Addressing the Question: Measuring Advertising ROI

One of the hardest questions, I think, for marketers and advertisers to answer is the dreaded question “How can I measure my advertising?” because, unfortunately, it just isn’t that simple. That isn’t to say that there is no way to do it, it just is a lot more complex than most would think. So, this post is a listing of my three favorite ideas on how to explain the complexity of advertising return on investment  (ROI) to someone when they ask the question.

The Team Concept

Especially helpful if the person plays or watches sports, for this explanation, you ask the person to think of a team sport, such as hockey. Then, ask the person to identify only one person from the team who responsible for the most recent win of that team. Depending on what type of sports fan they are, they might mention the coach or the star of the team, but the reality is, it takes the whole team to win or lose a game. Each person plays a part in the end goal. Then you can explain how advertising works similarly, because some combination of advertising, promotions, and other marketing caused the purchase through reach, branding, frequency, etc.

Google does a good job of explaining this in the video below. You only need to watch the first minute of the video though. After that, they try to provide you with a solution that also isn’t reasonable because it assumes all communications come from the company (friends and family are a huge part of purchase decisions!) and assumes only an online strategy. Nonetheless, they highlight the team approach very well.

Go Ahead and Do a Survey

Especially if you are being asked by someone who likes numbers, actually doing a “How did you hear about us?” survey will help your case. Those of us in advertising and marketing know that people have no idea where they see or hear things or, at a grander scale, even what causes them to purchase something. But others don’t. For these people, a simple, “How did you hear about us?” will help you prove the problems with measuring advertising ROI because people will report seeing or hearing from you in a lot of places you weren’t.

I used this approach years ago using Facebook advertising. I created Facebook ads that linked to a “please contact me” style form. The only way to get to the link and the form was through the Facebook advertising. But, just to prove my point, on the bottom of the form was the “How did you hear about us?” question with a listing of social media sites (Facebook, Twitter, MySpace, etc). Keeping in mind that they could not get to the survey through any other means than Facebook and the fact that they had just clicked on the link. Now, here’s the results: 50% of respondents clicked on some other social media site than Facebook. I know, I was shocked too, but that’s completely the truth.

Tell Me About Your Last Major Purchase?

Probably my favorite way of showing the difficulty of measuring advertising ROI, however, is to ask the person about themselves. I generally pick a car, but you can pick any major purchase, and then just ask them what specific ad caused them to make the purchase.

I used this technique with a friend of mine. In his case, he had just bought a new car so I asked him what specific advertisement had caused him to buy that particular car. At first, he pointed to the 0% financing deal that had just came out. But, after asking him if that really was the only thing that caused his decision, he then talked at length about how his family always buys Fords, how he had read a lot of good reviews on it, how he’d seen a lot of ads about what his particular Ford could do, and even how he had seen multiple ads for the 0% financing. After all of that, he went silent. Then he just said “I get what you mean now.” “Perfect,” I said and that was the end of the discussion.

What’s your favorite way of explaining the difficulty of measuring advertising and marketing ROI?

The one thing marketers forget to tell clients, but shouldn’t

People in line at Marble Slab Creamery for free ice cream
People take advantage of free food days, but there’s a reason major chains still employ this marketing tactic: Even with some people taking advantage of the promotion, the chain still comes out ahead in terms of profits and branding. Photo from Flickr Creative Commons: Walter Lim.

 

 

I once had this ice cream store as a client. We did a promotion that, for one day, we gave away free ice cream to everyone who showed up. That year, the client’s sales increased 84%! But the owner never let me do the promotion again because he saw a couple of people take advantage of the promotion and get in line more than once. I ended up losing him as a client.

 

The above story was told to me by a very successful marketer about one of his early experiences being a marketing consultant. He was mostly venting, but his story has reminded me over and over about the one thing  marketers forget to clients, but shouldn’t. That is: There will be abuse, but the campaign can still be successful with abuse.

Rationally,we all understand this. We understand that there are some people in the world who will take advantage whenever something is offered for free or whenever there is any other promotion offered. But when they actually see it happening or hear a story of an incident of abuse, the emotional part us kicks in and we have a difficult time tolerating abuse and processing that it’s rarely wide-spread.

Yes, in a perfect world, it wouldn’t happen. But is does AND a campaign can still be successful with abuse. Think of the ice cream store story above again; those people getting in line twice  cost the owner additional money, but his sales went up 84% for the whole year. I doubt the total cost of the abuse came anywhere near to the amount he gain in those additional sales throughout the year.

We need to make a point to talk to clients about this upfront and come to an understanding that the abuse will happen, but the benefits typically significantly outweigh the costs.

Reader question: How do restaurants benefit from giving free meals on Veterans Day?

veterans day

A reader, who is a veteran, asked, “How do restaurants benefit from giving free meals on Veterans Day?”

Let me first start by saying that it is my hope and my assumption that the main reason that businesses offer free items and discounts to veterans is because they truly respect what they have done for our country and want to honor them. With that said, they do gain from supporting veterans and this post focuses on those benefits.

Employee morale

If the organization has veteran employees, one benefit of giving discounts or free food/items to veterans is that it is a way to communicate to their veteran employees that they support them. This can be a morale-booster for veteran and non-veteran employees alike.

Product/service trial

Discounts or free food/items to veterans encourages them to try a new product or service. For example, a veteran may have never tried a particular restaurant, but might because of the free promotion. That veteran may like it and come back on a regular basis after that, which means a lot of additional sales for the restaurant. Or, perhaps a veteran hasn’t been to a particular restaurant in a long time and the promotion reminds them how much they like it, so they start visiting more frequently.

Additional sales of family/friends that come along

The majority of people do not go out to eat by themselves. So, it’s most likely that a veteran going to a restaurant for a free meal or discount will bring family or friends along with them.

Very similar to offering free kids meals, the math on this works. A veteran will most likely pick a mid-range item on the menu and bring family and friends. It’s very likely that the profit from those family and friends will cover the cost of the veteran’s meal. And, the restaurant has trial (see above) from the family and friends as well as the veteran.

Publicity

Media mentions are extremely valuable to business and organizations. Everywhere you look right now, there are news articles listing organizations offering promotions/free meals for veterans (Example: ABC News, The Top Veterans Day Deals and Freebies Tomorrow). And, let’s not forget about all of the social media sharing that is happening between people sharing the promotional information. So, by offering a promotion, these organizations are seeing a Return on Investment from the media mentions.

Me too/Social pressure consideration

I’ve written before about the dangers of copycat “us too” style of marketing. Again, I’m assuming that most restaurants give away free meals to veterans because they want to show their appreciation. With that said, I do think there is a lot of social pressure to do so because other restaurants are doing it and restaurants are afraid of negative publicity/pushback if they don’t do it.

So hopefully, dear reader, this didn’t kill your view of this important day. The above are just considerations. Thank you for your question and Happy Veterans Day.

Avoid the copycat “us too” style of marketing

A cat sleeping on the glass of copying machine
Photo from Flickr creative commons: miconian

If you’ve ever worked in marketing management, you’ve probably experienced that moment when someone walks into your office or sends you an email with one of your competitor’s ads. The delivery is different depending on who they are and their directness level, but the message is always the same, “They are doing this, so we should be too.” What they don’t realize is, there are a whole host of reasons you shouldn’t copycat your competitors.

And balloons sell cars…

I’ve heard the phrasing above several times in my career as an internal joke amongst marketers. To my knowledge, there’s never been a legitimate study that has shown a ROI correlation between putting balloons on cars, or having a pink gorilla out front, and the actual selling of cars.  In reality, the advertising and selling of cars is a complex process (for more on this, see Addressing the Question: Measuring Advertising ROI).

The point here is, car dealers put balloons on their cars because other car dealers put balloons on their cars. This “us too” reaction is not founded on the actual selling of cars. Just because someone is doing a particular marketing technique doesn’t mean it actually works.

2 companies using the same message/strategy = not effective

Still using the balloons on cars example, even if, at some point, it did draw potential buyers in, it was probably because having balloons on cars was rare. People notice things out of the ordinary, not the ordinary. Now that everyone else has balloons on their cars, it’s become ordinary.

Similarly with advertising claims, if two major brands took the exact same marketing position, they’d simply cancel each other out.

What works for one does not work for another

You have a unique selling proposition (if you don’t, that’s your issue) in some way shape or form. That means you have a unique way you need to communicate and a unique set of people you need to communicate with. What that means is, what works for your competitor (if what they are doing is really working), probably won’t work for you.

When I was working as a marketing director for community colleges, people would bring me ads all the time from four-year schools to look at. Although looking through them did spawn some great ideas, I had to also remember that they were targeting a different group than I was.  I was targeting local students that wanted to stay local, they were targeting students from across the country who wanted to go away to school. I was targeting an older set of students (our average age was 29), they were targeting 14-18 year olds. And so forth.

What you should be doing instead

It’s hard when the above happens, especially if it’s pressure from your leaders, to not fall victim to “us too” type advertising campaigns, but you have to be willing to or you’ll end up wasting a lot of time and money.

The best defense to this is a good offense; have a strong marketing plan developed that outlines your unique selling proposition, your unique target market, the best ways to communicate with that target market, and how you’re going to differentiate yourselves from your competitors. Communicate this plan early and often.

At the same time, be open to gleaning ideas by watching competitors, but only utilize them if they your unique selling proposition and marketing vs. harming it.

And, if all else fails, forward this article as a response back to the person who suggested you should copy your competitors  🙂

Addressing the Question: Why branding is important

A couple posts ago, I gave my thoughts on how to respond when asked about advertising return on investment (ROI). Today, I’d like to offer my favorite analogy to explain why branding is important. Although the need for consistent communication seems so fundamental to those of us in marketing, advertising, and communications, it isn’t to everyone. So, I created the “Meet Joe” analogy below to explain branding in a way that most, if not all people understand. If you like it, please feel free to use it for non-commercial, non-proprietary reasons. All I ask is that you give me credit for it.

Meet Joe Branding Analogy

Envision yourself as a hiring manager and…

Meet Joe

Man in a suit
Photo from Flickr: David Boyle

Joe is interviewing for a position in your company. Because of how you do your interviews, you end up interviewing Joe three times. At each interview, Joe appears to be different. He gives a different resume each time with basically the same information, but with some variations. One time he’s dressed in a full suit, then the next he’s in khaki’s and a polo shirt. Then the next time he’s dressed in slacks and a sport coat. One time he comes in and acts very formal and professional and then the next time he is very laid back and acts like you two are best friends. Then the next time he comes in, he acts very distant.

  • Based on that info, would hire Joe?
  • Why not?
  • Do you trust him?
  • Is the communication about your business like your interview with Joe?
  • Is it consistent?
  • Are you confusing your customers about who you are and/or causing them not to trust you?
  • Inconsistent branding including different logos, different looks to your different marketing pieces, etc. can confuse the customer. This is why branding is important.
  • It’s ok to emphasize different elements of your business, but if you’re doing it so much that your customers are confused about who you are, it’s a problem.

So there’s the analogy. I use it a lot during my talks on Broken Windows Theory and marketing. Do you like it? Would you make any changes to it? How do you explain why branding is important?

Social media isn’t free advertising

I regularly run into small business owners that want to do social media because it’s free advertising. In some ways, the statement that social media is free advertising is free is true, but, in reality, it isn’t.

 

Effectively using social media for your business requires strategy

Effectively using social media for your business requires careful planning and strategy. Often, people create a Facebook page or a Twitter account for their business without putting much thought into it. Although you may gain some “likes” or “followers” that way, it’s not the most effective way to build your brand and sell your product or service on there. In order for your social media strategy to turn into a brand-building/selling advertising tool for you, you’ve got to create an effective strategy behind it

 

There are a  lot of great books and online articles on how to do this, the top one I recommend is The New Rules of Marketing & PR

 

Time=Money

I’ve yet to see an effective social media strategy that doesn’t require careful planning and writing/designing posts and monitoring and responding/interacting in a timely manner. It is a conversation, after all, and how would you feel if you walked up to a customer service counter and had to wait there a week for a response?

 

Effectively planning, designing, writing, monitoring and interacting on social media takes more time than most people think and that’s where you find the “cost” of social media. Places like Facebook and Twitter may be free marketing and advertising tools, but time=money and, to utilize these tools right, you’re going to spend a lot of time working on them.

 

My advice

My advice to be effective but not have social media eat up all your time is to start with one platform, research and develop an effective strategy, and implement it.  After that is running well and you have a good feel for the amount of time it takes to maintain and continually improve it, move on to one or two more platforms.

A business sign that makes me laugh

A changeable sign  by Stutts-Cox builders in Tomball Texas reads, "Quiet Please Meditating..The sign"
This sign made me laugh each time I drove by when they put up this message.

For the past week the Stutts-Cox Contractors sign I’ve driven by on my way to work has made me laugh with the message “Quiet please meditating..the sign.” Typically they use their sign on the side of a 55 mph road to congratulate a community member that has done something of note, such as congratulate the local homecoming queen and king.

Do I think it’s the best advertising for them? Honestly, no. I’ve been driving by this sign for a year and a half and, prior to taking this photo, I’d never read the name of the business responsible for the sign.  As a former outdoor salesperson, I can tell you it’s too many words/too small of words to be seen at that speed and there’s too much visual clutter around it.

But I do think, for those who do know who the sign is by, it creates some community goodwill for the company. By putting up a humorous saying every once in a while, I also think this sign gives the company a bit of a personality, which is becoming more essential in branding these days.