Branding and ROI, Mutually Exclusive?

  • by , Featured Contributor, September 28, 2006

In the old days of advertising and marketing, people that did branding and people that focused on ROI were polar opposites. They lived on different ends of the world. The former were in the high end of the advertising world, where it was all about sizzle and premium traditional media environments, the latter were in the less glamorous direct marketing world, where it was all numbers, postal rates, telesales and the business of managing lists. Their two worlds couldn't have been more different. The former hung out in glitzy, high visibility places like New York, Chicago and Los Angeles, the latter in more remote, subdued locales, with cheaper real estate, labor and data geeks--places like Central Florida.

Most importantly, brand advertisers cared little about measurable sales and ROI. For direct marketers, that was all that they cared about.

No more. These days, all marketers want measurable results related to sales objectives from their advertising and marketing expenditures, particularly online. A big part of this has certainly been driven by the fact that a large portion of early online advertisers were direct marketers. Many think that this focus on measurability will go away as more and more of the traditional brand advertisers show up online. I don't think that will happen. All online advertisers, including those for whom branding is the primary objective, will want more and more ROI measurability. Why do I believe that?



  • Inertia requires it. Online ad budgets have to come from somewhere, and something extra is going to be needed to move it. Traditional media are notoriously bad at ROI metrics, so online buyers will look for better measurability there to justify moving the money.

  • Sales channels and marketing are becoming more integrated. As the clients' businesses become more integrated and measurable, so must all of their advertising, irrespective of whether it is branding or promotional.

  • The corporate game is changing. Sarbanes-Oxley is the new law of the land, and auditors must certify it. They understand numbers, not emotions. They don't care much about the difference between branding and direct response, and they certainly don't understand (or approve) of the fact that branding campaigns frequently bring with them tickets to the Super Bowl or Cannes.

  • All media buying is becoming more sophisticated. The reorganization of the media departments into media agencies has brought much more specialization and sophistication and scale to the business. They can now afford and use technologies that can measure things that were only dreamed of before. Their businesses run on very tight margins, so ROI metrics are super critical to them.

  • Competition. Publishers are creating and integrating their own proprietary measurement tools and data as competitive differentiators. Many of these are able to deliver detailed ROI metrics. Keeping up with the Joneses--and their order flow--will do much to drive this market.

  • Because you can. Online advertising is measurable, and systems now permit high degrees of post-impression sales measurement. Many brand buyers will want it, just because it is available and of interest to them and their clients.

It's no longer a black and white world of branding and direct marketing. The future, I think, will be much grayer, as branding takes on ROI characteristics, and direct marketing, likewise, will probably take on elements of brand advertising. Whatever the outcome, ROI and measurable sales results are here to stay. Branding and ROI are certainly not mutually exclusive anymore.

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