Marketing Return on Investment (ROI)

Pepsi just sent out a shot across the bow. It announced that they will not be advertising the Pepsi or Gatorade brands during the 2010 Super Bowl. Last year, Pepsi spent $33 million advertising their Pepsi, Gatorade and Frito-Lay brands during the game, $15 million of which was devoted to the Pepsi brand. Why the change? Not because times are tough and a 30-second spot will cost somewhere between $2.5 and $3.0 million. No, they just want to be more accountable and spend this money on their on-line presence in 2010. Madison Avenue must be a little concerned about this.

Years ago, measuring the return on investment from an advertising and marketing effort was near impossible. The closest that anyone could come to this was in measuring the percentage of coupons redeemed to those distributed. Direct mail could give a company some measure of response, but those numbers were usually quite small. So everyone measured the return on investment by how many times the commercials or ads were seen by how many people and ultimately by sales figures. Not very scientific.

Enter the internet. Not only is this a great medium to promote a business, but it gives great vital metrics in determining the success of the effort. Even direct mail response rates are enhanced by using the internet. The charge per click-thru perfected by Google is the ultimate measurement. SEO (search engine optimization) and SEM (search engine marketing) have become so important in getting the advertising message out. Direct mail response is enhanced by implementing a personalized url (purl) whereby the recipient is directed to a personal website by using an incentive for the visit such as a gift card. Once at the website, more information is captured from the customer and a dialogue is started. At AlphaGraphics, we have seen response rates up to 30% from a targeted direct mail campaign with an attached purl.

Under the SEO and SEM scenario, when a customer clicks through to a businesses landing page, that business can then capture additional statistics from that customer by using different email account addresses and by using a different phone number. Special phone numbers that are re-routed to a businesses main line and that provide a recording of the call can be obtained for less than $30 per month.

So when Pepsi decides to go on-line in 2010, I'm sure that a lot of the reasoning had to do with trying to justify the $15-$20 million spend. What better way to justify the spend than by having metrics showing the activity and the success of the spend. The Chief Marketing Officers (CMO) of a lot of companies are feeling the pressure to justify why their department's budgets should not be cut. Being able to show the customer activities on-line and the returns on the advertising purchases will go a long way. And, by the way, far more cheaper than those glossy TV ads.

You can reach us at AlphaGraphics at the following websites:

Mesa 535 W. Baseline Rd., Mesa, AZ 85210 480-844-2222
Tempe 720 W. Elliot Rd., Tempe, AZ 85284 480-413-1900
Phoenix 8041 N. Black Canyon Hwy, Phoenix, AZ 85021 602-234-2944

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