Growth
How Executive Teams Should Evaluate Marketing Investment
Marketing evaluation frequently mixes leading and lagging indicators, producing bad decisions in both directions. This briefing offers a cleaner rubric.
Reviewed by Director, Growth7 min readFunnel: Consideration
Thesis
Marketing should be evaluated the same way capex is: by the durability of the asset it builds and the compounding rate it produces, not by monthly ROAS alone.
01
Separate compounding from transactional spend
Brand and content are compounding assets; paid acquisition is transactional. Judging them by the same metric distorts both.
02
Set the right time horizon
Compounding investments need multi-year evaluation. Cutting them on a quarterly view usually destroys value.
03
Instrument what you can, respect what you cannot
Attribution is imperfect. Complement it with pre/post tests, market matched controls, and executive judgment.
Practical framework
The Marketing Capex Rubric
- Classify every line as compounding or transactional
- Set horizons appropriate to the class
- Instrument at the appropriate granularity
- Reallocate quarterly on transactional, annually on compounding
- Report to the board with both lenses
Key takeaways
- One rubric does not fit both compounding and transactional spend.
- Attribution is a tool, not a verdict.
- Multi-year horizons protect compounding assets.
Risks to avoid
- Cutting compounding spend to hit quarterly targets.
- Doubling transactional spend based on last-touch attribution alone.
Questions we hear
- Is CAC:LTV still useful?
- As a directional metric, yes. As the only lens, no — it collapses without the classification above.
Related
Next step