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Belch: Advertising and
Promotion, Sixth Edition
IV. Objectives and
Budgeting for Integrated
Marketing
Communications Programs
metrics to measure the ROI on advertising expenditures
or—if they do—use the wrong ones. The
result is that these expenditures are easy to cut,
even when they should not be. As noted by Keith
Woodward, VP of finance at General Mills, Inc.,
most managers want to see the direct returns to
volume or revenue, and “you can’t do that with
advertising.” He suggests the consideration of new
forms of metrics.
Woodward notes that brand value is important
but investments must consider other objectives as
well. Factors such as opportunity for growth, historical
performance, growth versus the competition,
and previous advertising effectiveness metrics must
also be taken into consideration. Once the campaign
is launched, revenue, market data, and other
proprietary data are considered. Woodward notes
that while there is no absolute metric for advertising
ROI, he feels that General Mills has some good
insights and that advertising does work.
Carol Gee of Du Pont (Lycra, Cordura, and other
brands) agrees. As global director of brands, Gee
notes that it is difficult to track the effectiveness of
advertising on the end consumer, “but if we just
advertised to our direct (OEM) customers we would
be a commodity overnight.” While most consultants
and experts agree that creating awareness
194
7. Establishing Objectives
and Budgeting for the
Promotional Program
© The McGraw−Hill
Companies, 2003
and reinforcing the brand’s image are both necessary
and measurable, most do not agree on what
other factors should be considered in computing
ROI. Brand revenues, sales, and even contributions
to stock values have been suggested—though there
are certainly some limitations to each.
For their part, advertising agencies are also
offering their opinions. In addition to awareness,
factors such as valuation, ability of the campaign
to differentiate the brand name, and other
“response components” are suggested. Getting
the ad to prompt the consumer to call a toll-free
number, visit a website, or request additional information
about the brand is also a valuable objective,
they contend.
While the experts and consultants may disagree
as to the real value of advertising—and perhaps
even the real objectives—they do agree on a couple
of things. First, it is hard to measure the direct
impact of advertising. Second, a variety of objectives
might be used in the evaluation process. And
third, so far as determining the ability of advertising
to demonstrate positive ROI, we aren’t exactly
there yet.
Sources: Kris Frieswick, “New Brand Day,” CFO, November 2001,
pp. 97–99; Kenneth Hein, “Can’t Buy Me Love,” Brandweek,
June 4, 2001, pp. S20–S22.
The lead-in to this chapter reports on an issue that has perplexed marketers seemingly
forever—what is the value of advertising? As you can see, there is no 100 percent
agreement on what the objectives of advertising are or if it works. As this chapter will
demonstrate, success can be measured by both marketing and communications objectives.
This chapter will examine how the goals for the integrated marketing communications
program follow the company’s overall marketing strategy and how these goals
determine and are determined by the promotional budget.
Unfortunately, many companies have difficulty with the most critical step in the
promotional planning process—setting realistic objectives that will guide the development
of the IMC program. Complex marketing situations, conflicting perspectives
regarding what advertising and other promotional mix elements are expected to
accomplish, and uncertainty over resources make the setting of marketing communications
objectives “a job of creating order out of chaos.” 1 While the task of setting
objectives can be complex and difficult, it must be done properly, because specific
goals and objectives are the foundation on which all other promotional decisions are
made. Budgeting for advertising and other promotional areas, as well as creative and
media strategies and tactics, evolve from these objectives. They also provide a standard
against which performance can be measured.
Setting specific objectives should be an integral part of the planning process. However,
many companies either fail to use specific marketing communications objectives or