness measurement. The findings come at a time when only 40% of senior marketing decision-makers believe their organization has a clear effectiveness goal, and just 20% agree on how to measure it.

According to the report, this misalignment creates real commercial risk: "When CMOs can't demonstrate the full impact of their work, marketing investment can suffer, ultimately undermining business growth."

Through extensive analysis of marketing effectiveness studies, researchers identified six key insights that help organizations better measure and communicate marketing's full business impact. These insights span short-term versus long-term returns, optimal brand-performance balance, pricing power, cross-functional collaboration, first-party data advantages, and the importance of sustained investment.

Long-term impact equals short-term gains

One of the most striking findings reveals that marketing returns during months 5-24 match those of the first four months. Despite this evidence, businesses routinely undervalue these carryover effects in their measurement approaches.

Steven Rampersad, Principal Analytical Consultant at Google, emphasized the significance of these findings in a LinkedIn post: "Knowledge is Power, Data is Knowledge and the Data is clear: brand building pays off, both in the short and long term. Yet, many marketers are still under-investing."

He added, "Our latest research reveals a critical insight: marketing returns in months 5-24 are just as valuable as those in the first four months. The 'carryover effect' is real, but often overlooked."

The research demonstrates that investing in brand awareness delivers benefits across multiple timeframes. According to the report, "a 1% increase in brand awareness typically drives a 0.6% lift in long-term sales, while also boosting short-term sales by 0.4%." This dual effect challenges the notion that marketers must choose between immediate results and long-term brand building.

Balancing brand and performance marketing

The report also addresses the optimal balance between brand-building and performance marketing. For e-commerce brands, media effectiveness peaks when 40-60% of investment goes to brand building.

Analysis of European brands' e-commerce ROI between 2020-2023 showed that the highest return on investment occurred when the split between brand and performance marketing approached this balance. This finding challenges the recent trend of shifting budgets heavily toward performance-driven tactics.

Strong brands command premium prices

Beyond driving sales volume, the research demonstrates a clear connection between brand strength and pricing power. According to the report, strong brands consistently command prices up to twice those of weaker brands in the same category.

This pricing advantage becomes especially valuable during economic uncertainty. The research examined real cases where brands with strong pricing power experienced less volume decline when raising prices. In one example, a UK skincare brand increased prices by 14% but saw only a 7% decline in sales volume after reducing its price elasticity from -0.7 to -0.6 through brand investments.

"There is a clear link between brand strength and pricing power, with strong brands consistently commanding prices up to twice those of weaker brands," the report states. Analysis showed correlation coefficients of 0.76 for the UK and 0.65 for Germany in the skincare category between pricing power and price elasticity.

Marketing-finance collaboration gaps

The research identified significant disconnects between how marketing and finance departments perceive collaboration. While both functions acknowledge that marketing drives business growth, their perspectives on company priorities diverge significantly.

Almost half of marketing decision-makers named brand building as the top company priority for 2024-2025, but it didn't make the top five priorities among finance decision-makers. Similarly, while finance leaders rated the quality of cross-departmental collaboration highly, their marketing counterparts consistently scored it lower across multiple dimensions.

One Marketing Director quoted in the report observed: "I think CFOs feel they have more control than they do. They see the outcome and challenge it but aren't involved in the detailed planning. So while they might say it's collaborative, by the time the plan reaches them, most of the work is done."

First-party data creates competitive advantage

The research also examined how first-party data can create significant competitive advantages, especially for challenger brands. Experiments across eleven product categories showed that personalizing marketing messages using consumer-provided information could help brands gain between 10 to 26 percentage points in preference share from category leaders.

"By testing the impact of personalization on completely invented brands against market leaders, we were able to simulate the appearance of new market entrants," the report explains. "Our findings suggest that if challenger brands can activate their first-party insights more quickly and completely they can gain an advantage against even the most established category leaders."

Cost of cutting marketing investments

Finally, the research quantifies the often-overlooked cost of reducing marketing investment during economic downturns. Analysis shows that regaining lost market share typically requires approximately $1.85 for every $1 initially saved through cuts.

The report cites a footwear brand case study where one major player reduced marketing spend by 40% during economic uncertainty while their primary competitor maintained investment levels. Within six months, the competitor increased brand awareness by 15% and consideration by 11%.

"Strong marketing doesn't just drive immediate returns—it builds brand equity that acts as a competitive moat, protecting market position and pricing power," the report explains. "When brands reduce their presence in the market, they don't just pause their progress; they begin an active retreat that simultaneously drains this moat and depowers their growth."

Evolving measurement approaches

The report highlights how measurement approaches must evolve to capture marketing's full impact. It suggests combining attribution, marketing mix modeling, and targeted experiments to create a more complete view of effectiveness.

Dr. Daniel Knapp, an economist quoted in the report, observes: "There is a clear gap between the deterministic world of finance and the probabilistic world of marketing." This gap requires new approaches to measurement that can satisfy both perspectives.

The research concludes that success will come to organizations that measure carefully, make evidence-based cases for incremental spending, and act decisively when others hesitate. As privacy changes continue to reshape the measurement landscape, demonstrating marketing's full value contribution has become increasingly important.

Timeline of key research findings:

• 2021-2024: Kantar and GFK analyzed data showing correlation between pricing power and price elasticity in the skincare category
• 2017-2022: Ekimetrics meta-analysis of hundreds of marketing effectiveness studies reveals equal value of marketing returns during months 5-24 compared to the first four months
• 2020-2023: Ipsos MMA analysis of European brands shows e-commerce ROI peaks when 40-60% of investment goes to brand building
• 2022: BCG brand impact analysis of nearly 150 US brands shows regaining lost market share requires $1.85 investment for every $1 initially saved through cuts
• 2023: Google/Kantar survey finds only 40% of senior marketing decision-makers believe their business has a clear marketing effectiveness goal
• 2024 (April): Google/The Behavioural Architects research on first-party data shows challengers can gain 10-26% preference share from category leaders
• 2024 (August): Google/Project X Initiative/Newton X survey reveals misalignment between marketing and finance perspectives on company priorities
• 2025 (March): "The Effectiveness Equation" report released, synthesizing these findings