September 19, 2014


Mix messages for increased ROI

John Klein

John Klein

Marketing is a bit of a grail quest: organizations are always seeking to reach their constituents in ways that make a meaningful connection, use the most current techniques, yield the greatest results and do so within reasonable financial constraints. 

Today that quest is most often focused on leveraging digital media - where a little money and a considerable amount of time and effort are utilized with great hope for results.

Yet the old saying attributed to John Wanamaker, paraphrased - that he knows his marketing works, he just doesn't know where - is still relevant today. 

Given the array of media choices available, the quest for marketing effectiveness grows more complicated each day. 

However, there is emerging research that is beginning to shed light on general principles around marketing mix and its long term benefits.  Nielsen Analytic Consulting recently published a report based on the review of their global clients and offered some guidance for nonprofit marketing efforts.

The not-so-good news

In the study, the combined marketing efforts of their clients averaged an overall return on investment of 9 percent. 

In other words, for every dollar invested in marketing, the companies received $1.09 in revenue - a 9 percent return on investment.  

For a global brand, gaining a 9 percent return could be a wise investment, yielding millions of dollars in increased revenues. 

For the vast majority of companies, though, this is a significant challenge. Marketing investment typically comes off the bottom line of an organizational budget, and the risk/reward factor is very high.

The better news

Greater ROI can be achieved through mix adjustment.

Nielsen found that its clients could increase ROI up to 30 percent to 40 percent through focusing on the most effective media, testing messaging and spending, and recalibrating total marketing mix to reflect their learning.

Digital efforts have significant short-term impact.

The combination of online ads, search-engine marketing, e-mails and social media gives marketers the biggest bump in ROI in the short term, with an average ROI of 118 percent.

Traditional marketing efforts support longer-term efforts.

Tactics like the use of radio and TV, print and public relations start more slowly but pay out over time, with ROI rates from 81 percent to 116 percent, when blended with other media at the same time.

Applications for nonprofits

Using ROI as a key indicator.

Since nonprofits generate revenue through indirect and longer-term efforts - development, donor requests, grants and the like - using a pure ROI approach could be misleading and could mask the impact on brand measures like awareness and consideration. 

But knowing that certain efforts can pay out at different levels over different periods of time can assist nonprofits in creating the best strategic approach.

Testing.

Experimenting with precious financial resources may seem frivolous to some, but Nielsen points out that each marketer, its constituents and the best way to reach them is unique. 

As such, testing and applying the learning to future efforts is the only way to determine the most efficient mix of communication tactics.

Digital makes a difference.

The overwhelming embrace of social media and other digital tactics has a general quantitative measure of validation in a marketing program. 

However, the data indicates the degree and level of importance over the long term will depend on the strength of other tactics in the mix.

Traditional media makes a difference, too.

While many nonprofits do not have the financial resources to mount a traditional advertising campaign, using traditional media creatively - pro-bono and public-service-announcement advertising opportunities in local media, public relations and press releases - can work in tandem with digital activities to create a promotional program that can build awareness and be a wise financial investment.

John Klein is president of Trilithon Partners, a marketing consulting agency based in Cary, N.C.


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