Measurement Is Not for Sissies
6th March 2006 by Merry Elrick
In a previous post, Angie Jeffrey is understandably overwhelmed by measurement options. She is right when she says we have to do some serious thinking to determine what our goals are. And if we do, we’ll discover that our goals are aligned with, or the same as, our organization’s goals. And that is almost always related in some way to bringing in revenue, adding value or increasing profitability. In other words, money.
We have been using soft measures, like awareness, too long, according to the Association of National Advertisers. We either need to be contributing to short-term cash flows or long-term shareholder value, and we need to measure our return on investment (ROI).
As I mention in an article in the measurement issue of CW Online, when you know ROI of your marketing efforts, you also have access to data that will help you understand a great deal more. You can:
Provide a solid rationale for upcoming budgets.
Compare actual budgets to costs-to-date.
Compare ROI of each component of your marketing communications mix to see what works best.
Make adjustments to your existing program to get the greatest impact for your communications dollar.
In short, you can manage your budget as the investment it really is, and you can achieve more than justification of your marketing efforts–you can increase the return on your marketing investment.
This requires a certain amount of courage, as Ryan Williams points out in a previous post. When we determine ROI, we’ll expose the components of our marketing mix that are not producing as well as others. But only then will we know what we need to change. And only then can we improve.