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Economic Downturns And ROI Scrutiny


Economic Downturns And ROI Scrutiny

Branding Strategy Insider helps marketing oriented leaders and professionals like you build strong brands. BSI readers know, we regularly answer questions from executives and marketers everywhere. Today we hear from Dave, a Strategy Director in Eindhoven, The Netherlands who asks this about ROI scrutiny in a down economy…

“As in previous downturns, any campaign or promotion proposal has to stand up to ROI scrutiny if it is to make it beyond the concept stage. Do you have any advice for the setting up and measurement of ROI in the current climate?”

Dave, we appreciate your question. As you probably know, it is very difficult, if not impossible, to measure ROI for most brand equity building activities, which tend to have a slow, integrated and cumulative impact over the long-term. Luckily, it is much easier to measure ROI for many shorter-term brand and product marketing activities, which tend to focus on triggering a sale or at least a sales lead. Here is what I would focus on:

•Highly customer-targeted Internet marketing activities such as keyword searches and other measurable actions
•Direct marketing of any type including online newsletter-related offers, email campaigns and direct mail – you can measure ROI for all direct marketing activities
•Any highly targeted lead generation actions such as trade show offers (providing that you carefully track the progress of the leads throughout the sales process)
•Publicity-related actions – while these are not always measurable, they are relatively inexpensive (usually incurring just a PR person’s time) with potentially big impact and the added benefit of being more believable than ads
•Customer appreciation events and activities, especially if you can incorporate add-on sales and encourage customer referrals through them
•Online guerilla marketing activities – like publicity, these are mostly time- not cost-intensive

Finally, I would caution you that companies that continue to invest in brand building activities during economic downturns emerge from those downturns with greater brand awareness and sales momentum than do competing brands that have cut back on their brand building activities during the downturns. What P&G did in 1929 is enough proof for most.

I wish you much success with your recession marketing efforts.

We share more on Recession Marketing here and here.

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Stuart Foster on April 14th, 2009 said

Targeted leads are something you should always be going after regardless of the present economic situation.

The real demon is the pull-back on branding funding. An up and coming company with a slightly better cash flow has a huge opportunity to over take their sleeping rivals if they play their cards right.

Brad VanAuken on April 14th, 2009 said

I agree with your comment on branding funding Stuart. All of the marketing activities I recommended for an economic downturn including targeted leads) could and should occur as ongoing activities regardless of the economic climate. Smart organizations pursue these whether they have an extremely tight budget and ROI oversight or not.


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