Accountable Advertising Will Scare You Into the Right Direction

Written By Ted Grigg
DMCG Results

I've seen numerous reports lauding the sales effectiveness of unaided awareness and positioning advertising. Unfortunately these reports do not contain a smidgeon of evidence that the advertising efforts actually increased sales. And even if they provide anecdotal evidence that sales do increase with their advertising, the "evidence" is at best anecdotal.

In fact, such reports usually ignore sales as an objective replacing them with subjective objectives that have little to do with increasing sales. They make no pretence that their efforts yielded sales sufficiently to justify their astronomical budgets.

What would have happened in the same markets if they had done nothing? The results might surprise us.

External events and other activities that have little to do with advertising may affect sales for more than assumed by many. What's worse, these external influences are often unpredictable and difficult to identify.

In the direct marketing arena, we have actually run matched markets withholding advertising in some markets (making them control markets) and compared them to sales in markets where there was advertising activity. Many times, the sales increases occur at nearly the same levels whether we advertise there or not!

For example, when promoting to a three million-name database of past customers for one of my clients, we would run a random select of all names and withhold mailing to a part of the names. Often we saw little difference between those who got the mailings and those who did not.

We might get a 1.6% response on those mailed and a 1.2% on those not mailed. We then had to evaluate the cost for improving the response between those two numbers amounting to .4% response.

If the financials did not justify the mailings to certain segments, then we would cease mailing to them.

Branding should undergo the same rigors to validate budget increases, budget reductions or even budget elimination. Unfortunately, reliable measurement tools for doing this precisely are either not used, not supported or non-existent in most organizations.

So general awareness or positioning advertising has to find a more reliable way to evaluate its effectiveness when competing for dollars against other communications strategies such as PR, sales promotions and direct marketing.

Ted Grigg

Ted Grigg is a direct response strategist who helps growth-focused companies reduce risk by identifying weak assumptions before they become costly mistakes.

Over the course of his career, Ted has evaluated several hundred million dollars in direct response testing across direct mail, digital, print, television, telephone, and other channels. His work combines direct response strategy, acquisition economics, customer analysis, creative evaluation, offer development, and disciplined testing.

Ted has worked on both the client and agency sides of the business. That experience gives him a practical understanding of the pressures facing executives, marketing teams, agencies, and service providers—and of the problems that arise when activity, media volume, or creative preference replaces a clear economic objective.

His consulting work helps organizations examine such questions as:

  • Are acquisition goals economically realistic?

  • Is the allowable Cost Per Sale supported by customer value?

  • Are targeting, offers, creative, media, and response paths working together?

  • Are tests structured to produce reliable business decisions?

  • Are unproven assumptions being treated as facts?

  • Is the organization measuring sales outcomes rather than convenient proxies?

Ted’s experience includes the development of direct mail and multichannel acquisition programs for insurance, healthcare, financial services, technology, nonprofit, manufacturing, retail, transportation, communications, government, and business-to-business organizations.

For a national direct-to-consumer insurance company, he developed a direct mail format that defeated established controls and helped expand the productive use of compiled prospect lists from less than 10 percent to more than 30 percent of total direct mail circulation within one year. He also planned Medicare lead-generation programs for more than 60 regional and national HMO and PPO organizations, with some programs exceeding sales projections by as much as 60 percent.

Ted founded Wyse Direct, a direct marketing division of Wyse Advertising in Cleveland, where he developed acquisition programs and helped launch a new technology product for Seiko Instruments by generating a predictable flow of qualified sales leads for its national sales organization. As vice president of new business development for the Grizzard Agency, he helped broaden the agency’s strategic capabilities and pursue new commercial and fundraising opportunities.

He is the author of The HMO/PPO Marketing Plan—A Step-by-Step Guide, published by Executive Enterprises, and has written numerous articles and conducted webinars on direct response strategy, testing, creative development, and marketing economics.

Ted earned a Bachelor of Arts degree from Abilene Christian University and completed two years of graduate study at Texas Tech University. He is the founder of DMCG, LLC.

http://www.dmcgresults.com
Previous

Direct Mail Lead Generation Response Rates Can Deceive Marketers
Next

Does Strategic Vision Confuse Marketers?