THE NOT-SO-SECRET ADVERTISING RATIO EVERY MARKETER SHOULD KNOW
Over the past decade, advertising has become incredibly efficient due to adtech, data and online targeting. Unfortunately, that efficiency has also come at a very high price. Advertising effectiveness overall is down almost 50%. A recent study by Les Binet shows one of the biggest culprits behind lackluster ad performance is the massive shift from long-term emotional ads to short-term sales driven ads.
Despite claims to the contrary, studies show (here & here) online sales activation advertising alone is not very effective. Here's why. There are two types of marketing campaigns every consumer-facing brand must run to maximize advertising ROI:
Brand Building - delivers long-term growth and margins
Sales Activation - delivers short-term sales volume
While online sales activation is really efficient at harvesting demand, traditional brand building is much, much better at growing demand. Instead of attracting more, newer buyers, sales activation tends to target those who are likely to buy anyway. Without an investment in brand growth through long-term, mass targeted, emotional driven marketing, sales activation tactics will never reap the harvest they should. What's more, Binet's study found traditional media such as TV, print, outdoor and radio are all gaining in effectiveness.
The other big finding is that attribution models tend to credit online channels for sales at the expense of media channels that are not easily tracked. This in turn, fuels an unhealthy cycle where more and more money is pumped into ineffective online sales activation instead of more effective offline channels.
So what's the magic ratio to maximize advertising ROI? The evidence reveals, the optimum ratio for most consumer brands is 75% long-term brand building to 25% short-term sales activation. This, by the way, is supported by the Advertising Research Foundation which found the optimal media mix for maximizing advertising effectiveness for most businesses is 78% traditional and 22% online. If your advertising spend is skewed too much towards online, short-term sales activation versus long-term, mass marketed, emotional brand building, you're leaving big money on the table.
When you're ready to maximize your advertising ROI with work designed to outsmart, outdo and outlast your rivals, we're ready to help. For a free consultation, please fell free to contact me directly.
David Smith | Founder & Creative Leader
919.667.3717: c | 919.969.7500 ext. 3717: o
Immortology is a full-service agency specializing in creating legendary creative and strategic solutions that help our clients outsmart, outdo and outlast – not outspend – their competitors. Our secret? We help companies find their true calling and align it with their customers’ true wants and needs in ways their rivals can’t or won’t. Then we unleash it through unforgettable brand experiences that interest and entertain their customers, rally their employees and strike fear into the hearts of their enemies for years to come.
About David Smith
Over the past two decades, David has been the creative force behind some of the world’s most memorable and successful ads. His campaigns have been covered by the NY Times, Adweek, Ad Age, Time, The Wall Street Journal, LA Times and Media Week. Shows such as Entertainment Tonight, Access Hollywood, Inside Edition, CMT and CNN/FN have featured his work. The 4A’s recognized his movement, “Stop The Adness” as the “most transformative idea of 2011”. His campaign for Smirnoff Ice was the most successful product launch in United Distillers and Vintners’ history and his Lipton Brisk campaign has been included in the Museum of Modern Art’s permanent collection. Over 60 million people have viewed his videos for Triumph Boats worldwide.