What is the point of marketing in general and advertising in particular? This is not a rhetorical question. While the jaded among you might say it’s to employ the lower third of graduating MBA classes, the answer is neither so cynical nor complex. The point of all the PowerPoint decks, research, ill-advised focus groups, handwringing about engagement, and knee-jerk directives to make the logo bigger is to sell stuff. Usually a physical thing or service, and at other times a cause or idea. But we don’t spend all this energy and money to just give folks a warm fuzzy during “Judge Joe Brown.” We do it to get them to act.
Which leads to the second-most often asked question between client and agency: How’s this [the work] going to help my bottom line? Or, if you were in the upper third of your MBA class, what’s the ROI? (And in case you haven’t guessed, the most-asked question is “how much is this going to cost me?”)
Attaching a return on investment number to advertising does several things, some good and some less so. It sets a measurable goal against which to judge success. It helps the non-marketing types in the C-suite understand why marketing should be done at all. It calms nerves by assigning a tangible data point to what is commonly seen as a black art and budgetary black hole. But it also assigns a data point to something that may not be geared to achieving that outcome (Do you want sales or awareness? Activation of affinity? All of the above? With that budget? Seriously?). It places easily understood short-term goals above amorphous long-term brand building. It assumes each project is a separate entity unto itself that is neither influenced by nor an influencer of other efforts. And, more than likely, the number was a guesstimate based upon a previous, similar project created when market conditions were probably more favorable. No big whoop.
This is not meant to give ROI the stink-eye. It is meant to give simplistic demands for on-the-nose ROI the stink-eye with a noogie on the side. Possibly a swirly. The day is young.
Now, like 42% of all advertising-related columns written in the modern era, I am going to quote successful turn-of-the-(not this)-century merchant John Wanamaker, who opined, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Insert your own knowing chuckle here. But with all the respect due a former U.S. Postmaster General, baloney. Because everything is measurable and everything can be tested and everything can be judged against a goal if we have the wisdom, patience and, apologies to the CFO, money to do so.
Certain advertising vehicles are fairly easy to measure. Coupons. Direct-response television. E-mail blasts. Online display ads. The more redemptions, calls, site visits or clicks you get, the better you’ve done. (To be clear, I’m not judging the worthiness of these mediums for any particular purpose beyond easy measurement.) Because of their near-instant measurability, a lot of businesses – and not just local mom-and-pops, either – gravitate toward them, attempting to drive sales overnight while sacrificing building their brands over time.
(Granted, they’ll still build a brand over time. Only it will be a brand known for constant discounting, spam and appeals to act now because supplies are limited even though everyone knows they aren’t.)
When it comes to what most people consider brand advertising – the type that builds awareness, attempts to put a brand into consumers’ evoked sets of options, builds a personality, establishes the brand promise, etc. – measurement is still possible. It just often takes more time and money than most marketers want to spend. The most common example is a pre/post analysis. What did consumers think before a campaign ran and what did they think after? Did site and/or store visits go up? And, yes, you can even use sales as a measure in many instances; e.g., restaurants often see an uptick when they’re advertising even if they aren’t pushing a limited-time offer.
Of course, all this ROI measurement assumes two things: that you’re willing to invest in both the marketing itself and the measurement of its effectiveness. And while only you can decide how much to spend on your marketing, you can’t complain about your lack of ROI if you’re unwilling to actually I. So save up your ducats, find an agency partner who has a clue, strategize, then act. Done well (which is different than perfectly), you’ll eventually have people in other departments laying claim to the returns you and yours enabled.
This column originally appeared in the winter 2014 – 2015 edition of Omaha B2B Magazine.