A recent Advertising Age article indicated that major consumer package goods companies have talked about the importance of ROI, but their agreements with their ad agencies rarely have any “pay for performance” clauses. Is all this talk about using ROI in advertising and communications just talk?
For years we have heard its importance, but the only segment of the marketing business that actually has an understanding about how to measure it is the direct marketing business. Catalogers know what they spend on printing, mailing, and other aspects of their investment, and they are fairly good at measuring what incremental business they get from their initiatives beyond what would be the normal course of business. What’s the ROI of a brochure? A flyer? A sign? A poster?
The ROI mantra is justifies the size of communications budgets, and that budget allocation. Is it meaningful if no one is basing payment on it? Why is it that there is such dissatisfaction reported by executives about their abilities to understand communications spending? Does ROI matter in the way we think it does?
See full article at: Does ROI Miss the Mark? Is ROT Better? – http://blogs.whattheythink.com/economics.
