Imagine spending a couple of million dollars and not even feeling sure you‘re getting a bang for your buck. That‘s the frustration most advertisers reported in a survey sponsored by a research company selling a tool designed to help companies learn if they are spending their marketing budgets in the most effective manner.
Marketing Management Analytics (MMA), a Wilton, CT-based consultancy, reported that 87% of the 135 respondents felt little confidence that they could measure in a precise fashion what their return was from their marketing investment.
In fact, only 40% of respondents said that, if faced with a 10% budget cut, they would be able to predict how that would affect sales. And for the remaining 60% of respondents, says Doug Brooks, MMA’s director of marketing and product development, that could provide their company’s moneymen with the fuel they need to cut budgets. If chief marketing officers can’t quantify the top-line results of a 10% budget cut, says Brooks, their chief financial officers “will take 20%.”
MMA is in the process of rolling out Avista, a program that it says will not only help marketers measure the effective return on investment of their ad budget but will also help manage their spending plans as circumstances change throughout the year.
To counter skepticism about the timing and conclusion of the survey, MMA commissioned Forrester Research to perform the study along with the Association of National Advertisers. “They ran the study,” says Doug Brooks, MMA’s director of marketing and product development. “Forrester took the data and did all the data manipulation. We sponsored the survey.” MMA is not the only company selling this sort of analytical tool. Chicago’s Information Resources Inc. (IRI) and the Hudson River Group of Valhalla, NY, are among companies that chart and recommend adjustments in a company’s media mix.
MMA, however, says that its study demonstrates vividly how acute companies’ needs are and how much top-level executives are calling on marketers to account for their spending. “They’re not only getting pressure internally, but externally as well, as the mix of marketing options continue to grow,” Brooks says. “You have marketers not only having to quantify what they get for TV spending but being forced to quantify how [their return] for online or product placement. Most can’t do that.”
Brooks says that Avista “takes mixed marketing models and integrates them with real-time data updates and puts a tool, a ‘what if’ tool – ‘what if the budget is 10% greater; what would the sales impact be?’—to create scenarios.”
Following its limited release earlier this year, MMA will officially roll out Avista in July, Brooks says.
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