Marketing Results, Results, Results!
From Brand to Enterprise Backoffice
It’s not unusual for today’s retailers to spend up to 25% of their sales revenue on marketing. That’s a good percentage of their hard earned revenues. But again, just like buying a new roof for your home or warehouse, it’s an investment.
Naturally, there is an expected return from a marketing investment. Advertising, public relations, promotions, and of course, digital, clearly must deliver. And typically they do, especially when it’s smart, creative and well executed.
The expectation is to build brand and brand loyalty, and to help generate immediate sales. The first is typically viewed as a long term investment and uses traditional media. The second is viewed as short term, and tends to lean on digital.
So how is all this measured?
If you consider a global company that spends a billion dollars on marketing each year, the ad agency, which might also serve as master contractor for all other marketing disciplines, is expected to deliver. But there are so many variables that can contribute to the performance of a global company that it is very difficult to pinpoint the causes of its success or failure. It’s sort of like suggesting that a national economy is going strong because of a certain President is in power, when an economy’s strength may be the result of fiscal decisions made by a previous president.
So how does a big company evaluate its marketing ROI? This age old question has been tackled by the industry since its golden ages starting back as early as the 1960s. The industry has, and continues to conjure up all sorts of methods and measures, from KPIs to AI. But accurate methods for measuring multi-touch marketing attribution is, by most standards, still inconclusive.
In some cases it may suffice for global agency to demonstrate that its annual campaigns were able to move its client’s prospective customers into what is referred to as…“their considerate set.” In other words, at the end of a given year, after all of their integrated, multi-point marketing and communications planning and execution, an agency will demonstrate using pre-accepted methods of research that they were able to move 3 out of 5 prospects into a consideration mindset. This could be defined as a “propensity to consider their client’s brand” which, theoretically, translates to a potential increase in the likeliness of near-term purchase.
OK… these are all big boys and they’ve been doing this for quite a while. But with the advent of online technology, increasing media fragmentation and evolving consumer behavior, big companies, correction, all companies, are rethinking the big megillah. In the end, the issue is not whether or not all this spending produces results. All you need to do is shut down all global advertising for a client for a full year, and you’ll be watching that company’s stock value plummet – no question about it. The issue is … how does one determine “the best and most accurate bang per marketing dollar.”
Again, the issue of marketing ROI and attribution has been with us for decades. It’s just becoming an even more visible issue, mainly because of our ability to track and process billions of data points per second.
We’re even beginning to see the doing away of today’s CMO, for lack of his or her ability to effectively quantify the return on what they spend. Already several global brands have replaced them with Chief Growth Officers, or Chief Revenue Officers. Of course these guys don’t know much about creativity, or human emotional response to messaging… but what the heck, right?
Let’s face it, every major advertising agency, whether global or local, as gone digital. And it’s not necessarily because they wanted to. It’s because clients demanded them to.
And why not? Now, with digital marketing, one can pretty precisely measure what moves and doesn’t move the dial. It’s already old hat, including all of those innovative terms that go with it like sales funnels, impressions, conversions and analytics.
The ROI expectation works at virtually every level of business, and companies needn’t be global to play the game.
It all makes me think of a recent incident. We at Campaign Precision have a great client with multiple retail locations around the state of Florida. Our client invests in public relations with a terrific pr firm, and they also invest in digital, with us. And while we love to read their pr firm’s press releases and media stories, and we’re pretty convinced they get a lot of relevant folks to read and talk about our mutual client, trying to accurately quantify their ROI is simply too difficult. So we all collectively accept their compelling articles as a necessary craft that delivers long term brand presence that cannot really be measured but… hey… gotta’ love it…it’s in Ocean Drive magazine!
But when it comes to digital, our same client is all hands on deck. For every digital dollar, its….‘Guys, this digital program’s gotta’ deliver sales… I mean it absolutely has gotta’.” Interestingly, despite digital’s ability to also run long term brand campaigns, most clients look for immediate, short term sales lift. “We absolutely, categorically have to see this thing deliver!”
Of course, we tend to agree with our client. As our client needs the confidence in knowing that his digital delivers ROI – so do we.