Managing other people's money

At MEC we spend lots of other people's money. Companies' money which they want to spend advertising and promoting their brands to encourage people to buy them. This money is spent on wide range of activities, from TV ads to websites, sponsorships to retail promotions, events to trade support. Basically a potentially vast array of different activities.

Every now and then, these companies have a justifiable right to ask whether the money that has been spent for them has been spent in the best way, and has given them a good return. Often prompted by a question from the CFO at annual budget time. But a fair enough and simple question, right? Wrong. Well, actually right.

In terms of measuring return, it's a complex question in terms of evaluating the impact of the wide variety of activities and their individual contribution to the overall goal (sales, awareness, requests for information, etc.). This is where, if we have sufficient data on the spend and timing of activities, together with data on the goal - usually sales, we can employ market mix modelling to get pretty close. But to provide a clear evaluation of the return on investment requires a simple process, regardless of what activities you are employing.

First, be clear on what you are trying to achieve - are we trying to improve the brand perception among a particular target audience (or address a brand perception problem)? Are we encouraging people to try our product for the first time? Are we trying to get people to talk about something we've done? It can be all of these and more (although the more objectives the more difficult it is to measure..). Once we're clear on objectives, we need to work out how we're going to measure each one. Companies usually track sales, and may have ongoing research tracking awareness and brand perceptions. If there's not, we need to put research in place before and fater the activity to measure the change. That's all at the macro level i.e. what all activity is doing for the brand - at the micro level, we would want to measure how each individual activity has performed. For the website, how many unique users or page impressions, or downloads have we achieved? For the TV campaign, how many people did we reach and how often? Did it appear in all the desired programming we wanted in the plan? For the event, how many people attended, what did they think of the event, and did they notice any brand activity there? This combination of business (e.g. sales), marketing (e.g. awareness, perceptions) and channel (media, event, etc.) evaluation will give you an excellent picture.

In terms of the first question of making sure we spend the money in the right way, this can also cover a number of things. We should be spending the right amount in the first place, and behind the right sub brands and categories the brand may operate in. To make sure we spend the right amount on the right activities should be dictated by a core idea. This may be to always communicate with consumers in the morning, before breakfast (e.g. for toiletries or cereal brand), or may be to always associate with high performance (e.g. cars, sportswear). This, combined with a full understanding of what our target audience likes, consumes, reads, watches and talks about with friends will guide which TV programmes, which events, which types of websites we should consider using. And everything we show to the consumer should be more than just wallpaper - it should engage them, whether this makes them laugh, cry, mention it to a friend, play a game, find out more information, call a number or buy the product.

If we do all this properly, then we get to continue spending other people's money, which let's face it, is always more fun than spending your own.