How to Measure the Financial Impact of Brand Marketing

Measurable Brand building got us off of the direct response hamster wheel, finally helping us generate the meaningful contribution dollar expansion that contributed heavily to our acquisition. How did we actually do it? Here are the EXACT STEPS that worked for us (after doing it wrong for way too long).


*Why build Brand in first place?

Relying strictly on direct response generated a high ROAS, but wasn't helping us drive important metrics like contribution dollars & margin. If this resonates, I hope this helps.


* 5 Realizations we had

1. With every marketing dollar you invest, we're buying assets
2. Our job is to buy the assets that return the max contribution dollars at the max contribution margin over the long term
3. The assets we buy are actions people take that lead to cashflow streams paying out over different time horizons
4. The key is choosing which actions to invest in based on the spread btw the cost to buy and the cashflows generated
5. Revenue-based actions pay out in the short term. Non-revenue actions pay out over the long term. If we can value the non revenue actions like we can a short term purchase action, you give your company the best chance at maximizing contribution dollars


* Find Non-Revenue Dependent Variables

First, we found other dependent variables to optimize our marketing activities around. We call these things Short-Term, Non-Revenue Digital Actions. Like revenue, they serve as the short term 'response' to the stimulus (dollars spent).

An engaged session from branded search is an example. Other examples: Organic search volume, share of search, share of social, email / sms list adds, or social interactions (follows, shares, comments).

A super-easy-to-remember (not) acronym is STNRDA.


* Find $ Values of STNRDAs

The huge unlock happened when we could calculate the 90 day contribution $ value of a unit of these STNRDAs.

* How did we do this?

1. Historical analysis (ideally >2 years) to find the strongest statistical relationships between changes in STNRDAs and subsequent changes in revenue. Doing this for all STNRDAs is not easy. It requires huge investments in people (data science and eng), and technology.

2. Now that you have the dollar value, quantify your threshold max cost to 'buy' a unit of each of these STNRDAs

3. Now that you have the dependent variable you're optimizing, maniacally focus on getting really good at driving that metric with your channel / tactic / creative decisions

enjoy
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Thanks for reading. If this post was helpful, here are 4 things you can do right now to 

• Get more strategic + tactical nuggets on brand building, 

• Tactics on connecting brand building to financial impact, 

• And specific things you can do to build strong emotional connections with your audience: 

1) Subscribe to the Brand Builders podcast on YouTube or Spotify, and Apple Podcasts. 
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3) Follow Tom and Preston on Linkedin for regular posts on this stuff
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