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The Bottom Line of Advertising

If you will be guaranteed sales for spending X amount on advertising, would you take it? ROIs are sweet candy lures for advertisers to either increase their advertising budgets or for non-advertisers to take the plunge and invest on advertising.

We in the agency are often tempted to put our necks on the line, confident that we know how advertising can help in the success of a brand. It’s not even hard to believe since we see the biggest spenders also raking over the big sales. It has been proven time and again, with best practices from the biggest brands that advertising does help in boosting sales.

Too Good to be True?

Imagine a brand launching an advertising campaign with the highest share of voice, exposed in the most appropriate channels, with the most resonating TVC, represented by an endorser more credible than Kuya Kim and more popular than Kris Aquino. As if nothing could go wrong… you can almost promise that sales will suddenly shoot through the roof… or maybe not.

Sales shooting through the roof, is probably just a redundant metaphor of the agency shooting through its hat. But the seasoned marketer will be cautious, knowing that advertising is not the end all and be all of sales, nor can it claim a monopoly of influence over other relevant factors determining sales. Advertising is not the A-team that determines the rise and fall of sales. In fact, more often than not, there is an entire team or department responsible for it. In fact it can’t be more obvious because it’s called the sales department.

For Omnicom Media Group CEO, Nic Gabunada Jr. “…what we in advertising are responsible for, is the life of the brand and how it is presented to the consumers. Advertising is so much more complex than making a sales pitch.”

The Bottom Line

What must be revealed are the various links between sales and advertising, and it will greatly vary between categories and brands. These are variables that have the strongest correlation to sales like brand awareness, saliency, equity ownership, GRPs and others that serves as Key Performance Indicators (KPI) of the brand. This is the territory where advertising can be more deliberate in influencing the bottom line.

All of these Key Performance Indicators (KPI) can be measured if only there is commitment and diligence in collecting, analysing and updating the brand’s data bank, which can be the basis for the future direction of the brand and serve as a monitor to avert threat or identify opportunities.

The brand KPIs become the ROI currencies that marketing and advertising practitioners should put value on and commit to. By doing so, the burden of advertising for ROI is corrected and refocused on how the market is made to respond to the brand.

Dan Ryan Catalan is the research head of Omnicom Media Group Philippines.

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