"But what's the return on investment?"
This is one of the more annoying, yet understandable, questions that marketers and advertisers receive from clients or representatives from the C-Suite. It is understandable because, if it's a public company, these folks have people to report to and are under pressure to produce a bigger bottom line every quarter and every year. Every department that requests and requires a substantial budget will be met with a substantial amount of scrutiny.
So when advertising can be directly correlated with a stronger brand image and higher stock value, then the report should be acknowledged. Right?
In that case, good news for AdLand. Tenet Partners, in conjunction with the 4A's, released an updated report on the "Strong Correlation of Advertising and Stock Value," a report that shows the strong link between a robust advertising budget and brand image.
The original report, released in 1997, showed that public companies that engaged in advertising had a stronger brand image than those public companies that did not. The new and updated report tracked close to 20 years of data about advertising and stock value, and it shows the correlation is even stronger than once thought.
The report displays different quantitative ways brands and agencies can show the benefit of advertising in the long run. First, the report identifies and explains the Advertising Efficiency Curve — the relationship between advertising spending and brand image. The Chairman of Tenet Partners, Jim Gregory, explains that a big advertising budget initially attributes to a high rate of return. The curve shows the brand how it can move from spending on advertising to create a brand image to spending to maintaining a brand image.
Think brands and agencies will like this report? We think so too.
Gregory also goes on to mention how CEOs and communicators need to get on the same page. Imagine that!
During a time when marketers are hounded to show value, this report can give light and strategy to those needing it most. Hopefully they read it.
Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.
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