What Are You REALLY Getting From Your Advertising?

I have thoroughly enjoyed my time so far studying marketing and advertising here at school and it is the field that I want to build a career on someday. Learning the ins and outs of what lies behind truly great advertising and marketing strategies is rewarding and extrememly beneficial to me. I stumbled across an article on The Brand Builder Blog the other day and I had to share what I read. The article was about Proctor and Gamble (P&G) and how they are being pressured by shareholders to look deeply into their advertising behaviors due to recent sub-par quarterly numbers. P&G CEO, Bob McDonald's seat is 'heating up" as a result and is forced to find a cause, or more importantly a remedy, for the current situation. P&G is the world's largest marketer and the recent spending on advertising mixed with a decline in sales is making a lot of people unhappy; not to mention the 1,600 employees that have been laid off. The article is lengthy but there were some amazing and thought-provoking realities that were adressed.

The whole article revolved around the concept of advertising and marketing budgets vs. their ROI in terms of sales. In the monster of a trend that is social media, ROI for advertising and marketing camaigns are not being measured by "likes," "tweets," "follows," or "shares." No. P&G's main problem is that these ads and strategies are not resulting in increased sales. The article claims that so many of today's advertising goals have drifted away from the elementary goal of increasing sales and is now more concerned with public perceptions and making as many "impressions" on consumers as possible. This simply is not good enough, especially by a goliath company such as P&G. It needs sales and lots of them. P&G's "spend more, sell more" approach to advertising has gotten them in trouble, although this concept is not without some past merit, it cannot be applied across all landscapes. For example, in just the past two years, P&G's ad spend budget increased by 24%, which is great but how much of an increase in sales to you think P&G experienced? Double digits? Nope. As a result of the increase in spending, P&G saw only a 6% increase in sales.

It is more clear today than ever before that communications channels have changed, along with technology. Consumers have access to more information than ever before and are more informed and smarter than any time in history. Now, P&G has obviously had success in the past when dealing with these extreme cultural shifts. Just look at the success of the Old Spice advertisements through viral videos and word of mouth, for example. Success can obtained, it's just a matter of finding the formula for consistency.

Back to the concept of impressions vs. sales, which is at the root of P&G's issues in my opinion. The article deciphered the two concepts perfectly:  "Impressions are not transactions. Sharing content isn't buying...Stick to numbers that matter:  Spend and sales." While impressions and perceptions are extremely important to establish and use to build equity for a company, they are not the necessary metrics on which to assess success of advertising. Sales is. Lastly, the article illustrated a scenario that really drove home the main idea:  Which campaign would you rather choose?

Campaign A - Cost:  $2,000,000. Revenue:  $20,000,000
Campaign B - Cost:  $50,000.  Revenue:  $20,000,000
Campaign C - Cost:  $50,000. Impressions:  100,000.  Revenue:  unknown.

Ask yourself which on of these campaigns you would hang your career on come reporting time?