The article goes on to say: "A recent survey by the Association of National Advertisers and Forrester Research highlighted the challenge in striking terms: 78 percent of respondents said measuring the sales impact of marketing was difficult, and most couldn't even agree on the definition of ROI. ‘Measurement continues to be the hardest task in managing marketing campaigns,' says Jim Nail, principal analyst at Forrester."
Some ROI markers are difficult to quantify. In the article cited above, Colin Sobol, general manager of marketing at GE Infrastructure, makes this observation: "Alone, ROI cannot be used as an effective measurement tool for marketing because the value of relationships, attitude, brand awareness and reputation are difficult to calculate in financial terms."
Global corporations do not have an "industry-wide standard" in their respective sectors. Most of them seem to measure marketing ROI in diverse ways, some of them strikingly similar. It is equally obvious that many corporations are grappling with divergent criteria to measure their marketing ROI depending on their strategic goals. Many corporations are currently assessing where they are in the marketplace, and working with a strategic marketing plan to bring them to where they want to be. Once they decide on the specific resources and strategies that will get them there, they generally decide on the proper mix of metrics to measure their progress. They can then employ their metrics to determine whether they've gotten where they wanted to go.
Besides looking at incremental sales revenues that may have been generated by their marketing functions, and changes in market share, corporations are tracking more subtle markers. For example, gauging consumer changes in brand awareness, or their attitudes toward corporate brands, can yield significant indicators as to corporate success in the marketing of those brands. Consumer changes in purchasing patterns are also strong indicators. Successful brand identity and packaging design are clearly components of this marketing mix.
In other words, there are a host of intangibles and harder to track fluctuations in the marketplace that clearly impact the valuation of a company's brand(s), as well as marketing ROI, and these are much harder to quantify. Yet, these factors that include brand perception have a very direct bearing on the overall value of the company, and its marketing efforts. One thing is clearly evident: there has to be an alignment between corporate goals and marketing goals; alignment between the marketing department and the rest of corporate management, and alignment between all personnel in the marketing department.
It is obvious that in the very near future, the corporate trend toward CMO interface with the CEO, CFO and R&D management will continue to grow. In fact, it can be argued that all CMOs will have to learn to speak the language of their other management counterparts. They will also have to focus on the fact that CEOs are focused on revenue growth.
One critical area that factors into revenue growth is the launch of innovative new products. Top-line sales growth is a major focus; in fact the pressure is only intensifying for CEOs to deliver better results in this area. Thus, there is urgency for CEOs and their corporate marketing organizations to take a critical look at the issue of new product R&D, marketing department accountability, and ROI. At some point, entire corporate management teams must converge in thought and practice on the subject of measuring marketing ROI. Otherwise, corporate marketing departments will face ongoing budget cuts, which may help short-term corporate initiatives, at the expense of long-term branding and consumer relationship building initiatives.
What's package design got to do with it?
Every company is in the business of selling something, whether it be a product or a service. Every product or service is packaged. Every package design should represent an extension of the brand assets of that company. If the brand identity and package design is in line with the brand strategies and marketing initiatives, the end result is packaging that contributes to marketing ROI in a substantial way.
Many marketers are beginning to believe that packaging is just as critical to building brand equity and marketing ROI as advertising is. Yet corporate package design budgets are miniscule compared with advertising budgets.
On a dollar per dollar basis, packaging that truly expresses a brand's assets yield a far greater ROI than advertising. This is corroborated by research from brand consultancies, corporate statistics and independent research. Experts have asserted that package design, as part of a brand identity system, can outperform up to three advertising campaigns and more than eight promotional cycles.
Elliot Young, chairman of Perception Research Services, a company that has conducted over 400 packaging research studies every year, for over thirty years, concurs. His research has demonstrated that consumers find product packaging more memorable than advertising or promotions. In fact, Young has concluded that in consumer surveys, package color was the most dominant feature, followed by package shape and brand logo.
What has all of this got to do with measuring marketing ROI? Plenty. There is no doubt that the extension of brand identity through packaging design is a vital link between corporate marketing efforts and the consumer. In fact, bottom-line pressure is growing on marketing departments to create more profitable customer relationships by mining their brand values with existing customers. Marketing departments are charged with the responsibility to retain existing customers, while gaining new ones. But again that thorny question arises: how should all of these intangibles—brand awareness, brand trust, and consumer brand relationships—be quantified?
Corporations are faced with new realities in the marketplace: the emergence of more market fragmentation has created new demands and new challenges for corporate marketing departments and consultancies alike. Many of today's new market segments have limited the overall success of mass marketing, and eroded brand loyalty. Add to this picture the fact that there are a plethora of private label offerings at retail, which have started to affect the "premium value" image of branded products, and slow the sales of "national brands." Customer expectations are rising. Never has sound brand management been a more crucial factor in guiding companies through these murky waters. Never has targeting the right customer at the right time and with the right marketing initiatives, had more impetus. Never has corporate alignment been more critical.
Corporate marketers are not alone in grappling with these complexities and many others in an increasingly competitive, global marketplace. All of their corporate counterparts must incorporate flexibility into their business plans, and again, seek to align corporate goals and marketing goals.
Marketing guru Martin Brandt once said: "Companies make products but customers buy brands." The most successful brands are carefully managed and consistent. Savvy marketers know that retaining customers while acquiring new ones is the best way to maximize ROI and beat the competition. Delivering on the brand message with sound marketing initiatives; extending the brand values in the packaging of the corporation's products and services, drive relevant customer experiences and build brand loyalty.