Defining ROI
Of course, ROI literally translates as "Return On Investment". However, to different advertisers, the return is measured in different ways. Several years ago the Association of National Advertisers surveyed its membership seeking a common way to look at calculating ROI. Instead, it learned that:
- 78 percent said measuring sales impact from marketing was very difficult.
- 70 percent said gaining agreement on defining ROI is difficult.
Definitions and percentage of respondents included:
- Incremental sales revenue generated by marketing activities (66 percent)
- Changes in brand awareness (57)
- Total sales revenue generated by marketing activities (55)
- Changes in purchase intent (55)
- Changes in attitude toward the brand (51)
- Changes in market share (49)
- Number of leads generated (40)
- Ratio of advertising costs to sales revenue (34)
- Cost per lead generated (34)
- Reach / frequency achieved (30)
- Gross rating points delivered (25)
- Post-buy analysis comparing media plan to actual media delivery (21)
- Changes in financial value of brand equity (19)
- Increase in customer lifetime value (17).
Ten ways to improve your advertising ROI
Have a goal/plan. Yogi Berra once said that if you don't know where you're going, any road will take you there. Knowing what you want to accomplish may be half the battle in creating good advertising.
See your advertising from the customer perspective. Sometimes, we're too close to our business to understand how customers see our offerings. Are we making the point they want? Do they understand our language?
Include benefits, not features, in your advertising. What's in it for me? "Only $499.99" isn't as meaningful as "Save $50."
Sweat the details. Hours, locations and credit cards are small things we too often take for granted. Did we describe things correctly, include a picture? All the details make an ad effective.
Be strategic. If readers' eyes move top to bottom and left to right, consider that flow and what you place in every segment of your ad to optimize effectiveness.
Consider attention-getters. Creative use of white space, illustration/art and color tend to draw attention to your ad. Remember that readers decide very quickly, often in a second or two, whether to read your ad. What will make them stop and read it?
Be consistent. Remember that you'll get tired of your way of advertising sooner than your customers will. Try to be consistent with sizes, templates, type style, format, the day you run and brand. That way, people will see your ads as even more effective.
Time your ad properly. When do you want action taken as a result of your ad? When are people in your market paid? When do your customers read the paper? When do people most likely want you to be advertising?
Balance frequency with your budget. Very few people are in the market for your goods and services at any particular moment. The more often and more widely you cast your net, balanced against fishing where the fish are and your budget, the better off you are.
Track what works for you. The more you measure results of your ads, the more likely you are to repeat successfully what has worked in the past. Measure sales, coupons and image, but try to do more than anecdotally get a gut feel for how your ads are working.
Source: The Great AdVenture: How to Succeed in Newspaper Advertising Sales, Version 3.0; Newspaper Association of America
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