Is ROI the most effective metric?

Return on investment (ROI) has long been marketing’s go-to measurement. It’s clear, financial, and easy to present. It speaks the language of the boardroom and offers a simple way to justify spending. But for marketers looking to show the full value of their work, especially in brand-building, ROI doesn’t tell the whole story.

In reality, ROI is just one piece of a much bigger puzzle. Of course it can be useful, but it also overlooks marketing's value in the long run. For example, campaigns that want to build brand trust or improve customer loyalty might not show an immediate return, but that doesn’t mean they aren’t working. 

So, why has there been such a big focus on ROI, and what are marketers missing out on? More importantly, how can marketers adopt a measurement model that balances short-term performance with long-term brand building?

The comfort of simplicity (and its limits)

It's easy to see why ROI is so appealing. It turns something that can seem complex into one tidy figure and it’s also easily digestible across teams.

As Lorna Hawtin, chief strategy officer at ZEAL, puts it: "ROI became dominant not because it's the best, but because it's the easiest. It flatters finance, fits neatly in spreadsheets, and offers comforting certainty in a world where real impact is anything but linear."

But the simplicity of ROI can be misleading. As Traci Alford, president and CEO of Effie Worldwide, points out: "ROI is an important metric, but it's just one piece of the effectiveness puzzle. Its relevance depends entirely on the business objective in question."

"ROI is the comfort blanket of the C-suite," says Rikke Wichmann-Bruun, managing director, client services at Cheil UK. "Neat, numerical, and simple — money in, money out. But marketing isn't a vending machine. ROI rewards the easy wins: short-term clicks, last-touch conversions, bottom-funnel noise. It ignores the brand-building that actually drives long-term growth.” 

Still, ROI has its place. "It brings financial clarity, helps optimise budgets, and can be a powerful tool in performance marketing or when used within longer-term frameworks like Customer Lifetime Value or econometrics. The problem isn’t ROI itself — it’s using it as the only measure of success," she explains. 

What ROI misses

The problem with ROI is not that it's wrong, but it often feels too narrow. It doesn't measure whether a campaign made people trust your brand more. It also can't predict future buying behaviour. 

Alford warns: "Focusing solely on ROI risks undervaluing marketing's strategic contributions, particularly in brand-building, where the payoff is often long-term and less immediately quantifiable."

Josh Doherty, digital marketing specialist at Alex Direct, agrees: "Customer lifetime value is often overlooked but gives a much clearer picture of the quality of customers being acquired. A campaign that brings in fewer but more loyal and higher-value customers might show a lower immediate ROI, but the long-term impact is far greater."

He wants marketers to look beyond surface-level metrics: "Instead of just counting clicks or views, look at how often people return, how long they stay and whether they interact meaningfully with your content. These are early signs that your marketing is building real relationships rather than just driving one-off transactions."

Wichmann-Bruun adds: "Metrics like Customer Lifetime Value help identify which customers are worth retaining. Brand equity underpins pricing power, loyalty, and resilience."

All of these shape a brand in the long run, but none of them are captured in the traditional ROI snapshot.

Building a better measurement framework

So, how can marketers measure what matters? Emma Grant, co-director of Figment, says it starts with a clear sense of purpose.

“Start by defining clear business goals that marketing supports, such as increasing customer loyalty, improving brand awareness or driving higher lifetime value. From there, select metrics that align with these objectives,” she says.

The best frameworks reflect what’s working now and what will pay off later.

“It is helpful to use a mix of short-term and long-term metrics. While ROI and conversion rates are essential for optimising campaigns, they need to be balanced with indicators that capture strategic progress,” adds Grant.

For Alford, effectiveness needs to reflect changing objectives and contexts: “The heart of effectiveness lies in 'change'. The industry innovates, your business challenges evolve, your category shifts… The measures of effectiveness must align with the unique business context, objectives, and audience.” 

Hawtin agrees: “The smartest brands are fusing sales activation and equity metrics, building measurement ecosystems that reflect the full funnel and the full story across every touchpoint. It’s not easy, but it is necessary.”

Having this kind of layered framework can help marketers connect the dots between everyday performance and long-term strategy. Ultimately, it provides a much clearer picture of marketing's actual value.

Making the case for brand marketing

Proving value can be tough for marketers. ROI tends to lean towards bottom-funnel activity, which means brand building can be overlooked. But just because the results aren't immediate doesn't mean they can't be measured. It just needs a different approach. 

Hawtin says marketers must take the lead: "Marketers can't afford to keep acting like the sales team's quirky cousin. We are architects of growth. But only if we stop chasing ROI like it's the only trophy worth lifting."

For Alford, the path forward is about building confidence: "The next step is helping marketers feel confident in championing the metrics that truly reflect their strategy, rather than relying on a single, easily quantifiable metric that often fails to capture the full story."

Wichmann-Bruun adds that the real opportunity lies in combining rational metrics with emotional insight: "To prove marketing's real value, we need to think bigger… combining performance metrics that show efficiency with brand and customer experience metrics that capture emotional and behavioural depth, alongside business metrics that demonstrate true commercial impact."

When we connect brand-building work with long-term business goals like higher retention or faster conversions, marketers can move the conversation from spend to value.

Shifting the conversation

ROI isn't going away, and nor should it. It’s still a useful benchmark of efficiency. But it’s not the whole picture.

As Alford says: "Effectiveness is now central to the industry conversation. The next step is helping marketers feel confident in championing the metrics that truly reflect their strategy."

The shift starts with marketers. It’s up to them to rethink how they report success, treating ROI as one part of the story, not the whole thing. By taking a more rounded approach, they can show how marketing delivers results in the short term while building momentum for the future.

Want to learn more about ROI and how to prove your marketing matters? CIM members can join our next exclusive webinar on 27th August to learn how to take control of your measurement approach and confidently connect your marketing activities to business outcomes.