Waste of Advertising

Half the money I spend on advertising is wasted; the trouble is I don't know which half.

About 7 years ago, a guest speaker in one of my marketing courses stated that this quote is no longer valid due to the emergence of digital marketing which tells you exact ROI against the advertising spend.

I'm not really sure from what perspective he was speaking, but after 6 years in the field, I believe he was wrong and that the quote is still valid.

There are a few reasons for this...

#1

A strong digital presence is still a part of the customer journey. Customers are likely to buy from you, especially if it's a high-ticket sale, if your digital presence communicates reliability. You can't put an ROI on this.

#2

For businesses that are driven by personal selling, the number of leads being generated through marketing (SEO, SEM, Social Media) makes a lot of difference but the conversion is not very straightforward. Whenever personal selling comes into the picture, it is usually a high-ticket sale.

The salesperson is likely to spend some time (months in some cases) warming up the lead before it is converted. In many of these cases, customers end up buying something else entirely because they realize that their needs are different in the entire process.

#3

The same lead coming from various channels before it converts is another debate where I'm yet to see a conclusive argument from any digital marketer. Some attribute the lead to the first platform, others to the last. However, it is an inconclusive debate. Even if you attribute it to all platforms equally, you still don't know which one of your platforms you should stop spending on.

While you can find out the exact number of impressions, reach, engagement, and website visitors you get from your spending, many businesses don't care about it. Revenue is all that matters in the end.