I have spent more than a decade now in the media industry and as a media agency representative, I have had the opportunity to work with scores of clients who invest crores of rupees on advertising. And, during this journey "Media ROI" has always been an item that has been discussed again and again.
Media ROI management is an exact science and there is a huge bank of knowledge that exists in academia on the subject. Globally, extensive work has been done by leading brands and agencies on establishing the ROI of media. However, there is very limited applied work that is available with any advertiser or agency in India to showcase Media ROI in action.
"Accountability" is the buzzword and the whole industry keeps talking of the need for media agencies to become accountable for the media investments being recommended for the clients. And, yes that is the right direction for the industry to move in. But, driving accountability requires an ecosystem that encourages this change. Unfortunately, I do not think any of the stakeholders in media are taking any significant or concrete steps to move in this direction.
Media ROI Management first of all requires establishing a relationship between the media investments and tangible business results; and, at the second level there is a need for attribution of the business results to various elements of the media mix thus deriving the ROI of each element of a campaign. However, these apparently simple steps are extremely challenging to execute in reality today and all the constituents of the media ecosystem (Clients, Agencies & Media Owners) are responsible for this situation. However, I am limiting this note only to the role that the Agencies and Clients have to play and shall deliberate on the Media Owners part at another time.
No, I am not shying away from the responsibility that the agencies have. Of course! the ultimate onus of establishing the Media ROI is on the media agencies as it is their business which is at stake but, they cant do it on their own. Over the years the media agencies have invested considerably in developing methods and tools and built statistical capabilities to be ROI-Ready.
But, there are certain responsibilities that have to be taken up by the advertisers to quantify Media ROI and there are three primary requirements that the advertisers need to provide towards this mission.
First, is having a clarity on what is the measure that a particular campaign needs to drive. Of Course! revenue, profit margin, increased sales and market share are the final goals but, these are the financial goals which are generic to every business. A deeper investigation into the brand challenge is required to identify the specific objective that the campaign must deliver on. These specific objectives could be increasing the consumer base or driving higher per capita consumption, etc. Going a step further, advertisers need to have a diagnosis of what are the barriers to these objectives being achieved.
The second requirement from the advertisers is to setup a system to measure and record the state of the brand on the measures referred to above, on a continuous basis. Yes, there are some advertisers who are quite evolved in this but, most others have still a long way to go. There are clients that very generously invest in measuring market sales (for self and competitors) using syndicated retail audits and/ or setting up consumer panels. Also, some advertisers invest in Usage & Attitude Studies and Awareness Tracking studies which deliver a lot of the mind measures required to understand the brand challenges.
The third and the last requirement is for the advertisers to record all the market interventions and changes in the marketing mix in a systemic manner (for self, and if possible for competition) as this data is very vital input to drawing inferences related to the attribution of cause of the movements in the state of the brand in the market.
The media agencies have data and information that is limited to the media research available in the industry and all data beyond this has to be provided by the advertiser. With the growth of digital new data sources such as web-traffic, search volume data, volume of brand mentions, etc are becoming available which can also be accessed by the media agencies, but as of now that data has its limitations. It is also very critical that there be an integrated approach to develop this data ecosystem such that all these data are aligned to each other and can be used seamlessly for any further analysis.
While crores get spent on advertising, there is an apparent resistance to make investments to setup the above mentioned systems even though these investments would be a very minute percentage of the advertising budgets. There is often an expectation from some clients that these investments should be borne by the agencies. But, looking at the media agency business model it is very unlikely that the agencies would ever be able to make these client specific investments.
So, if Media ROI really matters to clients and they are serious that it should be an integral part of the evaluation of the performance of media, then that expectation has to be backed by these investments and this data should be seamlessly and continuously shared with the agencies. Of Course! there will never be perfect information and ultimately the agencies will work with what is finally available. Even today, work on establishing a relationship between media investments and business results continues across clients; but, with adequate data systems such work can become an integral part of the planning process.
And, lastly Clients need to realize that Media ROI management is a resource-intensive occupation and cannot come as part of the current client-agency remuneration arrangements.
I hope that all constituents will make due efforts to evolve and in the near future continuous measurement of Media ROI will be a feasible reality leading to higher investment efficiency and higher profitability for the Clients.
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