A “maniacal fixation on ROI,” per Cumulus Media’s Pierre Bouvard, may be destroying brands, according to a new analysis from Westwood One’s Audio Active Group, which argues that budget, not ROI, is what actually drives profit growth for advertisers.
Since the pandemic, the median return on media spend has ticked up 4%, from $4.15 to $4.26 per dollar invested, according to IPA Databank figures comparing 2022-24 to 2018-20. Over the same period, the incremental profit that spend generated fell 11%, from $44.6 million to $39.2 million in 2024 prices.
Bouvard’s core argument rests on a simple formula. Profit equals ROI multiplied by spend, meaning budget size and campaign efficiency both drive results. But separate research he cites, a 2025 Medialab CMO survey compared against IPA Databank data, found that marketers believe ROI accounts for 65% of profit growth and budget just 35%. The data tells a different story. Budget explains 89% of profit variation, and ROI only 11%.
That disconnect showed up when researchers asked 500 chief marketing officers whether budget or ROI mattered more for driving profit, and the executives overwhelmingly picked ROI. “Budget is nine times more important than ROI,” marketing effectiveness researcher Les Binet said, a finding he argues makes budget-setting marketing’s single most consequential decision.
Category-level data shows the same pattern, according to the same IPA Databank analysis. Comparing the top 20% of advertisers against the bottom 20% within each category, budget differences between the two groups run far larger than ROI differences. That’s a 212-times budget gap in fast-moving consumer goods versus a 7-times ROI gap, a 357-times budget gap in durables versus 8-times for ROI, and a 350-times budget gap in services versus 11-times for ROI. Advertising budget explains between 86% and 91% of incremental profit generated within each of those categories, with ROI accounting for the rest.
Diminishing returns show up starkly in a curve the presentation labels as maximum ROI equals minimum profit. As advertisers push efficiency higher, the incremental profit their campaigns generate falls, and as spend rises enough to maximize total profit, ROI erodes. A separate chart shows profit continuing to climb as marketing expenditure increases, though at a diminishing rate, meaning bigger budgets keep paying off even as each additional dollar returns somewhat less than the one before it.
Bouvard also describes a point past which performance-only spending stops working entirely, because a brand that devotes its whole budget to converting existing demand eventually runs out of demand to convert.
A separate 2025 WARC and Analytic Partners study cited in the presentation found that a balanced mix of brand and performance advertising, roughly 50-50, outperforms an all-performance approach by a growing margin over time. That’s 27% more incremental revenue after one month, 40% more over six months, and 50% more over six to twelve-plus months.
Marketing effectiveness researchers Les Binet and Peter Field found a related pattern, also cited in the presentation. Brands whose share of advertising voice exceeds their share of market tend to grow, while those spending below their market share tend to shrink.
As a reach-driven, brand-building medium, radio sits on the budget and share-of-voice side of the ledger. The brand-versus-performance findings also double as a case for pairing radio with digital and search rather than shifting ad dollars entirely into performance channels. Bouvard’s advice is to build budgets deliberately, using ad-spend ratios, task-based budgeting or share-of-voice analysis, rather than chasing a better ROI number. Optimizing for ROI alone, he warns, is a way to shrink both a company’s profits and, eventually, its brand.
