Will the return on investment be worth the effort?

When you put in the effort, you want to see that it’s rewarded.  You want Return-on-Investment.  ROI is an analysis of what is invested, how it is invested and what you gain from that investment. Marketing managers and brands who run marketing plans without full ROI analysis risk diminished or negative ROI as a result of lack of change.  Many big-name brands are guilty of falling into complacency.  Proctor & Gamble on the other hand challenges its marketing executives to ‘build on their learnings’.  They are asked to show what they have learnt from the marketplace.  They then build those learnings into the next marketing plan and ROI inevitably goes up.

 

ROI analyses the profit generated as a percentage of the budget taken to produce it

ROI analyses the profit generated from an integrated marketing communications plan as a percentage of the budget taken to produce it.  That profit can be in the form of extra sales generated from the marketing activity or may be something less tangible (but still measurable) such as brand awareness.  If increasing awareness is the advertisers goal (brand marketing) then the agency will calculate the correlation between brand awareness and market share.  If market research shows the brand’s awareness has increased, market share can be said to follow.

 

Each marketing tool within the communication mix has a specific ROI analysis method

Each of these marketing tools within the communication mix will have specific ROI analysis methods;

Advertising    

Includes ATL channels such as Television; Radio; Print and BTL channels such as OOH advertising.  This also includes online such as PPC marketing; display advertising, remarketing and retargeting.

Personal Selling   

Sales force; Tele-marketing staff; affiliate marketing

Public relations   

Editorials; Advertorials; Newsletters; Viral Marketing; Press Releases

Sponsorship   

Advertising via celebrities; TV shows; products; services; events

Event Marketing

Exhibitions; virtual exhibitions; webinars; conferences; roadshows

Direct Mail   

post DM; email DM; Circulars; Leaflets; Inserts

Directories   

print directories; online directories; link-building; review marketing

Retail  

In-Store POS; Website (SEO)

Promotions  

Incentives; Rewards; Data-marketing loyalty cards; Content marketing

Merchandising   

QR Codes; Augmented reality apps; Virtual Tours; Package advertising

Registered Trademark

Each communication channel has the ability to measure the ROI from the activity.  Some channels such as business directories are now highly ROI focused and therefore becoming a performance marketing channel rather than a brand marketing one.  In 2013, YouCom Media created a specialist business directory advertising agency, YouDirectories to bring our Japanese ROI focus to the channel.  YouDirectories was the first business directory specialist agency in Europe to deliver pay-per-call advertising for Yell.com at a time when all advertisers had to pay for 12-month advance tenancy advertising.  ROI was measured by every call and click resulting from the advertising.

 

Event marketing divides the profit from sales orders by the total cost of the exhibition

The lifetime value of a customer acquisition can be difficult to calculate.  But the short-term ROI isn’t.  Event marketing for example divides the profit from sales orders by the total cost of the exhibition.  Sometimes definitive sales orders aren’t known, or aren’t enough to produce positive ROI, but then it is possible to identify potential sales orders using a conversion rate for the sales enquires gained at the exhibition.  This is one way we produce pay-per-lead advertising campaigns at YouCom Media and YouDirectories.

 

Any activity made by a business has to show tangible added value to the bottom line

Some marketing managers (and some agencies) claim that certain channels cannot be measured for ROI.  Social media is often seen as just such a channel.  But all channels can be measured if the marketing staff are inventive enough.  Social media has a wealth of data, follower numbers and frequency / recency studies can be made, propensity modelling applied, social sentiment correlated to sales etc.  Marketing managers must always remember that any activity made by a business has to show tangible added value to the bottom line.

 

Follow the YouCom Media news posts to see the next developments.

 

Glossary:

ATL- Above the line

BTL – Below the line

DM – Direct Mail

OOH – Out of home

POS – Point of Sale

PPC – Pay per click

ROI – Return on Investment

SEO – Search Engine Optimisation

 

Required reference:

YouCom Media News, April 2018, London, ‘Media ROI.’

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