How Do You Measure your Advertising Spend?
| Published date | 01 July 1981 |
| DOI | https://doi.org/10.1108/eb057201 |
| Date | 01 July 1981 |
| Pages | 23-25 |
| Author | Adam Knowles |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
How Do You Measure
your Advertising Spend?
by Adam Knowles, MA, MIPA, MlnstM
The fifth in our series of articles covering
the major aspects of industrial advertising
and marketing by Adam Knowles
What is your advertising expenditure trying to do? Will it
be worth it? Will it succeed?
For some of the time over the last decade or so it has
been accepted by industrial marketing men that there
are valuable lessons to be learned from their consumer
colleagues. Thus, we have seen a remarkable improve-
ment in the standards of industrial advertising, packag-
ing and communication. There is a lot to be done even
in these areas, and the prize will go to the people first to
do it - but the area of research in all its forms seems to
be the Cinderella.
There is a triplet of reasons: first, the primary differ-
ence between consumer and industrial marketing is that
in the latter area you are usually in direct contact with
the customer at least at some level, rather than dealing
at arm's length with a bunch of distant statistics. Sec-
ondly, industrial markets are numerically, in terms of
numbers of people rather than value, very much smaller
- the "average Mum syndrome" so beloved of mass
marketeers doesn't apply. And thirdly, of course, the
percentage of an industrial company's money that is
spent on direct and indirect advertising is very much
smaller than that for their cousins in consumer durable
and perishable fields.
The "average Mum syndrome" so
beloved of mass marketeers
doesn't apply
This creates an understandable, but dangerous series
of reactions to the expenditure of time or money on
industrial market or advertising research. The natural
response of many manufacturers to the above is to say
"because we deal with our market face-to-face, we
know exactly what they want already and don't need
research to tell us." Or "because there are so few
(relatively) people who will buy our product and
because they are so scattered geographically and by
industry, that research measures would be impossibly
expensive." Or, finally, "we aren't really spending
enough on advertising to make it viable to spend even
more finding out if it works - after all, the sales force
will let us know." All of which is a pity.
How do you think that the highly competitive indus-
trialists of the US, Japan and West Germany have
succeeded - succeeded on our home ground? It isn't by
any means always dumping, or better products, or
impossibly cheap labour, or the crippling effect of the
stronger pound on our exports, or any of the glib
excuses that get trotted out in too many company
reports. Not always it isn't, not all the time.
The ruthless determination to ensure
that before a penny is spent on
advertising it's going to have
a chance to work
Much of it has to do with measurement, with the
ruthless determination to ensure that before a penny is
spent on advertising it's going to have a chance to work.
This does not mean heavy research costs, but more
accurate and logical thinking time and analysis. The
research and marketing budgets of the blue chip indus-
trial groupings in the UK may not be available to us all,
but the disciplines of thinking jolly well are - so use
them!
There are, basically, three areas in which measure-
ment is not only possible but worthwhile. These are:
measurement/assessment of a problem; measurement/
evaluation of the solution to that problem, and the
measurement/analysis of the results of applying the
tested solution.
Let's take these one by one.
Measuring the Problem
At its simplest, the first questions that need to be
answered by any industrial company are four: Is the
product any good? Who wants it, and why? Where are
they? What other choice do they have? Only when these
are answered can you begin to make sure that your
advertising is likely to be saying the right things to the
right people in the right places. The achievement of
usable answers isn't expensive - it just needs thinking
about.
It may seem to be both unnecessary and offensive to
ask a manufacturing company "Is the product any
good"? - but put yourself into the mind and situation of
the potential purchaser, and look at his problem. Unless
you are careful, he has solution options in front of him
which don't even include your name on the long list, let
alone the short one for tender, and your competitor
lands the contract.
"Who want it"? Looks pretty obvious and I am sure
that you think you know the answer - but ask the
JULY/AUGUST 1981 23
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