Why spend money that doesn't deliver?

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Jay Langan
Jay Langan
There's that famous quote every ad person knows – or should know – by Lord Leverhulme, founder of Unilever: “I know that half of my advertising budget is wasted, but I'm not sure which half.” Ouch. Happily, things have changed in the eighty or so years since that consumer brands dynamo was created in the “dark ages” of 1930.

Technology and access to data have changed the advertising game, allowing companies to be much smarter with their advertising dollars. Capturing and examining relevant data means campaigns can be held accountable right from their launch and revisions can be made to ensure that a bemoaned wasted half no longer goes to waste.

As every financier knows, the idea is to make an investment (in our case, that's a media budget) and to have a rate of return that's positive (meaning, results that achieve more than was spent).

There's no reason an ad agency shouldn't be able to document the ROI for every client's expenditures. At our firm, Ocean Media, it's the philosophy we live by: ROI should be at the forefront of every advertising campaign. It's the strategy and focus behind our media planning and buying.

How do we do it? Analytics. We look at the most relevant data available, and use it to assess, guide and grow campaigns from relatively small test budgets. Essentially, with this data we are able to determine what changes/optimizations need to be made, even with a media buy that spans across dozens of networks. Our tests and ongoing campaigns are developed with a certain target (or cost) acquisition in mind. As we hit (and exceed) that target, it enables us also to continue to scale the campaign in size. It's a risk-averse strategy that pays off, both for clients and for us.

It's how we've helped build household names like Priceline.com, eHarmony, FreeCreditScore.com, Overstock.com and Angie's List, among others. But don't think this focus on actionable analytics and ROI works only for companies that live primarily online.

We're seeing a shift among more traditional, brick-and-mortar companies that are now looking to track and analyze the ROI of their media campaigns. With their websites contributing an increasingly larger percentage of overall revenue, more and more data is becoming available from real-time Web visits and sales.

In today's economy, wasting half an ad budget could be considered criminal. There's no need to stumble about blindly in the dark. With a focus on testing and evaluation, comprehensive analytics and optimization, every advertiser has the right to expect a positive ROI.

Jay Langan is executive vice president of Ocean Media in Huntington Beach, CA

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