Strategic Marketing Consultants - Return on Marketing Investment (ROI)
- 4 years ago
Do you sometimes feel like your marketing and advertising is a bottomless money pit? You hire an ad agency that asks what your budget is and then goes about designing creative or catchy ads that are designed to get the attention of your prospect and then imprint your company name through repetition. The problem is that virtually all ad agencies are still living in the ‘Big Brand’ era of the past. Back then, creativity and repetition became the calling card of big advertisers and their methods trickled down into other media. Starting back in the 70’s this became the no-brainer formula for market dominance for companies with the financial resources to pull it off. Business schools started teaching marketing and advertising based on these hackneyed methods, churning out graduates who only knew one way to do “marketing.” Brand Builder marketing and advertising became the de facto standard for “how you do it.” And now, after a few decades, nobody even questions the formula.
The current state of marketing is a mess. Most ads can be classified into two categories: 1) institutional advertising or 2) menu-board style advertising. Institutional ads essentially say, “Here’s our name, here’s our best attempt at being creative, and here’s the biggest budget we could muster to support this C.R.A.P. (Creative Repetition And Positioning). Virtually all ad agencies large and small – specialize in institutional advertising. It’s what you see in most print and TV ads.
Menu-board advertising essentially says, “Here’s our name and here’s a list of what we have for sale.” Just like a menu at a restaurant. For example, “We’re law firm. We handle motor vehicle accidents, medical malpractice, nursing home abuse, work-related injuries, wrongful death, dog bites, social security disability, dangerous drugs, and truck accidents.” Oh and here’s a picture of one of our attorneys. Get the point? Just like a menu at a restaurant, the ad is simply a list of services or what’s for sale. You can’t measure ROI with institutional or menu-board style advertising. It’s impossible.
Any dollars spent on advertising and marketing should come back to you – and bring along a bunch of friends with them. But how can you know in advance?
Let’s take a look at how to figure out how much money you should spend on advertising. It seems people always want some sort of magical formula; they want to know in our industry our ad budget should be 10% of sales. Or in this other industry it should be 15% of sales minus cost of goods sold or some other arbitrary figure.
In our professional experience we believe you should spend as much as possible as long as it’s making you money. But you have to think a certain way to pull this off. Most people concern themselves too much about industry standards and corporate budgets rather than monopolizing their marketplace.
Too often clients are shocked when they find out how much media costs when it comes time to launch their advertising
The current state of marketing is a mess. Most ads can be classified into two categories: 1) institutional advertising or 2) menu-board style advertising. Institutional ads essentially say, “Here’s our name, here’s our best attempt at being creative, and here’s the biggest budget we could muster to support this C.R.A.P. (Creative Repetition And Positioning). Virtually all ad agencies large and small – specialize in institutional advertising. It’s what you see in most print and TV ads.
Menu-board advertising essentially says, “Here’s our name and here’s a list of what we have for sale.” Just like a menu at a restaurant. For example, “We’re law firm. We handle motor vehicle accidents, medical malpractice, nursing home abuse, work-related injuries, wrongful death, dog bites, social security disability, dangerous drugs, and truck accidents.” Oh and here’s a picture of one of our attorneys. Get the point? Just like a menu at a restaurant, the ad is simply a list of services or what’s for sale. You can’t measure ROI with institutional or menu-board style advertising. It’s impossible.
Any dollars spent on advertising and marketing should come back to you – and bring along a bunch of friends with them. But how can you know in advance?
Let’s take a look at how to figure out how much money you should spend on advertising. It seems people always want some sort of magical formula; they want to know in our industry our ad budget should be 10% of sales. Or in this other industry it should be 15% of sales minus cost of goods sold or some other arbitrary figure.
In our professional experience we believe you should spend as much as possible as long as it’s making you money. But you have to think a certain way to pull this off. Most people concern themselves too much about industry standards and corporate budgets rather than monopolizing their marketplace.
Too often clients are shocked when they find out how much media costs when it comes time to launch their advertising