Factfile 45
Why measure ROI
It is many years since Lord Leverhulme was credited with the dictum that 'half of my advertising budget is wasted, but I don't know which half.'
Today, we are operating at a time when there is great uncertainty over the extent of the economic slowdown in Europe and beyond. Consumer spending has continued to grow impressively but corporate profits are under pressure, particularly in the technology, manufacturing and export sectors.
These imbalances, combined with changing patterns of consumer spend by sector, are posing significant questions for companies ? how can they explore what marketing effectiveness is and quantify the return they are getting on their marketing investment?
According to Professor Stephen Burnett of Northwestern, In a truly great marketing organisation, you can't tell who's in the marketing department. Everyone in the organisation has to make decisions based on the impact of the customer? Marketing is the business function that identifies and fulfils needs and wants, defines and measures their magnitude, determines which target markets the organisation can best serve, decides on the appropriate products, services and programmes to serve these markets and calls upon everyone in the organisation to 'think and serve the customer.'
(Philip Kotler, Marketing Management, (6th edn, 1988) p.xvii.)