Gread Ideas I Learned in October, Part 4

ROMO COP.

No, this is not a new Schwarzenegger sci-fi flick. It's the right approach to marketing measurement.

Back to Rex Briggs' and Greg Stuart's What Sticks for this one -- or actually two -- ideas: Return on Marketing Objective and Communication Optimization Process.

I really like the distinction Briggs and Stuart draw between ROMO and ROI (Return on Investment). I've ranted that the measurement obsession is wrong: ROI (usually defined as immediate sales spurred by an individual ad) is NOT the only valid measure of marketing effectiveness. If it were, all we as marketers would do is a bunch of couponing and discounts, and as the authors state on page 50 "If you condition consumers to wait for price discounts..then you're also conditioining them to switch from your brand to a very similar competitive brand that may be offering a price deal this week."

(They refer to breakfast cereals in this paragraph -- I wonder if this is the old (circa early '90's) General Mills market mix model study by Promotion Decisions, Inc. authored by Greg Ambach and Mike Hess. They proved that promotion generated immediate sales but not repeat sales while advertising generated repeat sales, both at higher price and higher frequency. I was going to link to it from this post, but couldn't find it online any more. It's an oldie but goodie! If anyone knows if it is still online, leave me a comment.)

But back to the real story. ROMO is so important because in so many catagories and many media, it is unrealistic to expect a person to drop everything and make a purchase that moment. When they purchase later, the last ad/marketing piece/brochure, etc. that he/she sees gets all the credit, discrediting all the other previous marketing stimuli. Market mix modeling is a great tool to straighten out the misallocation of credit, but it is costly and complex.

Boosting consideration and purchase intention provide a return because the indicate that the consumer is moving toward a purchase. Rex's Cross Media Optimization methodology is a great tool But since these metrics are softer than revenue, the process behind measurement is as important as the metric itself, the authors argue.

This is where COP comes in. The authors lay out and illustrate three critical steps: 1) to get everyone to agree on the primary goals of the campaign;  2) create the right measurement tools, processes, and metrics; and 3) devise scenarios on how to change the campaign as results data come in.

It sounds deceptively simple, but in reality is hard. They bring this to life with the example of the McDonald's chicken flatbread sandwich. The company had to answer the following question: if the ad increased traffic, but people ended up buying a Big Mac and not the chicken sandwich, was the advertising successful?

What Sticks provides some great advice on how to apply this discipline to benefit the quality of marketing programs, improve the ability to rapidly respond to results of the campaign, and appropriately get recognition for marketing success.