“I know that half the money I spend on advertising is wasted. The problem is, I don’t know which half.”
This succinct resume of the advertiser’s dilemma is often attributed to John Wanamaker, the department store pioneer. Some people prefer to give the credit to Henry Ford, the automobile pioneer, or other favorite business giants. Whoever said it first, it is certain that it has been said thousand and thousand of times since.
The significance of the observation is nothing short of astounding. These are people whose business is investing and harvesting financial assets, yet when it comes to advertising, they freely admit to wasting at least half of their money!
But the observation can be turned on its head. Viewed from this perspective, it means that these same extremely clever and resourceful marketers believe that the power of advertising is so great, even at only 50% effectiveness they still get their money’s worth. This is equally astounding!
The value of advertising can most easily be seen with mass marketed products. For example, a breakfast cereal launches a major advertising campaign; within a few days to weeks the sales figures will reflect the impact of the campaign. With technical and industrial products, the picture is not quite so clear. Few people buy a car or a piece of industrial equipment on impulse. They build up to it over a long period of time, so that the cause-and-effect relationship between advertising and sales is virtually impossible to evaluate.
Nevertheless, advertising is indispensable. So the question is, can you construct advertising campaigns that will assure the best return on investment (ROI), even when that return cannot be directly measured?
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