by Jim Lenskold

Can Brand Awareness Generate Measurable ROI?

Smart marketers know that building and maintaining brand awareness is an important part of marketing success. It’s not surprising that the question arising often is “how do I determine the value and ROI of brand awareness?” The reason it is asked so often is that business executives are not satisfied when marketers are reporting the outcome of their major marketing initiatives as “increased awareness” without any connection to how those initiatives influence purchase decisions and generate sales.

Awareness is the first stage in what can range from a simple set of customer funnel stages (such as awareness » consideration » intention » purchase) to a much more robust purchase funnel with many detailed stages. Marketers can’t shape perceptions, drive engagement, or motivate sales without first establishing an awareness of their brand. So awareness is an important metric to be measured as it can be a major barrier when trying to influence purchase decisions.

The challenge with managing marketing decisions with brand awareness as the primary metric is that it is possible to generate awareness only, without changing consideration, purchase intention or purchase decisions. Marketers must understand the strengths and weaknesses of the brand awareness metric, how to best use the metric to guide decisions, and how measurements can reflect both the contribution and gaps of awareness-oriented marketing.

Defining Brand Awareness

Awareness is the first stage in the customer purchase funnel since a potential buyer must be aware of your product or service before evaluating and consciously choosing to purchase your brand. Measurements of the early stages of the customer purchase funnel are dependent on surveys of perceptions such as awareness, consideration, preference and/or purchase intention. This is where the definition of brand awareness becomes incredibly important. If you are making the case that brand awareness has value, you must be able to articulate to executives the exact definition and the strategy for how you expect this will drive a financial contribution for the company.

When defining awareness, start with the very basic question, “aware of what”?

  • Awareness of the just the company or brand name? And is that defined as the ability to name your brand name unaided as a provider in your category or is an aided recall enough?
  • Awareness of the brand promise that you are communicating?
  • Awareness of key attributes or differentiators that are likely to influence purchase decisions?

Your strategy for how awareness will ultimately contribute to driving sales and financial outcomes defines the metrics you will use to measure the effectiveness of your brand awareness programs. There are three major categories of strategies that lead to different definitions of brand awareness.

Strategy
Connection to Financial Contribution
Generate a spike in awareness just prior to an integrated campaign to convert sales For this strategy, a short term lift in basic awareness and interest, as well as a favorable impression, could be enough to increase the effectiveness of your marketing initiatives that follow for engagement, demand generation, and sales conversion
Condition the target audience with awareness of key attributes and advantages Here the short term lift must educate potential buyers in order to increase the conversion rates and increase the customer value that result from your existing and new marketing and sales efforts
Re-position brand perceptions to gain new competitive advantages A long-term strategy to shape the brand requires building awareness of specific key attributes relative to competitors’ positioning on those key attributes to eventually lead to higher preference, sales conversion, and loyalty

Increasing awareness of a brand alone, without the benefit of helping customers reach the consideration stage, drive a purchase, or have a direct customer experience is likely to have a short life-span before awareness levels drop back to previous levels. On one hand, that means advertising and marketing is required on an ongoing basis to sustain awareness. On the other hand, in order to make the case that today’s awareness campaign is not intended to have any short term impact but will add value in the long-term, you will need to articulate a strategy that goes beyond just short term brand awareness.

With better definitions of your brand awareness metric in place and aligned to your strategy and expected outcomes on the funnel stages that follow, you are much better positioned to project and measure ROI of brand-building initiatives.

Evaluating Brand Awareness as a Primary Metric

While many people try to make the case for awareness, far fewer are pushing for similar metrics such as “consideration” or “brand preference” even though these metrics can be similarly captured in perception surveys. Understanding the slight difference between awareness and consideration should be enough to raise doubts on the use of awareness as a primary metric. Think about the group of potential buyers who indicate via surveys that they are aware of your brand’s products/services but not considering them. If your target audience knows of your brand and what it offers, yet is not willing to consider your brand in their purchase decision, how effective is that awareness?

Awareness without consideration can mean:

  • Marketing and advertising is breaking through but is not effectively attracting interest or generating a good understanding of what you offer
  • The target audience does not place enough importance on the attributes you are communicating to include your brand in their consideration set
  • The target audience is not purchasing in your category or not a good fit for your solution
  • Competitive brands have perceived or real advantages that keep your brand from earning consideration or preference
  • The target audience has experienced your brand and their awareness is more negative than positive
  • The target audience may not be active in the buying cycle and has not yet weighed out your brand messages against their needs (i.e., they are not yet an educated buyer)

Each of these raise questions that may never get addressed if the marketing objective is limited to awareness, but are more likely to be researched and addressed if the marketing objective is to drive consideration.

There are a number of reasons why brand awareness should not be managed as a primary marketing metric or objective.

  1. Awareness without consideration is not likely to influence purchase decisions so at a minimum, consideration is a better metric
  2. Awareness is rarely found to have a correlation to sales volume and is therefore not a good predictive indicator of future sales
  3. Awareness can be very misleading since marketers can generate greater awareness by neglecting their brand attributes and being overly creative
  4. A brand awareness increase is not necessarily positive as companies like BP and Toyota know all too well

While brand awareness is not recommended as a primary metric, it still provides insight that can unlock value and drive ROI when used correctly.

Using and Improving the Awareness Metric

Brand awareness does work very well as a “diagnostic” metric where it is used to understand why other primary metrics may be under-performing. If sales volumes or brand preference are down, an evaluation of the awareness metric may indicate that current marketing is not breaking through.

In addition to developing a very clear definition as outlined above, some general rules for improving the quality and importance of metrics such as awareness include:

  • Place increased weight on your primary target audience segments to understand how your marketing is impacting the segments that matter. For example, high value segments should be weighted more heavily. Segments that are a good fit with your brand and are more likely to move from aware to consideration, will help eliminate some of the shortcomings noted above. Surveys with a broad general audience can easily mask your performance among the small portion of high value, high potential customers that will drive your financial performance.
  • Assess your awareness and other metrics among those buyers currently in the purchase funnel, especially if your products and services are only purchased periodically. Your ability to influence awareness, consideration, and purchase among those with a need or interest is a better measure of your effectiveness than your influence on the audience not likely to buy for a long period of time.

Tracking awareness and other perception metrics over time or as a pre/post campaign measure helps to diagnose barriers and “leakage” points in the funnel. Eliminating these barriers and improving funnel stages are opportunities for increasing the ROI and effectiveness of marketing.

Evaluating Brand Awareness Value

I often describe the value of brand awareness as the equivalent of half of a $100 bill. Unless you know where to find the other half, there really is no value. Brand awareness does not have a financial value on its own but is part of the collective effort necessary for marketing to drive incremental sales.

Measuring the ROI of marketing initiatives that drive brand awareness requires designing the measurement to understand customer behaviors in such a way that guides marketing strategies and tactical decisions.

Several measurement approaches that can be used to measure the ROI of marketing initiatives driving brand awareness follow:

  1. Assess the short-term lift in engagement and purchase actions associated with increases in brand awareness, allowing for a slight lag time using modeling or market testing.
  2. Track awareness and other perception metrics with ongoing or pre-post campaign surveys and closely monitor awareness changes relative to consideration and other metrics. When the progression from awareness to other metrics decreases, look closely at messaging, targeting, and marketing integration gaps. When awareness declines, look at media placement, messaging and creative to improve break-through.
  3. Track your brand attribute ratings relative to competitors using survey research for a better understanding of marketing effectiveness in building the brand. More advanced analytic techniques can be used to quantify the sales volume and ROI of changes in brand attribute ratings.
  4. Market test different levels of brand awareness marketing support as part of integrated marketing programs to determine the impact on conversion rates and to optimize the ideal level of awareness marketing within current mix.

Measurements must ultimately align awareness impact with the influence on conversion rates and customer value in order to show ROI. Marketers need to establish better definitions aligned to strategic objectives, improve tracking of perception metrics, and design measurements to assess marketing initiatives generating brand awareness in order to strategically build awareness and drive marketing effectiveness. There is an opportunity to build support for brand awareness initiatives as long as these initiatives are strategically designed to improve the perceptions and purchase actions that follow.