2nd of the six Marketing articles I plan to publish on my wall.Happy Reading 🙂
“Marketing Return on Investment M-ROI”
How do we calculate or justify the marketing return on investment? On ROI issue if you go to sales team they will give you a clear numeric figure of how much they sold this year compared to same period last year, customer service or production team will also be able to put numeric figures while answering this question. But what about the marketing team? They might come up with the statistics of how much the last TV commercial was popular,How many times the video got liked & shared on social media ,how much GRP or PR coverage was achieved & so on. So what to do about it? Is it the campaign visibility, word of mouth, top brand award, market share in the competing category or popularity of the brands? Since the rise of brand concept it has been long debated by prominent marketers. Some argue that an organization can’t measure the return on the expenses of its marketing campaign. To some extent that’s the truth; but with the pressure of uncertain macro economic factors & uninvited recession, it’s probably best to select a point of return. There has to be a point where an organization needs to review it’s marketing efforts, expenses & reset the entire course & marketing mix, if necessary.
Impact on market share in the competing category often tempts to draw a conclusion. But share of sales is a vulnerable dimension because of its dependency on the internal functional & external macro factors. Moreover you would find multiple departments claiming the credit thus making it a weaker decisive factor. Obviously marketing has a big role to play here. But no one is really sure whether in next retail audit the share would stand or not & if not whom to blame. It might be unavailability of adequate stock, reduction in distributors’ interest in the business or just some competitor’s cunning mega discount offer. Further to that, these numbers are conventionally used to measure the efficacy sales & distribution team.
“Top of Mind” can be strong contender here. All marketing efforts are funneled toward creating ToM. It’s a popular belief that Top of mind is the future market share. It’s an indicator of how successfully the marketing activities were able to keep the brands at the top tier of target consumers mind thus enhancing the probably of the product or service to the availed by target consumers. However ToM does not give idea about other consumer behavioral aspect needed for a sales deal to be closed. Comprehensions of right message or intended value proposition are not reflected from this numeric indicator. Be the first to be remembered might not be enough to keep the cash register ringing; Specially if the category has intense competition. But obviously ToM can be the early warning system of your entire marketing efforts but not a ROI measuring tool.
If marketing ROI is to be measured based on individual campaign popularity that also might mislead because of the uncertainty of residual effect of the campaigns. Moreover discontinuous nature of market often demands a periodic tactical campaign whose effect is short-lived. Archiving these results to be used as a ROI measuring tool is probably not worthwhile as pedigree is not something a marketer to be judged by. Mix of tactical & strategic marketing campaigns is a common recipe of brand management. While as mentioned earlier tactical campaign impact is measurable quickly but a question remains in case of strategic campaign. Strategic campaigns mostly concentrate on the intangible part of the brand building like identity creation; establishing value proposition etc. It takes time to take its impact on brand health. Complexities like these make it difficult to use individual or cumulative marketing campaign success to be referred as marketing ROI measurement tool. Again measuring success of campaigns is also multidimensional; awareness, likeability, trial generation these objectives are just some of the examples. Omni directional objective based KPIs are a chaotic method which leaves behind scope of unproductive debate.
I look at it in a very simple way. Marketers are trusted with the task of creating an identity for a brand at the 1st place later use this assertive identity to build relationship & finally generate mutually fruitful outcome from that relationship. ROI should be measured for a given time span & budget based on how successfully the intended identity is created plus what kind of relationship is built with the consumer with this identity& finally how efficiently this relationship is benefiting the brand & consumers. These major three objectives if fulfilled can justify penny spent behind marketing efforts.
For a periodic check & balance I would suggest a quantitative brand equity study where the awareness, repeat purchase intention, likelihood of recommending the brand should be measured as these are directly related to immediate business result. Moreover these results will put light on gain & lose from frequent tactical campaign. Many research firms in the country have well developed models for this. Normally it’s done every quarter if needed can be done more frequently. Mostly a 10 point scale is used & any score mire then 5 is commendable. However additional attributes can be included in the model based on the environment the brand needs to perform.
Measuring identity is tricky but very essential. It’s like the core of all marketing efforts. Most of the time the brand is just a word or a meaningful logo. In order to be able to gain a positive ROI marketers have make consumers say the exact same word, make them associate the same values with the brand that was decided before embarking on the journey. Qualitative brand equity study can successfully dig out the brands identity. David Aakers model is one of the best available options. The core values the brand owns or stands for come out from this kind of study. Along with that detractor values & absentee values can also be found out from this study. Seat back & check whether intended identity or values are associated with the brand or not & the answer of that can be used to measure marketing ROI. Doing this in a year will give an organization enough guidance to justify its marketing investments.
Impact on both quantitative & qualitative brand equity is probably the best idea to measure the ROI. because gain in share of sales, GRP, TOM,PR, Likeability of individual campaigns are one dimensional; these are like individual GPA whereas the Brand equity index is the CGPA. To sum up I would like to suggest quarterly quantitative & yearly Qualitative Brand equity study as these are the best possible scientific tools available right now.