By Robert Konkos
Back in the early 1900’s, marketing pioneer John Wanamaker is said to have coined the famous phrase: “Half the money I spend on advertising is wasted; the trouble is I don't know which half.” Over 100 years later, things haven’t really changed all that much – advertisers are still wasting money and don’t know how to fix it. How could this still be happening today? Isn’t mostly all media traceable and measurable? Much of it is, but there are also several other dynamics at work, not least of which is the changes in consumers themselves.
Companies continue to spend hundreds of billions of dollars on poorly-targeted and poorly-measured ads. This is annoying consumers (to the point that many are now ignoring messages that aren’t personalized) and wasting precious marketing dollars. Some of the biggest and best advertising platforms have recently provided inaccurate measurement results to advertisers. You may have seen Facebook’s announcement last month on inflated video metrics.
The reality is that how people consume media and buy products is changing dramatically. Even though digital, social and mobile penetration continues to rise, new ad platforms and so much new and unconnected data have resulted in confusion when it comes to truly understanding campaign performance. At the same time, consumers are making their purchase decisions very differently than before. They compare products and price reviews, ask friends and families to weigh in via social media and, once they’ve made up their minds, they want products immediately. There’s a swirl of data everywhere, and it can be hard to make sense of it all.
So what’s a marketer to do?
I think we can all agree that the whole point of marketing and advertising is to grow a company and its products’ sales. Given that, these budgets should really be treated as a sales function with similar ROI goals. Of course, there is also value in branding and that should not be held to a short-term ROI goal. On the flipside, it’s also hard not to argue that all advertising dollars are for one purpose and one purpose only: sales today or sales tomorrow.
Measuring your campaigns using sales data is the best way to help drive your primary advertising goal: lift in sales. Brand value is a natural and secondary long-term benefit, which can still be tracked through ongoing sales when advertising is dark and also through panel surveys. And, with unique creative, you can achieve both goals continuously, speeding the cycle to sales as well as repeat customers.
With the explosion of third-party data becoming available to help track and measure media exposure, the possibilities of new insights are endless. Research is too often considered a separate budget when research and measurement are the interlocking levers (when done properly) that help advertisers achieve their goals. Granular sales optimization (creative, publishers, placement and audience) with the combination of research, analytics and media are the essential building blocks for sales lift in every media campaign.
David Ogilvy said, “Advertisers who ignore research are as dangerous as generals who ignore the signs of the enemy.” While it’s never perfect – we are all using BAD (Best Available Data) – there are some very good data assets and methodologies available. They can get you the more granular insights you need, including identifying the sales performance drivers you should focus on to optimize your tactics and drive an even higher ROI.
Instead of being another John Wanamaker, the right measurement and optimization tools can help you break away from the pack of the unknowing and confidently say, “Half the money I spend on advertising is wasted and I know exactly which half.”