To Know Your ROI, You Need to Know What You’re Doing

As a frequent attendee of local marketing association events, I’m perplexed by the prevalence of sessions that focus on things like the best use of Google AdWords, rather than on the important work of aligning a campaign’s goals and metrics with that of the corporation as a whole. The days of such practices operating in silos are numbered, to say the least.

The old adage is true—if you don’t know where you’re going, how will you ever get there? Good campaigns focus on developing strong, creative and powerful messages that generate expected, desired and measurable calls to action. This is where many advertising agencies fall short. Determining the success or failure of a campaign must be based upon a clearly defined set of quantifiable and relevant business objectives.

A Business Leader First, A Marketing Expert Second
In effectively measuring the value of campaigns, advertising firms must recognize that they are business managers first and marketing professionals second. Before any tactical initiatives are drafted, the account team—or what should be more appropriately called the business management team—must thoroughly understand their clients’ plan for the initiative in question, such as a product or service launch. Secondly, the agency must have a working knowledge of the established goals for their counterparts in sales, product management and other relevant areas. This is critical; only by understanding each business unit’s objectives will marketing firms be able to align programs and resources to support its goals.

Agencies need to realize that they should not be managing an account, but rather leading a business unit based on a clear set of measurable, metric-oriented expectations. Gone are the days of account executives who maintain a short-sighted eye on maximizing the agency’s revenue. Instead, advertising firms must embrace a future where they leverage readily-available data to achieve ROI-oriented results for clients.

To do this, agencies must be aware of how their clients’ executive teams measure both success and ROI. Sales may be the most frequent answer, but other aspects such as profit margins, distribution and technology partner agreements, investor interest, rate of customer acquisition, strategic product roadmap, and average sale price per customer may also be key.

Advertising firms will fail to realize true success if their evaluation differs—or worst case contradicts—the criteria of the organization as a whole.

Align Your Promotion Campaigns Accordingly
With the business goals identified and understood, most agencies will create tailored messaging for each audience segment. That’s no surprise. However, many will stop at just understanding the unique communication barriers for each group, rather than what will get the desired response. For a campaign to reach its strategic goals, agencies must understand the interdependencies of each stakeholder group—such as decision makers, influencers and end users—and how their organization can solve specific problems or needs, and get customers engaged in the discussion.

Change For The Better
Advertising firms that embrace the need for their efforts to be measured based on their impact to a company’s business goals will realize greater client acquisition, retention and referral rates. Moreover, agencies will also find themselves spending more time in the strategic service of their organizations, and less time explaining its value. In essence, advertising firms can commit to achieving results that matter—and reap the rewards as a result.

Reid Carr is president of Red Door Interactive, San Diego.