Measuring Marketing

February 26, 2007
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As a general rule, companies today are seeking ways to become leaner and more efficient, and marketing efforts have not been immune to those concerns. In Michigan especially, where many companies are shelving growth initiatives in favor of productivity efforts, finding ways to justify marketing buys has become a critical concern for the industry.

“Marketing has traditionally been one of those areas where people spend money because they think they need to spend money,” said Galen De Young, managing partner of Francis Marketing in Grand Rapids. “It has fallen under scrutiny because every other part of business is now more scrutinized.”

Allen Crater, president of Stevens Advertising in Grand Rapids, believes the largest problem facing the marketing industry is represented by programs such as the Ad Club’s ADDY Awards and dozens of other contests that recognize the creative value of marketing.

“I’m not in the art business,” he said. “You get a lot of agencies out there talking about how many awards they’ve won but not a lot talking about how they’ve helped their clients’ business,” Crater said. “I think there is truly a shift in wanting more ROI accountability in marketing programs, but nothing in the industry awards that.”

Compared to many of its peers, he said, Stevens Advertising has a backward approach. Before discussing any creative work or concepts with the client, it determines what the goals of the campaign or marketing device will be, and how those will be measured. The actual marketing piece is developed around those metrics.

An example of this is a recent campaign for Saint Mary’s Health Care. The goal of the campaign was to shift the brand perception of the institution, to be measured through a longitudinal study of “aware non-tryers” — those who know of the organization but don’t use it. The success of the campaign would be determined by the responses of that group.

Bob Milroy, president of Alexander Marketing Services, said that proprietary research such as the Saint Mary’s study is the best way to track marketing results. These determine what effects the campaign had in the market. Did it create leads? Did it enhance the brand? Did it produce sales? Or did it create excitement for the sector and create sales for competitors?

Independent Bank Corp. has implemented a benchmark study as part of its 2007 marketing campaign, according to Vice President of Corporate Marketing Shelby Reno. A total of 1,200 residents in the bank’s five-county area were surveyed last month. In 12 months, the survey will be repeated.

For most businesses, however, such studies are not cost-effective and other metrics must be found. The vast majority of advertising pieces produced in the local market now include some measurable call to action, such as a coupon, Web site or phone number. It helps if the phone numbers and Web sites are unique to the advertisement, Milroy said, so normal traffic can be distinguished from that of the campaign.

“We used to do a lot of top-of-mind branding stuff,” said Tom Kuiper, president of Captive Audience Advertising in Grand Haven. “Now it’s offers to drive traffic where they can see the results.”

 Captive Audience specializes in what is commonly known as “guerilla marketing,” a school of advertising that seeks new and unusual touch-points for clients. Its core offerings are gas-pump billboards and a fleet of mobile billboards. Kuiper is skeptical that consumers can remember calls-to-action among the thousands of corporate messages people digest every day. But he still needed to find a way to prove to customers that his advertising was effective.

For the Victories Casino in Petoskey, Kuiper developed a gas pump billboard promotion that would provide patrons $5 at the casino door in exchange for a receipt from the gas station. The large number of receipts turned in at the casino proved the campaign’s effectiveness.

With even the most sophisticated metrics, however, there is no strong correlation between marketing and sales. And with C-level executives more likely to have finance, manufacturing or operations backgrounds, justifying marketing becomes an increasingly difficult task.

“Without the background, they are very suspicious of the marketing spend,” said Milroy. “They want to see some financial-based justification. It’s not good enough to just have a 12 percent rise in awareness or a 4 percent rise in preference.”

This puts Alexander Marketing in a unique situation, as virtually all of its clients sell through a dealer network or catalog. Most of the region’s business-to-business marketers face a similar problem, as their efforts rely largely on the actions of others.

“We’re dependent on the sales people to follow through,” said Francis Marketing’s De Young, noting that there are infinite considerations that can warp a marketing campaign.

Even the example presented by public relations consultant Jeff Lambert of Lambert Edwards & Associates — that sales of certain Zondervan books increased in the days following news coverage involving the books — has some room for argument.

“Did marketing activity drive that? Or was it simply sales activity?” asked Milroy.

Ironically, Internet marketing, with its search and click-through analytics, has made it more difficult to track marketing results. Customers now have the ability to learn practically everything there is to know about a product through a company’s Web site, and many times, without even visiting the corporate Web site.

“You have to do research to have any idea where they really came from,” Milroy said. 

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