This weekend, as I sat at home watching one of my favourite sporting events of the year, I found myself completely consumed by one of the games most exciting distractions – the advertisements. Dozens of articles have already been published talking about the incredible advertisements that were shown around the game, ratings have been established, and brands panned. Blogs have discussed the unbelievable tweet volume seen throughout game time, social networks have been filled with game memorabilia, and debates have been had around the effectiveness and impactfulness of various advertisements.
While the commentary was fun to follow, as a person who works with brands trying to accurately value and measure the impact of social communication on a brand, I have to admit that, besides the game, the biggest question – and most entertaining question – that I found myself continuously pondering, relates to the ROI of the many advertising campaigns that were shown. I, like many business leaders, would have loved to have a commercial for their brand airing on TV or floating virally online around this grand event. After all, who would turn down the opportunity to have 20 million eyes looking at their brand, products, or people. But what cost is the right cost to pay for such exposure?
Advertising, like football, is a game of inches. And, in any advertising game, before playing, one has to try to understand whether cost of such an investment will be worth the potential benefit.
Moreover, with pressure to make these decisions far in advance of an event, there are challenges relating to uncertainty that confound and confuse executives and managers alike. Overcoming these challenges, or at least making sense of the issues, is critical, because there is a choice to be made and a play to be run. TV? Print? Online only? A combination? What is the right call that will set you up for success? And, how will you know.
Typically, in a Google Ad Words context, return on investment would be categorized as the ratio between the amount of “profit” gained from a piece of advertising, or a campaign versus the total cost of building and running that campaign. In a situation like the Super Bowl – one that will attract millions of eyes, the cost is fairly certain (although, depending on the channel that you choose variability can persist). The perplexing part of the equation that I wrestle with every day, is the “profit” or benefit.
“Profit”, means different things to different brands and situations. Like any great defense or offense in football, it is difficult to assess. When looking to measure profit, I am struck wondering what metrics might I use most effectively to measure or calculate “profit” from an advertisement:
- How can I correlate back the number of likes that an ad receives, or the number of eyeballs, to something like purchases, brand strength, or even brand recognition?
- And what tools should I use, as a marketer, to answer some of those questions & ensure that I am capturing the right data?
- How do I define “profit”?
- How do I track & know that I am marching down the field toward that goal (or on track to hit it).
- And, finally, what is my objective with an advertisement or campaign?
While I work actively to solve those problems, and will touch on some of these in other posts, I am drawn back to a conversation that I had this very morning with a potential client who was wrestling with the ultimate question that will also be plaguing her (and many other executives) on Super Bowl Sunday: should I or should I not, in future, start getting involved in some of these types of advertising opportunities?
For that conversation, I directed her back to a number of fundamental questions that I believe are central to answer the question of ROI relating to a proposed advertising investment decision. These questions are:
- What is your goal, or objective? What does gold look like? And what is your organization defining “profit” as? Does “profit” mean building customer loyalty or strengthening current relationships? Is profit measured in terms of market share? Transactions? Number of likes? Number of share? And, if you choose one … why does it make sense?
- What channels will you measure or try to track when determining how much “profit” you have made from your investments into advertising?
- How will you collect and aggregate the data (from various sources) that you need to determine how successful your campaign has been? And since we are talking about social, do you have access to the right tools to be able to collect that data?
- How will that data ultimately be analyzed, reported against, and reviewed, internally? Why? Because understanding what you want the analysis to produce, is often just as important as what your strategic goals are.
Whatever your goals, whether it’s driving business through an award-winning Super Bowl ad or just adding a couple of new channels to your marketing mix, asking yourself these key questions will help guide you along the right path.