Monday, April 09, 2007

Wannamaker's 50% rule is long gone now

The oldest cliche in advertising is the Wannamaker one about 50% of ad spend being wasted but not knowing which 50%. Indeed this blog is as guilty as any of using this and I'll do something about that this week!

One reason why the 50% rule is no longer appropriate is the variety of measurement tools and techniques which enable marketers to quantify the impact of advertising activities. Qualitative and Quantitative analysis techniques combined with the 1000's of reports available from web2.0 channels means that information which demonstrates advertising effectiveness has never been easier to obtain. If you're organisation doesn't monitor their advertising for ROI purposes then it's probably a good idea to question why not. The only rational reasons for not tracking marketing ROI are the following:
  1. We don't need a higher marketing ROI - we're rich
  2. We've never thought about it
  3. We don't know how to check it
  4. We were told it wasn't possible
My guess is that no organisation is going to claim number 1 (maybe Microsoft and Google) and if you're answering 2 or 3 then it's time to check in with your ad agency and ask some questions. Answer number 4 and it's time to get another agency (e-mail me and I'll give you a list of people to call).

Next time someone quotes Wannamaker at you, ask them to name an organisation who still regard a 50% ROI from their advertising being regarded as acceptable. Please let me have the details and I'll go and help them out because it's no longer rocket science!

4 comments:

Ron Shevlin said...

The next time someone quotes Wannamaker, I'm going to tell him/her that Wannamaker was lying.

If he knew that 50% of his ad spend was wasted, then he HAD to know which 50% it was. Otherwise, how did he know it was 50% and not 75% or 25% or 100%?

And thank you for promising to "do something" about the Wannamaker quote. I represent just one man's opinion, but it seems like EVERY article you read on marketing measurement starts off with that quote.

John said...

Ron - the Wannamaker quote is now gone from this site. Let's hope we can consign it to history elsewhere in the near future!

jozzab said...

Ron... I agree it is a little hackneyed, but it is possible he was trying to convey a point, rather than give a precise evaluation of his marketing budget...

John said...

I guess that the point is worth another post exploring why it still comes up time after time!