In spite of bad weather last week in New York, Crain's Television Week Magazine's Second Annual Media Planning Conference was well attended. The crowd for the event -- sponsored by ESPN/ABC Sports and SiTV -- was an enthusiastic collection of primarily traditional media people.
Read about the first panel on communications planning here.
The second panel of the morning was ostensibly about ROI, moderated by long-time media sage Erwin Ephron. I say ostensibly because Ephron, at the beginning of his session, told the audience that he’d changed the rules a bit and that ROI was no longer going to be the sole purview of this panel.
Participants included Rob Jayson, Director of Corporate Strategic Resources, Initiative; Nadine McHugh, Strategic Planning Director, Mindshare; Alan Rovitzky, Director of Strategic Insights, Mediacom and Ronnie Beason, Group Client Director, Carat.
Ephron’s intent for changing the focus a bit was to open the discussion up to include things that appear to be working in advertising, and not simply return-on-investment.
This turned out to be a good idea, because it took the conversation in the direction of measurement and accountability, only hinted about in the panel preceding.
These panelists all addressed the issue of advertising effectiveness and accountability. As Rob Jayson said, “ROI really has to be set in the context of what consumer action you need people to take and not just relative to CPM or a simple short-term metric of payout. There has to be a long term view of brand value.”
This assumes that the interest on the part of marketers is one of “looking forward.” Although it seems that it is, too much focus on ROI has us looking backwards rather than forwards. Ronnie Bearson said it best when she commented that “you can only measure things in the past.” Everyone seemed to agree that looking forward is the real challenge. “Spending clients’ money better is the true objective,” said Alan Rovitsky. That is a proposition that requires projection rather than reflection.
A communication strategy that seeks to influence is one that must be projective, and in order to do that well, knowing what a client is really trying to achieve and which media are the drivers of action that satisfy objectives is key, says Jayson.
Ephron called this exercise one of “disintegrated communication channel planning,” where the plans budget for the goal rather than the medium. The real need isn’t so much ROI as we’ve come to understand it, but instead it's to understand what it is worth to the brand to achieve that goal.
This requires us to quantify those goals, like “intent” or “awareness.” But this is a paradigm shift that isn’t happening with most clients, yet. What is starting to happen, however, is the establishment of “tactile brand goals” that can be measured and monetized. The most compelling form this can take are agencies phrasing what is going to happen to a brand by virtue of the advertiser's marketing in financial terms.
The kinds of questions agencies still can’t adequately answer, however, are just the kinds of questions raised by establishing tactile brand goals couched in financial terms. Those are questions like: With a purchase intent of ‘Y,’ how much product will I sell? If I reduce a budget by ‘X,’ how much less product will I sell? How do advertising investments actually affect a business?”
ROI analysis is naturally retrospective. It claims to do more than it can when it is used to look forward. As Bearson said, just because something happened before doesn’t mean it will happen again. It is the old fallacy of the Uniformity of Nature; that is, that the future should resemble the past. But believing the future will resemble the past is an infinitely regressive induction. Our reason for thinking that the future will resemble the past is that the future resembled the past in the past. That seems patently circular: the belief that p is said to be justified by the belief that p.
So, it seems as though “ROI” can no longer be taken for granted as meaning “return on investment” and can no longer stand proxy for predictive analysis. Too much depends on just what “return” means, what constitutes “investment,” and what that investment is being put towards.
Jim Meskauskas has spent the last ten years working in media at advertising agencies, handling both online and traditional media accounts that ranged from Nestlé Beverage to Amazon.com to Schering-Plough. Most recently he was partner and Chief Strategic Officer with Underscore Marketing. He is also a principal and Vice President of Media with Pericles Consulting, an online political marketing agency, whose clients have included the Bush-Cheney 04 re-election campaign and the National Republican Senatorial Committee.
Meskauskas spends much of his time working as a freelance writer covering the media and advertising industry. When not doing that, he's playing Xbox, watching movies, bidding on antiquarian books at eBay, or trying not to spend too much money at Zabar’s.
