Q: What is the ROI of advertising?
A: Stop advertising and find out.
Marketers know that they have to advertise, but many are dissatisfied with advertising's return on investment (ROI) — even though most of them do not measure it anyway, according to a new study by Forrester Research.
Marketers were asked how likely they were to recommend a particular product or service. The aggregate rating for ad agencies was 21%, meaning that very few clients would recommend their agencies' services to others.
The flip side is that 76% of marketers had no way to determine their ROI from their lead agencies, and 69% said ROI is too difficult to measure.
"There's always an undercurrent of discontent with agencies," said Peter Kim of Forrester. "They're dissatisfied, yet on what basis? It's not because the agency didn't help them drive sales or meet some other business outcome. It's a vague disenchantment, or disappointment; it's a feeling that there isn't data to back up."
Marketers aren't the only ones pining for more data. A new joint survey by NSON Opinion Research and the Audit Bureau of Circulations of online ad planners and buyers revealed a strong desire for independent verification of new media ad metrics.
Three-fourths of North American ad professionals said that they would be more likely to advertise on Web sites if the results were independently verified by a third party.
Less than half of advertisers and agency professionals said that they trusted online publisher metrics.
And more than two-thirds of respondents said that they preferred advertising on audited Web sites when possible.
There is good news for agencies. For one, they are still responsible for nearly 60% of ad spending. Plus, firms are always creating more data to meet demand. In traditional media, Nielsen//NetRatings recently started tracking TV viewing by college students. On the new media side, Podtrac just released a media planner for would-be podcast advertisers.
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