One of my clients recently asked me, “Does advertising work?” I wasn’t sure why he asked me this. Our advertising had been extremely successful at raising his sales in recent months so I assumed he knew that it worked. So why the question? It turned out that he was wondering if there was a perfect way to measure the effectiveness of advertising. There’s no perfect way to measure anything but I thought I’d take a look at three key points that may help my client, and you, make more balanced decisions around your ad spend.
Does the size of your advertising budget contribute to your advertising’s success?
No. Money isn’t a guarantee of success in any industry. In 2013, Microsoft spent $2.6 billion on advertising, while Apple spent $1.1 billion. Did Microsoft’s bigger budget make them a bigger brand?
The answer is no. According to a 2013 report in Forbes, Apple is the world’s most valuable brand, worth a staggering $105 billion, while the Microsoft brand is only valued at $57 billion. Proof then that having deeper pockets doesn’t make you more successful. Perhaps it’s far easier to advertise, and in turn sell, better brands that are worth more than the sum of their parts? Everyone knows Apple is an awesome brand that makes amazing products, while Microsoft is a lot less remarkable.
But what would happen if you had to advertise a more ordinary product, like cheese or cat food? Well there should be no difference as to how effective your budget is, regardless of whether you’re spending $150k a year or $2 billion a year. You have to ensure that the basics are done right, that your creative execution is smack bang on brief, and that your media buying is as effective as possible. While I’ve never worked for Apple, I’m sure their basic advertising processes are similar to Microsoft’s. The same can be said for Toyota and Ford.
Does the size of your advertising agency contribute to your success?
David Ogilvy wrote in his autobiography, “Confessions of an Advertising Man”, that size wasn’t necessarily relevant unless you wanted it to be. He wrote about the time the head of a mammoth advertising agency solicited the Camel Cigarette account and promised to assign 30 copywriters to it, but the head of R.J. Reynolds simply replied, “Why can’t you just give us one good one?” Makes sense to me.
However, if you’re the kind of person who needs to delegate everything, then 30 people working on your advertising is what you need. If you’d prefer to be more hands on and in touch, then perhaps you only need two people working on your advertising. In some cases the very business model that you’re trying to advertise might be so flawed that no amount of people can fix it. Take as an example the recent demise of The Good Guys. Could a huge number of advertising folk have saved them? No. The Good Guys were about being cheap and boring but in New Zealand, you don’t get anything cheaper or more boring than Harvey Norman. The boring slot was already taken and no amount of advertising or money could change that or save The Good Guys.
Caveat emptor - “Let the Buyer Beware”
What is the most important contributing factor to the success of your advertising? It’s you. Think of your advertising in the same way as if you were buying a new car. You can try out as many different brands and variations as you’d like until you’re happy, but how much you pay for it, what marque you buy, what colour it is, how many extras you get – these are all decisions that you make. Sure the salesman and the brochure may sway your thinking, but you, and only you, get to say yes or no to the final purchasing decision. This responsibility carries on throughout your ownership, as all the decisions you make as the owner are yours and yours alone.
Let’s face it – you’re the one making the decisions when it comes to your advertising. Whether you choose a campaign that’s going to challenge the status quo or whether you wimp out and go for something mundane that pleases the board of directors, you made those decisions, you gave the instructions and approved whatever it was that lead to the end result that the advertising delivered. The success of any advertising will always rest with the person who signed for it.