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May 7, 2008
It’s Not What You Spend, It’s How You Spend It

Show me a client who doesn’t care about results, and I’ll show you someone who’s looking for a job.

No doubt about it, clients deserve to have some means of knowing whether their marketing/advertising investment is working, and what impact it has. But which means of measurement is best?

It’s a tough call. While there are various metrics out there, not all are accurate, and not all are worthwhile. A smart agency can set the odds in their clients’ favor if they do their homework from the start, before a campaign goes anywhere near the marketplace.

For starters, it’s important to consider a client’s marketing investment from a different perspective. Instead of asking “how much do the other guys spend,” instead consider looking at the marketing investment in terms of relative relationships...the relationship between a client’s ambition in the marketplace and their resource deployment. The greater the ambition, the greater the resource needs. More importantly, when you consider resources, don’t just look at the budget; Also consider people investments and time investments. You can lay these out for any client on an “S” shaped curve. The greater the ambition for the campaign (i.e. transform the category vs. increase share by X%), the greater the required resources. (And yes, there is a point of diminishing returns to be considered too.)

Based on pre-defined metrics compared to their peer competitors, clients can appreciate the relative efficiency and effectiveness of their marketing initiatives against other players in the segment. This is a powerful data point. Looking at these variables, clients have seen upwards of a 20% lift in the effectiveness of their marketing efforts. The key to getting this 20% lift lies in how well the agency deploys their client’s investment.

Agencies that look for, and invest in, both strategic and executional opportunities to do what hasn’t been done before have the advantage. This requires a new way of thinking about strategy, creative and media. Silo-ing these critical components of a successful marketing program won’t work. Strategy, creative and media are inter-related. The bar is simple: if it’s been done before, it has less chance of accelerating the client’s performance. And since the goal is always to help a client outperform their competitors, agencies would be wise to always be on the lookout for new ways to create inventive resource deployment. In the end, success is defined not by how much you spend, but by how well you spend it.

It’s what advertisers instinctively know. And it’s the best way to help clients better evaluate the effectiveness of our efforts.

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Howard Sherman is the managing director of Doremus New York, and has a career history of developing category-dominating strategies and integrating communications programs for brands across a wide spectrum. His responsibilities include oversight of all Doremus New York clients, as well as running the day-to-day operations of the New York office.

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