Listening to Marketplace on NPR tonight, I heard an interesting interview with Rex Briggs, who runs a marketing consulting firm called Marketing Evolution. His argument is that marketing for many years has been a black hole - money went in and it was hard to measure the impact. His firm has differentiated itself by trying to set metrics and measure the impact of marketing.
He's just written a book, which is being published this month. The book is called What Sticks, and looks at what marketing expeditures work and which don't. The really telling statistic that was discussed during the interview on Marketplace was Rex Brigg's assertion that over $300 Billion dollars is spent on advertising each year in the US, and, according to his research, almost one-third of it is wasted.
This is something I suspect many of us in marketing have recognized for years - there is a big investment required for marketing and advertising and often the returns are hard to identify. In television and other mass market advertising, I suspect the investments are rarely worth the investment. More likely, finding small, niche audiences and growing loyalty and word of mouth credibility probably creates more value than repetitive marketing.
The Marketplace story used Coke as an example of a firm that uses a lot of advertising. Interesting, because while I see Coke ads all the time, I never drink Coke and won't unless I absolutely have to. I am Dr. Pepper drinker and have been for years. Dr. Pepper has a much smaller ad budget, and I think could grow its market and customer base by creating loyalty and reasons for me to become an ambassador for Dr. Pepper to my friends. Word of mouth and brand loyalty are much better uses of marketing dollars than repetitive marketing.
So, the billion dollar question - literally - is: what value are you creating with your advertising dollar?
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