I am tired of hearing some business people say that there is no way to correlate business results with marketing expenditures, implying that marketing is an expense with no corresponding return. Some other business people are slightly more charitable, and say that there is no way to measure direct results. This is wrong – at least for direct response marketing, including direct response marketing via the Internet. (Many direct marketing web sites even offer free direct marketing ROI calculators.) For other types of marketing – this is partially wrong.
There are a few important components to measuring the results of marketing programs: (1) being clear about the program’s objectives upfront, (2) being sure that there are ways to measure results against the objectives, (3) measuring those results, and (4) evaluating the program’s results against the objectives. This is a closed loop system.
It is also important to keep in mind that there are marketing programs with long-term results such as brand building and there are marketing programs with short-term results such as direct response marketing and sales promotion. You must be clear about which ones each marketing investment is intended to achieve.
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2 comments
Reasonable Robinson
November 9, 2007 at 9:45 am
Absolutely, it is essential to measure all dimensions of marketing activity even though some of theme might be less tangible in nature. I have posted a comprehensive literature review of the latest academic/ business approaches to Marketing ROI in 3 parts on Gullibility entitled Marketing Metrics, which your readers might find useful.(apols for appearing spammy)It covers the broad sweep of approaches from tactical to strategic measures, and qualitative / quantitative measures, all of which need blending for a balanced perspective on campaign effectiveness through to Brand Equity measurement. In particular I review the work of Ambler, Shaw & Merrick, Macdonald, Ehrenberg, and Clark. As Shaw and Merrick say unless marketers face up to the issue of ROI they will never overcome the perception others hold of Marketeers that they have a cavalier attitude to $’s and £’s, such that “their disinterest in money often leads them to be distrusted with the stuff”.
Derrick Daye
November 9, 2007 at 11:12 am
RR,
Thanks for your thoughts. Sounds interesting. Perhaps your post would be a good fit here as we get closer to this topic in the weeks ahead.
Please drop me a line at the email under my photo to the left.
Best,
Derrick
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