A growing argument says marketing measurement has to move beyond ROI to account for risk. Executives want business signals, not vanity metrics. The campaign with the best return is not always the most defensible.
The campaign with the best return is not always the most defensible. Risk is the half of the story ROI leaves out.
There is a growing argument that marketing measurement has been telling half the story. ROI shows you the return on a campaign. It says nothing about the risk you took to get it. The case being made now is that marketing needs to measure both, because the campaign with the best headline return is not always the one you should scale.
The logic is simple once you see it. ROAS tells you revenue per dollar spent. It does not tell you whether that revenue is profitable, repeatable or scalable. A campaign can look brilliant on paper and lose money once you account for margin, lifetime value and the cost of scaling it. Fund on return alone and you can end up pouring budget into something fragile.
The other shift is what the C-suite actually wants. Executives are not asking for marketing metrics. They are asking for business signals. Is marketing materially affecting revenue, growth and risk in a way they can trust. Strong marketing reduces risk through diversified pipeline, better forecast accuracy and less reliance on discounting. That is the language a board understands.
Why it matters
For Australian marketers this is the conversation that earns you a seat at the table. If you can only talk about return, you are speaking a language the CFO finds incomplete. If you can talk about return and risk together, you are speaking theirs. The marketer who can say this channel returns well but concentrates our risk, and this one returns less but stabilises our pipeline, is far more useful than one waving a ROAS number.
It also guards against a common trap. Everything is risk, so the goal is not to avoid it. The goal is to understand it, price it and take the bets worth taking with your eyes open.
The number of questions a board really asks of marketing. What did it return, and what did it risk.
What to do about it
Report risk alongside return. For every channel, note not just what it earns but how concentrated, repeatable and scalable that return is.
Stress test your best performers. A campaign that only works at small scale or in one channel is a fragile win. Know that before you pour budget in.
Translate into business signals. Frame marketing's contribution in terms of revenue, growth and risk, the three things the board actually weighs.
Diversify deliberately. A spread of working channels is lower risk than one brilliant channel you cannot live without.
Return tells you whether a bet paid off. Risk tells you whether you should make it again. The marketers who measure both make better decisions and win more of the budget arguments that matter.