I recently came across an article at Advertising Age titled, “Why Ad Industry Won’t Recover in Second Half.” In it, Judann Pollack – the author – quoted Laurence Boschetto, president-CEO, DraftFCB with saying,
“Clients are saying they want accountability for every dollar they spend, and they want cause and effect. Clients will continue to rally behind ideas that build business, and we as an industry have to accept that things will never revert back to the pre-recession mind-set that wasn’t totally focused on accountability.”
Wow! Now that’s a wake-up call if I ever heard one! Time for us to wake up to the fact that the world in which we once operated and conducted business has made some permanent changes! Interestingly, professional marketers and agencies are not the only ones who need a change in our thinking. Business owners and organizations also need to wake-up to the fact that if they want accountability from their marketing, they themselves now have to become accountable to the decisions they make and the support they provide!
In other words, the time of playful ad spending on low result producing activities is over. In comes the sternness and structure of performance-based spending.
What is Performance-based Spending?
The idea behind performance-based spending (or performance-based marketing) is that for every activity you engage in, you are tracking multiple metrics used to determine the overall effectiveness of the implementation. In other words, for every medium, technique, and message you engage in, there should be built-in metrics that are fed by captured data that will be analyzed to determine the cause and effect of the activity. Without the metrics, you’re just scattering money into the wind.
Those metrics, when analyzed against the established goals, will give you the activity’s performance. From that, you can determine if the activity simply needs to be tweaked to increase the already positive results, OR you have clear indication that the activity is not producing results and therefore should be stopped. The focus is on the cause and effect… the return on the investment… the performance of the implementation.
Performance-based Spending Leads to Accountability
For our marketing strategies to truly be valuable, we HAVE to implement, track, analyze, and report results. The results do not simply include subscriber or viewership numbers, total impressions, the click-through rates, or the amount of traffic driven to our web sites, but the actions and transactions made by individuals directly with our organizations. This processes of “implement, track, analyze, report” brings accountability into the structure of how we develop and implement our marketing strategies.
Wikipedia talks about accountability as “responsibility, answerability, enforcement, liability with the expectation of account-giving.”
Put into my own terms, here’s what I believe marketers AND businesses should be accountable for regarding how we market to our audiences:
You are responsible for the research, planning, development, and decisions you make to engage in certain marketing activities. No pointing fingers. No “he said/she said.” You all agreed and you all made the decision. Getting past this point helps you take quicker action to prevent any continued losses.
Both the marketer and the business are answerable to each other and themselves as to why an activity did or did not produce the desired result. If it did, hey… it’s time for a celebration. If it didn’t, try to identify the potential reasons a failed result was produced. This could bring to light major issues that need to be immediately dealt with! Could be something operational with the business, or it could be a major deficiency on the part of the marketer! Figure it out by communicating with one another!
A central step in the development of your marketing strategy should be a “Strategic Marketing Action Plan.” This document is not just an outline of the specific activities you are engaging in, but is also a guide with planned action steps that should be followed should an activity or even a whole strategy fail. This gives you quick, decisive actions that will be taken to begin the process of rectifying the situation. Don’t focus on the failure, start enforcing planned actions to prevent future failures.
Our decisions, our actions and our reactions are things that may prevent us from reaching success in our marketing. They become a liability; something that restrains us from probing deeper and pushing farther with our strategies. We have to accept that these liabilities exist, but work to ensure they do not hinder us from always moving forward. You can be accountable for past decisions, actions, and reactions… just don’t live in the past.
Plugging accountability into your marketing is step in the right direction to put a cap on wasteful ad spending. And in tough times such as these, we need to be sure that every dollar we spend marketing ourselves is in some way producing a measurable result. Show the result, save the dollars!
Questions for Thought
Do you have accountability as part of the structure of your marketing?
What are your thoughts or experiences with engaging in marketing activities that did not capture valuable metrics to prove its effectiveness?
Are there any horror stories of a time you spent large sums of ad dollars on a complete bomb?