By Peter Lyle DeHaan, PhD
There is a troubling trend in advertising; it is making ad buys based strictly on ROI (return on investment) calculations.
This tendency began in earnest with online advertising, which provides readily available performance data, such as impressions, clicks, and leads. Soon, advertisers were justifying ad buys solely using cost-per-click or cost-per-lead calculations – and forgetting the big picture of effective marketing.
For many forms of advertising, performance metrics are not available, so ROI calculations are non-existent or mere guesses. Lacking firm ROI numbers, some shortsighted advertisers are bypassing viable opportunities, such as print, thinking that they are making a wise and informed decision in doing so.
Most advertising builds brand awareness, but does little to generate immediate sales. So even if a unique phone number, email address, or landing page is included to measure response, it won’t matter.
Ads that lack a clear call to action will have no action to measure. Branding ads pave the way to future sales, future goodwill, and future top-of-mind awareness. But that is hard to measure and takes a long time to realize.
Marketers who seek instant gratification may opt to rely on ROI to make decisions. However, those who want to be around for a long time, need to invest in branding efforts today in order to enjoy the rewards of increased sales tomorrow.
The long term success for the marketer, their company, and their brand cannot survive solely on ROI-driven media buys.
Peter Lyle DeHaan is an entrepreneur and businessman who has managed, owned, and started multiple businesses over his career. Common themes at every turn have included customer service, sales and marketing, and leadership and management.
He shares his lifetime of business experience and personal insights through his books to encourage, inspire, and occasionally entertain.