In the 1800s, John Wanamaker, a US businessman considered to be a proponent of advertising and a pioneer in marketing, said, "Half the money I spend on advertising is wasted; the trouble is, I don't know which half." Since then great strides have been taken in marketing metrics to try and measure the effectiveness of marketing spend - and the result is often a fairly clear picture of, say, advertisement or a speak campaign.
The problem often comes in with the multi-channel approach, where consumers are hit with more than one message across a range of channels, such as direct mailers, TV, billboards, and so on. One can often effectively measure whether the campaign worked holistically, but it's important to know whether all the mediums worked to their full potential. Or else you may be wasting some of your marketing budget.
During difficult economic times it's common for companies to cut marketing budgets first because revenues aren't being achieved. I have always maintained that this is the worst thing to do when times are tough. But we have to acknowledge that we need to be accountable for our marketing spend.
Now more than ever - with ever-tightening budgets - we have to be careful to look at both the objective and the content of every message or advertisement that goes out. As marketers, we can be prone to wasting. If the answer to the question 'why are we placing this ad?' is 'because we booked the space', we should be re-evaluating our thinking. We should be booking space according to objectives and messages, really looking at where and how we spend our money.
The renowned annual MillwardBrown Digital & Media Predictions of 2015 state that this year "we foresee ever-greater tension between four competing channel-planning perspectives. New technologies are emerging all the time that give media agencies greater control over how and when consumers are exposed to brand messages, but there are still huge challenges surrounding how to connect plans across media silos and how to reduce and make sense of digital data complexity. Creative agencies have a more exciting box of tricks and more ad formats to play with than ever before, but telling a coherent, consistent, and connected multiscreen and multimedia story across different audience generations is no easy task."
The steps we're taking this year in marketing are to ensure we have an objective and to make sure that every ad we run works for us; we don't just run it because we have the space or the budget. We're applying our minds to what we want the target market to think and do. No longer should we simply spend the money because we have the budget or because we did it last year. On a daily basis, adverts cross my desk for approval that have no impact, are ineffective or are an absolute waste of money.
You can clearly see that there is no objective to the advert or the campaign; no thought has been applied to who we are targeting, what we want that market to think or do. Very often the media selected is poor, such as outdoor ads in poorly located areas, radio spots at inappropriate times, digital ads that are totally wrong for the campaign. This is total wastage and a potential saving to the bottom line. Perhaps, in considering John Wanamaker's quote above, we should be cutting our budgets by half and really making that half work!
This wastage raises the question of whether marketing works or not. We need to know how much of our marketing spend is doing the job that it is intended to do. When we trim our budgets, we need to be careful that we are trimming the fat off the budget, not the muscle. The fact is that when an advertisement is placed where it isn't effective, we're wasting a lot of money: it's not just the cost of space; it's also the cost of the creative, the agencies, the production, and more.
We need to spend money carefully and be cognisant of the real cost of advertising, particularly in a recession. And when the economy turns, we cannot become complacent. Accountability for all our marketing spend must always be our watchword.