Gain Theory has released a report titled 'Measure, Thrive, Optimize: How to Demonstrate Advertising's Value and Boost Growth'. The report provides insights into the return on investment (ROI) delivered by advertising, revealing a 2.9x return on investment for companies that allocate resources to advertising.

According to the report, companies that invest 3% of their revenue in advertising can generate an 8.7% contribution to total sales. This analysis was conducted across 75 company-market combinations, providing evidence and guidance for marketers to demonstrate advertising effectiveness and secure budget confidence.

The research draws on Gain Theory's global client database, encompassing various sectors. It identifies two primary pathways to advertising growth: spending more wisely and spending more. The report notes that optimisation improvements, at 0.4%, slightly outpace increased investment, which contributes 0.3% to growth.

Key findings from the report include strong ROI evidence, sector-specific insights, and the potential for growth through measurement. The report highlights that consumer packaged goods (CPG) companies face unique challenges, with lower contribution rates compared to non-CPG companies.

Companies that measure and optimise their advertising contribution reportedly see a 0.7 percentage point increase year-over-year. For a company with $10 billion in revenue, this equates to an additional $70 million in revenue.

The report recommends two primary measurement techniques: Marketing Mix Modelling (MMM) for larger companies and A/B testing for smaller companies. It concludes with three essential actions for marketers: implementing robust measurement programs, analysing and optimising spend allocation, and building compelling business cases.

Matthew Chappell, Global Client Success Officer at Gain Theory, stated, "The data speaks for itself - advertising is not a cost centre, it's a growth engine. Companies that invest 3% of their revenue in advertising see an 8.7% contribution to total sales, delivering nearly three times the return. What's even more compelling is that companies actively measuring and optimising their advertising contribution are seeing year-on-year growth. This is more important than ever in a market of volatility where marketing teams are under immense pressure to deliver with budgets under scrutiny."