Each year brand managers are tasked to achieve sales and profit objectives. This frequently leads to questions on how to improve the effectiveness of marketing and advertising programs. And this question is often coupled with other questions on the best ways to maximize ROI.
In the Anatomy of Effectiveness*WARC authors address these complex questions by first defining what is meant by “effectiveness”. Here’s their definition: “In its broadest sense, effectiveness in advertising is simply the ability to prove that advertising has delivered on its objectives…” Historically, advertising objectives were focused on building brand awareness and changing brand perceptions. However, these authors confirm that there is an evolution to a narrower definition that “focuses on proving advertising’s impact on business metrics such as sales, profit or market share.”
This new definition has taken the advertising industry into a most uncomfortable space of predicting financial results. Ratios and metrics like Return on Advertising Spending (ROAS) are often cited to demonstrate effectiveness of a specific tactic. Likewise, digital attribution is often used to demonstrate cause and effect. Measuring campaign effectiveness goes far beyond these dashboard metrics. Ultimately, this new definition of effectiveness changes the time horizon for measuring results, and as the WARC authors conclude, “marks an attempt to prove advertising is an investment that pays back rather than a cost to be managed.”
Since the early 1980s, I have been lucky to work with clients who were willing to invest in customer research and detailed sales audits to prove campaigns are an investment that pays back. These studies were carefully coordinated with the sales department and conducted over 6-9 month time frames once a campaign ended. That time is needed to accurately demonstrate the residual influence of advertising on sales. The residual campaign influence, or change of consumer perceptions about the brand and resulting buying behavior, ultimately would yield the greatest financial value of campaigns.
The WARC paper does a good job of isolating short and long-term influence of marketing communications through well-documented research. In short, the most effective campaigns should:
- Spend sufficiently to achieve a competitive share of voice
- Be integrated campaigns that balance “top of funnel” brand building with “bottom funnel” calls to action.
- Attract new customers through greater media reach
- Have emotionally engaging creative elements
- Build a distinctive, memorable brand that is easily recognized
Based on my experience, however, the greatest driver of campaign ROI is the willingness to test different campaign scenarios so you can identify the most efficient approach for achieving effectiveness. If you need help developing the process and research approach necessary for answering the efficiency questions, give us a call.
*The Anatomy of Effectiveness 2022 Updated Edition. The Five Building Blocks of Effective Advertising.
Credit to Jim Cobb (The Bloodhound Group)
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