The ANA just posted a study showing that roughly 1/5 of the US economy is attributable to advertising . This includes both the direct effects - jobs in the ad and related industries - as well as indirect effects - jobs caused by impact of advertising. This seems like an incredibly large number. That said, over $300B is spent on advertising, and it has to do something. When asked by a panelist about how he's evaluated, the former CMO of McDonald's said simply "sales."
At TripleLift, we are at the intersection of advertising and technology. Yet much of the time we need that extra bump to take a step back to consider the advertiser's perspective. What are they trying to accomplish, and how do they view their success? I'd definitely recommend reading David Ogilvy's Ogilvy on Advertising. He founded and led an incredibly successful agency, and - along with Bill Bernbach and Leo Burnett, helped transform the industry. It's a little out-of-date, and was written before digital marketing even existed, but the important messages are still there.
Some key takeaways are:
- Not all advertising increases sales, but good advertising is probably more important to overall sales than the quality of the product (as long as the quality is sufficient)
- The brand image is hugely important, and defines positioning, demographics, etc - every ad should fit in with the brand image. Sometimes competing products are basically the same, in which case only the brand image and advertising will make a difference
- As long as an ad is good, keep running it until it stops having an impact
- Consider the cost to impact. If it's cheaper to run ads on TV late at night, and they sell more per dollar spent - then do that based on the marginal return of a dollar spent. Even if your objective is branding, you're still trying to drive sales, so this is true - the measurement is just more challenging.
- Direct response is very complicated, and a discipline itself, but A/B testing copy and images is incredibly important
For us to be successful as a business, we all need to "Own our piece, and know the puzzle." Understanding the marketer/agency perspective is hugely important. I'd love to hear other people's thoughts on this subject, and how our team can continue to be exposed to some fundamentals about this perspective.