Brands investing in purpose are missing out on growth opportunities, or worse, risking accusations of greenwashing, by failing to properly measure and communicate the impact of their purposeful activities. Kate McGarrahan, Strategy Director, Revolt highlights that while expertise and resource is commonplace for measuring brand impact, the same is rarely the case for purpose.
Research conducted by consultancy Revolt – ‘Accounting For Impact’ – has revealed that only 14% of the ‘most effective’ campaigns as measured by the marketing and advertising industry are fully accounting for impact through established financial metrics. So while brands may well be doing good in the world – eg, helping recover plastic waste from beaches – they simply don’t know the impact they’re making and so are unable to demonstrate the effectiveness of their purpose marketing.
Revolt evaluated the purpose campaigns identified by WARC as the most effective in 2023. We found that the majority of brands are only measuring against ‘charitable investment’. But donations to charity are often only the first step of purposeful brand impact. Of the 36 designated purposeful campaigns we analysed, only five demonstrated a measurement approach which could be linked back to impact outcomes with financial metrics and show a potential return on investment in purpose. Note, while half of the 100 case studies in the WARC ranking had a purpose element this analysis focuses on only one case study per brand, some brands had multiple case studies in the ranking. We also denoted a brand as ‘purposeful’ if they created an action that delivers positive impact to a community/group or an environmental indicator that went beyond a comms-only approach.
And since the launch of Dove’s Campaign for Real Beauty in 2004, we’ve seen purposeful brand actions grow from a handful of Cannes winners to over 60% of all Grand Prix. In the same period, Dove added over £2.5bn in brand value. But do we know how many women and girls they helped to feel more beautiful?
With such a low level of purpose impact measurement across the industry, too many brands are missing out on the ability to build credibility, authenticity and consumer loyalty – through marketing and communication – which is proven to drive business growth.
But arguably more concerning is the potential risk to reputation, as brands claiming to be purposeful are unable to demonstrate the impact they’ve created and so are vulnerable to being called out for green-washing or purpose-washing. With upcoming greenwashing regulations in the EU, this is a potentially worrying situation for many brands.
To help brands understand and demonstrate the impact of purposeful action, Revolt has devised a critical approach to help brands measure purpose properly – directly linking purpose to brand performance and directly linking brand activities to social or environmental impact. The approach brings tried and tested measurement practices from fields where impact measurement is commonplace, such as the NGO and impact investing spheres. It also builds on marketing’s existing methods of measuring effectiveness.
The first phase of the approach is where brands adopt an impact model, commonly called a ‘theory of change’ by NGOs and charities. An impact model must include evidence of causality, directly linking a brand’s actions to the social and environmental outcomes it seeks to create. The impact model summarises how a brand creates change across its investment, activities (e.g. partnership with an NGO), outputs (e.g. people enrolled in a programme) and outcomes (e.g. percentage change on an environmental or social indicator). To protect against greenwashing accusations, brands can use third-party research, A|B tests and controlled experiments, and longitudinal studies (often with academic partners) to scientifically track the effectiveness of their interventions. Brands may want to consider referencing global indicators, such as The UN’s SDG Global Indicators, to further standardise their impact and enable it to be aggregated with wider impacts across their operating footprint.
The second phase is focused on analysis of purpose campaign data. Data collection and analysis is at the heart of accounting for impact. By analysing impact data according to accepted principles, brands can better understand and estimate their impact effectiveness. One standard, quite commonly accepted in the UK thanks to the 2013 Social Value Act, is to apply social valuing principles to brand impact data in order to transform it into a financial valuation. Financial valuations of social and environmental indicators already exist and proxy values are available through partnership with organisations that specialise in social value. Once the valuation model is set, the brand can then calculate its return on impact investment – a metric that enables purpose effectiveness to be held on equal ground to marketing effectiveness for the first time. Crucially, the collation, analysis and calculation of return on impact investment can be held in a secure online impact data portal, enabling brand teams around the world to work together to create impact through better collation and collaboration.
Finally, brands must communicate their impact results, both internally and externally to build credibility and make the case for further investment. Brands that communicate their impact in a compelling and differentiated way, stand to reap significant rewards. For example, 63% of consumers prefer to purchase from purpose-driven brands (Accenture) and 75% of millennials would take a pay cut to work at a responsible company (Fast Company). Brands that have already adopted an impact reporting cycle will also be on the front foot with greenwashing regulations. With a strong narrative and beautiful documentation of the brand’s actions impacting people and planet, impact storytelling has the potential to become a key pillar of purposeful brand content.
Accounting for impact takes marketing’s existing measurement effectiveness muscle and applies it to social and environmental metrics, helping to unlock further purpose investment and fueling growth-driven marketing. As with any progressive movement, we expect some backlash to this approach. Brands, as we have recently seen, may back away from purposeful actions in pursuit of shorter-term value creation. But because this approach demonstrates real returns on investment to both people and planet, it can help render brand purpose resistant to cultural and economic shifts. For this reason, we anticipate that demand will grow for real solutions to measure purposeful brand impact, alongside demand for system-wide change that enables our financial system to finally account for its impacts on people and planet.
