By Ron Mulliken, Vice President of Sales, Marchex Digital Call Marketplace
Famous American retailer John Wanamaker, who pioneered the concept of the department store more than a century ago, once said this about advertising: “Half of the money I spend on advertising is wasted; trouble is, I don’t know which half.”
Mr. Wanamaker invested in what I call “hope advertising.” It’s where you pay for advertising campaigns that may work – or may not.
You get no real, measurable results on customer conversions. You get no data on how many people called up your business and wanted to buy something after seeing your ad. Mr. Wanamaker had no choice but to invest in hope advertising.
Trouble is, a lot of brands still advertise this way today.
Here at Marchex, we say forget hope. We say focus, instead, on tangible, data-driven results.
In two words – Advertising Performance.
Today, brands must demand performance from their ad dollars. Their future growth depends on it.
Consider these three key factors:
- Mobile advertising investment is rising.
- Data technology is allowing greater transparency into ad performance.
- Brands are demanding greater ad performance metrics and often tie CEO compensation to these results.
Performance metrics are used to evaluate pretty much anything these days. (Did you hear about Pope Benedict XVI’s less-than-stellar Klout score?)
The point is that we expect performance. From CEOs. From sports teams. Heck, I even expect performance from my Sonicare toothbrush.
And yet, think of how much money is spent on advertising campaigns with no metric in sight to determine whether these campaigns actually perform the task at hand – generating new customers. This is especially true with advertising’s new shiny object– mobile display. (Check out Marchex’s white paper on the poor returns of mobile display, aka banner ads.)
Earlier this year, the CMO Council released findings from a study on mobile advertising. The results are telling:
- 78% of US brands that are investing in mobile advertising are doing so without any clear metrics of success.
- 16% of advertisers have no mobile strategy
- 14% of mobile advertisers are satisfied (presumably the rest are not)
In this era of tighter ad budgets, “hope advertising” must die. Brands need return. The days of sitting back, investing money, and hoping for good outcomes are over.
There are alternatives. Take a look at mobile performance providers. Make each precious ad dollar pay for itself and then some.
Mr. Wanamaker would have been shouting this from his department store rooftops.