WHAT WE DO  PORTFOLIO  ABOUT US  MARKETING NEWS   Press Releases   Articles   BLOG  CONTACT US Survey: Network TV Does Worst Job of Proving Advertising ROI Marketing Professionals Say Direct Mail Does No. 1 Job; Internet No. 2 By Judann Pollack Published: October 9, 2003 NEW YORK (AdAge.com) -- Media advertising does the worst job of any marketing discipline in proving return on investment and network TV is the worst of those media, according to an exclusive survey of leading advertisers. Direct marketing topped the list of disciplines as best for ROI, while direct mail was cited as most accountable. The Advertising Age study, conducted by WPP Group's Lightspeed Research with the support of the Association of National Advertisers, was unveiled at ANA's annual meeting last week. In all, 222 marketing professionals filled out the online survey, which has a confidence level of plus or minus 6.6%. Public relations Media advertising was cited by more than one in four respondents as the worst for proving ROI, followed by public relations, at 25%. Product placement was third with 13%. The top media offender was network TV. Despite inventory sellouts and spiraling rates during the recent upfront, it was chosen by 32% of respondents as the worst medium for proving ROI. Non-network TV was seen in a better light; cable was cited by only 5% of respondents as doing the worst job of proving ROI, while spot TV was chosen by 3% and syndicated TV by 2%. Larger spenders are more likely to blast network TV; 44% of advertisers with budgets over $100 million ranked it as the worst medium. Least favored after network TV for proving ROI was out-of-home advertising (cited by 14%), followed by Internet and radio (8% each), then newspapers and magazines (7% each). Second best: the Internet Overwhelmingly seen as best medium for proving ROI is direct mail, cited by 42% of respondents, more than a 2-to-1 ratio over the second-best medium, the Internet, at 19%. No other media discipline was cited by more than one in ten respondents. The survey found that marketing ROI is unmistakably gaining traction among advertisers. An outstanding 73% of respondents said advertising and marketing functions at their companies are held to the same or higher level of accountability as other corporate functions. Investment or expense? Four out of five, or 84%, said they view advertising and marketing as an investment rather than a corporate expense. But there is a perceived schism with upper management: Nearly half, 49%, believe their CEO views advertising and marketing as an expense. Their perception might not match reality. Only 26% of respondents identifying themselves as CEOs cited advertising as an expense, while 70% said they viewed it as an investment. Another 4% held some other, unidentified view. Marketers largely hold themselves accountable for measuring ROI, with 78% saying it is their responsibility, not the responsibility of agencies or media sellers. Interestingly, only one-third of respondents said they involve purchasing agents or procurement officers in the marketing process. But advertisers with larger budgets are more likely to do so: 57% of those with a $100 million-plus marketing budget said they include procurement in the process. Sales growth is the best definition of a successful return on investment, 76% said. Market-share growth was named by 61%, while increased brand awareness was cited by 55% as a measure of ROI success. Unhappy with measurement tools Two of three respondents said the current measurement tools are inadequate to prove ROI, with larger marketers tending to express more dissatisfaction than smaller ones. A full 73% of respondents with sales between $100 million and $1 billion felt there aren't adequate measurement tools available. Among those with budgets less than $10 million, 65% felt the tools were less than adequate. Respondents listed various tools they said would be valuable to them in determining ROI, including ongoing tracking data, Web-based analytics, segmentation information, market research on brand equity and methods to assess lifetime value of customers. CEOs were more likely to see agencies as most responsible for proving and measuring ROI. Thirty-three percent of CEOs said shops should prove ROI, compared to only 4% of chief marketing officers. But the survey also shows that advertisers doubt the willingness of agencies, media sellers and marketing vendors to be held accountable for ROI. Media sellers were cited by 64% of respondents as unwilling to do so and marketing vendors by more than half, 52%. Agencies were said by 65% of respondents to be resistant to having their work held up to the corporate ROI goals of their clients. Perhaps because of this, few marketers base their agency compensation on that measure. Eighty-three percent said they don't pay shops and marketing vendors based on ROI results. Accountability, not art While some agencies have long complained that a single-minded focus on ROI can stifle creativity, marketers are of a different mind. Sixty-four percent of respondents somewhat or strongly disagreed with the statement, "Accountability is less important for advertising and marketing because it is as much an art as a science." Only 19% strongly agreed with that statement. Likewise, those with the heftiest sales, more than $1 billion, maintain that a strong focus on ROI does not impede creativity and innovation in marketing and advertising. That sentiment held for newer forms of marketing such as long-form commercial content, which marketers said should be held to the same standards as more established marketing methods. Experimental ad forms In all, 74% of respondents said experimental ad forms should be held to the same ROI standards as more established ad forms. Marketers with $1 billion or more in sales tended to hold that belief the strongest (83%), along with those commanding budgets exceeding $100 million (82%). Thirty percent of marketers with sales below $100 million said that experimental ad forms need not be held to the same ROI standards. One thing was clear in the survey: ROI is not a fleeting phenomenon born of economic recession. Seventy percent said ROI represents a long-term change in how they do business. article list: Confusing Spin With Strategy - Patrick Di Chiro Coffee's For Closers - Patrick Di Chiro An Open Letter To Al Ries, Ad Age Columnist Here's Where to Find Integrated Marketing - AdAge Getting a Bead on 'Buzz' - Virginia Postrel Survey: Network TV Does Worst Job of Proving Advertising ROI - Judann Pollack Toughening Your Brand - Lynn Upshaw Playing the Search-Engine Game -Mylene Mangalindan, WSJ At Last, a Way to Measure Ads, - Michael Totty, WSJ Small Firms Can Survive Sqeeze By Revamping Marketing Efforts - Jeff Bailey, WSJ Study Says Marketers Shifting Toward Internet, Direct Mail - Erin White, WSJ PORTFOLIO   |   HOME   |   CONTACT   |   PRIVACY