Changing the marketing equation yields 90% more revenue returns, WARC suggests

Changing one math symbol in a marketing equation may make all the difference to return on investment (ROI) — especially at a time when economic uncertainty has thrown a new volatile variable into the mix.

Marketers often think of brand and performance budgets as separate and of their effects as simply additive: brand + performance.

But a landmark 100-page report from WARC released in January, titled The Multiplier Effect, argues the two are not independent variables. They are in fact highly correlated: brand x performance.

Building brand equity can be a multiplier that drives additional impact and greater efficiency from performance advertising.

With budgets under heightened scrutiny, this conversation takes on new urgency — yet paradoxically, it may be harder to have. That’s why The Current spoke with David Tiltman, chief content officer at WARC, to revisit key insights from The Multiplier Effect in the context of today’s unpredictable economy. Tiltman shares how marketers can drive more effective campaigns — and make a stronger case for budgets with CFOs.

This interview has been edited for length and clarity.

The report came out before tariffs upended the global economy. Are there themes you’d say are applicable now even more than usual?

There’s this growing siloization of brand and performance astwo different teams with different budgets and different incentives.

Now, that is a very dangerous place to be because that’s exactly the sort of organization where performance advertising will be maintained, but the brand bit — which is seen as being less tied to commercial outcomes — starts to get cut back.

What we found was that there’s a lot of value to unlock by thinking of the two things as an integrated growth strategy.

So rather than cutting brand investment to preserve performance advertising, are there ways that you can, even if you have to make cuts, still make those things work hard together? For example, a single creative platform that runs through both, or not replacing hardworking media assets that still have life in them?

Are there things you can do to unlock value simply by creating greater points of integration?

How can marketers best prepare themselves to advocate for budgets with CFOs?

We’re trying to take some of the language away from brand versus performance, which are both problematic terms, and talk about how advertising has two jobs to do: nudge people to purchase now and build favorable brand associations for later.

CFOs understand the concept of a balanced portfolio. So, one thing that we found quite interesting is to talk about advertising as a portfolio investment, to make this shift from talking about very narrow channel ROAS (return on ad spend) to more of a portfolio return.

And we do prove this out with the data: There are much higher revenue returns from a combined approach — not just in two years’ time, but within a relatively short period of time.

One key point was that attribution-based measurement often overestimates the contribution of channels closest to the point of purchase. Why is that?

It’s easy, but it’s not robust. That’s the problem. The numbers look accurate, but they are often misleading, particularly if not used with caution.

The two big issues are that these models do not have visibility of anything that happens outside of that purchase journey, and they also have diminishing returns.

Just because you get a high ROAS on a certain level of spend doesn’t mean you’ll keep getting the same ROAS if you double the spend.

We call this the “doom loop.” A lot of people can see this happening in their own business or their clients’ business.

As people start hitting diminishing returns, they optimize against metrics which aren’t comprehensive and shovel more money into platforms that maybe have already maxed out.

Then performance keeps plateauing. People are trapped in a view of the world that is built on faulty metrics.

What’s one big takeaway people should remember from the report?

Revenue ROI from a combined approach is much higher than with a performance-only approach. That didn’t surprise me. What surprised me was the scale of the difference.

You can get 25% to 100% more revenue returns from a combined approach than you can from performance-dominated approach, with a median at 90%.

That difference is huge. We’re talking about a massive increase in marketing effectiveness.