Short term ROI

Recently several of my clients have been very focused on short term ROI. I can understand, especially with our current industry stagnation.

I blame Mobile gaming! The rise of short-term metrics, particularly in mobile game marketing, has become a dominant focus and was the only way it worked up until Apple changed the IDFA access. Metrics like return on advertising spend (ROAS) and user acquisition (UA) ROI have taken precedence, overshadowing traditional brand-building efforts.

While short-term metrics provide immediate feedback and guide decision-making, they often neglect the long-term sustainability of games-as-a-service and free-to-play models. Brands risk overlooking the value of brand affinity, impressions, community and share of voice, crucial for establishing a lasting presence in the industry.

The reliance on purely attributable marketing spend, common in mobile gaming, has its limitations. While it offers precise measurement of ROI (sometimes), it fails to account for the broader impact of marketing activities.

This myopic focus on short-term ROI can lead to detrimental consequences in the long run. By neglecting brand-building efforts, companies miss out on opportunities to cultivate player loyalty and differentiate themselves in saturated markets. A prime example is the mobile gaming sector, where mimicking successful titles without establishing brand identity often results in short-lived success and vulnerability to competitors with established brands.

Short-term ROI-driven strategies undermine brand perception and price sensitivity. Brands that prioritize immediate returns over long-term value struggle to command premium pricin. Apple's success with the iPhone, despite premium pricing, exemplifies the power of brand equity in mitigating price sensitivity and sustaining profitability.

So, how can marketers strike a balance between short-term metrics and long-term success? It requires a shift towards evidence-driven marketing strategies that acknowledge the value of brand spending. Rather than dismissing brand-building efforts due to their non-attributable nature, marketers should leverage data to establish correlations between marketing activities and desired outcomes.

While attributing direct ROI to brand spend may seem challenging, adopting a breadcrumb approach can provide valuable insights. By identifying correlated metrics and isolating variables with significant effects, marketers can build a full funnel approach. Show your performance at each step your consumer goes through and optimize them.

While short-term metrics offer immediate gratification, they must be complemented by long-term brand-building efforts to ensure sustained success particularly for F2P and GaaS. Marketers must embrace data-driven strategies that strike a balance between short-term ROI and long-term brand equity, ultimately driving profitability and sustained healthy game communities.