6-18-2012
By Wayne Ens
Ever since department store magnate John Wanamaker quipped, "I know half of my advertising is wasted, I just don't know which half," advertisers have been trying to measure the R.O.I. (return on investment) from their advertising. Many new-media advocates have brought accountability, measurability, and R.O.I. to the forefront with the suggestion that advertising can be measured by clicks, likes, online buzz, or page views.
In a recent survey*, more than 10,000 business owners and managers across North America were asked what question about marketing or advertising keeps them awake at night. Overwhelmingly, their most burning question was, "How do I measure the R.O.I. of my advertising?" or "Which media can give me the best R.O.I.?"
But local business owners are discovering they can't send their kids to college with clicks, and they can't meet their payroll obligations with likes or page views. They're discovering R.O.I. can only be measured in their bank accounts.
Many are also discovering that the same 400 page viewers they measured today also viewed their competitors' sites.
Our "Making Radio Tangible" sales workshop unveils five proven tools account executives can use to validate radio's R.O.I. in the new media landscape, but the honest short answer to advertisers' R.O.I. is. "You can't measure advertising's R.O.I. in isolation."
Why? Because advertising is only one small, though integral, part of the marketing mix. And advertising certainly can't make a bad business a good business. All five P's in your clients' marketing mix must be aligned to maximize their return on investment:
-- The right product (a product the market place desires)
-- In the right place (location, location, location)
-- At the right price (not necessarily the lowest price)
-- With the right promotion (advertising is part of promotion)
-- With the right people (it's your people that deliver your customer experience)
There are so many variables in the marketing mix, from competitive factors to weather, from timing to technologies, that no advertising R.O.I. can be measured in isolation.
You've heard the expression, "Salespeople who live by the ratings, die by the ratings." Well the same is true about salespeople who live by R.O.I. claiming they can measure the R.O.I. of their campaign without consideration for the total marketing mix. If you claim sole credit for a "successful" campaign, without acknowledging the role of the total marketing mix, you are sure to bear the brunt of the blame for a failed campaign as well.
Many media account executives, for example, jumped on the R.O.I. of the Pepsi Refresh campaign as proof that social media doesn't work and traditional media does. Pepsi's market share slipped from number two to number three when they pulled their budget out of Super Bowl advertising in favour of a social media campaign that created an unprecedented online "buzz."
It is ludicrous to suggest Pepsi's market share slide was solely the result of that media move. Their total marketing mix, not to mention their competitors' marketing maneuvers, all played a role in the end result.
Professional radio marketers pre-plan every call with questions that help the advertiser clearly understand radio's role, or advertising's role, in the marketing mix.
When you get asked about measurement or R.O.I., you can ask questions to help your advertisers discover for themselves they cannot measure advertising without considering the interdependency of all five marketing P's. Simply ask questions like:
-- If half of your staff was down with the flu during a campaign, would that affect the results of your campaign?
-- If we were hit by a blizzard during the campaign, would that impact R.O.I.?
-- If a competitor ran a huge going-out-of-business sale with merchandise priced 50 percent below cost, would that impact our results?
The purpose of advertising is to move prospects through the marketing funnel from unawareness to awareness, and ultimately to preference and purchase. Building preference is what assures your advertisers of a competitive edge at the time of consumer need.
It is that preference that is the ultimate "tie-breaker" when product, place, price, and people are perceived to be similar, and it is that preference which governs everything from S.E.O. (search engine optimization) to selling at a profit, and from creating valuable word-of-mouth advertising to customer loyalty.
As an example, research has proven that consumers do NOT click on the first name at the top of a search engine page as much as they will click on the first business they are familiar with or have a preference for.
To claim an R.O.I. from a website, when preference and traffic were created as part of the total marketing mix prior to the online search, is just not credible. The credible radio marketing consultant can win the trust of local advertisers when she clearly positions her understanding of radio's role in the total marketing mix rather than positioning her station as "number one" or as being a lone business saviour.
*The SoundADvice radio e-marketing system surveyed 10,111 locally owned businesses across 76 North American markets in May, 2012. 93 percent said that R.O.I was their biggest marketing concern.
Wayne Ens is president of ENS Media Inc., specializing in building stronger advertiser relationships for radio marketing professionals. If you are planning a sales conference, contact wayne@wensmedia.com to invite Wayne to facilitate the Making Radio Tangible workshop to arm your sales people with five proven tools to validate radio's pre-eminent role in the new media marketing mix.
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