Yesterday at Google Marketing Live in Auckland, one message stood out.
Les Binet, one of the world’s leading voices on marketing effectiveness, challenged one of the most common assumptions in modern marketing: that the best-performing business is the one with the highest campaign ROI.
It sounds sensible. Spend less. Track everything. Optimise every dollar. Chase the lowest cost per lead. Keep the board or management team happy with a neat return-on-ad-spend number.
The problem is that this thinking can quietly limit growth.
For many New Zealand businesses, especially in a tighter economy, the natural instinct is to protect margin by cutting marketing investment or focusing almost entirely on short-term ROI. But if every business in a category does that, the brands that continue to invest intelligently can gain a disproportionate advantage.
The question should not only be: “What ROI did this campaign produce?”
The better question is: “Are we investing enough to grow?”
The ROI trap
ROI is useful. It tells us whether marketing activity is efficient.
But efficiency and effectiveness are not the same thing.
A campaign can have a strong ROI and still be too small to materially move the business forward. For example, a campaign that spends $2,000 and returns $10,000 has a 5:1 return. That looks excellent. But if the business needs another $500,000 in annual revenue, that campaign is not a growth strategy. It is a small, efficient activity.
This is where many businesses get stuck. They optimise campaigns down to the safest, most efficient segments: existing demand, brand searches, remarketing audiences, repeat customers, and bottom-of-funnel enquiries.
Those campaigns often look great in reporting. But they do not necessarily create new demand.
In fact, over-focusing on ROI can lead to under-investment. Budgets get reduced to only what is easy to measure. Brand visibility falls. Competitors become more familiar. The pipeline shrinks. Sales slow. Then marketing budgets are cut again because results are down.
That is not efficiency. That is a growth problem.
Why Share of Voice matters
One of the most useful concepts for business owners is Share of Voice.
In simple terms, Share of Voice is your share of advertising visibility in your category. If all the businesses in your market collectively spend $1 million on advertising and you spend $100,000, your Share of Voice is approximately 10%.
The important comparison is between your Share of Voice and your Share of Market.
This is where ESOV, or Excess Share of Voice, comes in.
ESOV = Share of Voice minus Share of Market
If your business has 10% market share but 15% Share of Voice, you have positive ESOV. You are more visible than your current market position. Over time, that tends to support growth.
If your business has 10% market share but only 5% Share of Voice, you have negative ESOV. You are less visible than your current size. Over time, that usually makes growth harder and can put market share at risk.
The principle is straightforward: brands that are more visible than their current market share tend to grow. Brands that are less visible than their current market share tend to become easier to ignore.
The Ads-to-Sales Ratio: a practical metric for NZ businesses
For many New Zealand SMEs, ESOV can feel hard to calculate perfectly because competitor spend is not always visible.
That is where the Ads-to-Sales Ratio is useful.
Ads-to-Sales Ratio = Advertising spend as a percentage of sales revenue
For example:
If your business turns over $2 million and spends $100,000 per year on advertising, your Ads-to-Sales Ratio is 5%.
This gives you a practical benchmark for growth planning. Instead of asking, “Can we get more leads without increasing spend?”, the more commercial question becomes:
“Is our advertising investment proportionate to the revenue growth we want?”
A business trying to maintain its current position may be able to operate with a lower Ads-to-Sales Ratio. A business trying to grow market share usually needs to invest at a higher ratio, at least for a period of time.
This is especially important in the current economy. Many businesses are cautious. Some have cut spend. Some are only investing in activity that produces immediate leads. That creates an opportunity for businesses with the confidence and discipline to invest in visibility while competitors are quiet.
Growth requires demand creation, not just demand capture
Digital marketing has become very good at capturing demand.
Google Search captures people already looking. Remarketing captures people who already know you. Shopping campaigns capture people close to purchase. Lead forms capture active intent.
These channels are important. But they mostly harvest existing demand.
Growth also requires demand creation.
That means reaching people before they are ready to buy. It means making your brand familiar, credible and easy to recall. It means building mental availability so that when a customer enters the market, your business is already on the shortlist.
For a local service business, that might mean being the first company someone thinks of when they need a plumber, electrician, physio, dentist, accountant, lawyer, builder, vet or security provider.
For an ecommerce business, it might mean being the brand people recognise before they compare prices.
For a B2B company, it might mean being visible long before the next procurement cycle.
If you only advertise to people who are ready to buy today, you are competing in the most expensive part of the market. Everyone wants those customers. The opportunity is to build preference earlier.
What NZ businesses should do now
1. Set the budget from the growth target, not last year’s spend
Too many marketing budgets are based on what was spent last year, what feels affordable, or what can be justified by short-term ROI.
A better approach is to start with the revenue goal.
If you want to grow revenue by 20%, what level of marketing investment is realistically required to support that? Is your current Ads-to-Sales Ratio high enough for that ambition? Are you investing like a business that wants to grow, or like a business trying not to lose ground?
This does not mean spending recklessly. It means connecting budget decisions to commercial outcomes.
2. Protect brand investment, even when times are tight
When the economy gets harder, brand activity is often the first thing cut because its impact is less immediate than lead generation.
That can be a mistake.
Performance campaigns convert existing demand, but brand activity increases the size of the future opportunity. Cutting brand visibility may protect this month’s ROI report, but it can weaken next quarter’s pipeline and next year’s market position.
A balanced marketing plan should include both:
- Short-term activity that captures active demand
- Long-term activity that builds awareness, trust and preference
For many businesses, the right balance will depend on category, sales cycle, margin, seasonality and growth ambition. But the principle remains: if all spend is pushed to the bottom of the funnel, future growth becomes harder.
3. Look for competitor quietness
A tougher economy does not affect every business equally. Some competitors will cut spend. Some will pause campaigns. Some will reduce their visibility to protect short-term margins.
That can create a rare opening.
If your competitors are quieter, you may not need to outspend the entire market historically. You may only need to maintain or modestly increase spend while others pull back. That can improve your relative Share of Voice and help you gain ground.
This is particularly relevant in New Zealand, where many categories are small enough that a disciplined increase in visibility can make a noticeable difference.
4. Stop judging every channel by the same metric
Not every marketing channel has the same job.
Google Search should be judged heavily on intent, conversion rate, cost per lead, revenue and efficiency.
YouTube, display, Meta, programmatic, outdoor, radio or broader awareness activity should also be judged on reach, frequency, brand lift, direct traffic, search demand, assisted conversions and longer-term sales impact.
If every channel is judged only by last-click ROI, the budget will naturally move toward the narrowest bottom-of-funnel activity. That may make reporting look cleaner, but it can starve the business of future demand.
The measurement model needs to match the role of the channel.
5. Build fewer, stronger campaigns
One of the traps in digital marketing is the ability to constantly change things.
New offers. New landing pages. New ad copy. New audiences. New tests. New creative. New campaigns.
Testing matters, but constant fragmentation can dilute impact.
Many businesses would be better served by fewer, stronger campaigns with clearer positioning, better creative, stronger media support and longer runways.
Consistency builds memory. Memory builds preference. Preference improves conversion.
6. Use Ads-to-Sales Ratio as a boardroom metric
Marketing teams often report on clicks, impressions, CPCs, leads and conversion rates. Those metrics matter, but they are not always the best language for commercial decision-making.
The Ads-to-Sales Ratio is easier for owners, boards and finance teams to understand.
It asks:
- What percentage of revenue are we investing into advertising?
- Is that enough for our growth target?
- How does it compare with our category?
- Are we investing to maintain, recover or grow?
- Are we under-spending relative to our ambition?
This shifts the conversation from “marketing wants more budget” to “what level of investment is required to achieve the business plan?”
The opportunity for NZ businesses
The current economy rewards discipline, but it also rewards courage.
Businesses that cut too deep may protect short-term efficiency but lose visibility, momentum and market share. Businesses that invest without strategy may waste money. But businesses that invest intelligently, with the right balance of brand and performance, can make meaningful headway.
The goal is not to spend more for the sake of it.
The goal is to spend at the level required to grow.
For New Zealand businesses, the opportunity is to stop treating marketing as a cost to be minimised and start treating it as an investment to be properly sized, measured and managed.
ROI still matters. But it is not the whole story.
If the ambition is growth, the real question is whether your brand is visible enough, for long enough, to win more than its current share of the market.
