Chapter 01

What is marketing effectiveness?

Increasingly, marketing personnel are being asked to measure the effects of marketing and to demonstrate how it adds value.

A wide variety of metrics are used including:

  • Media exposure measures like ratings or clicks
  • Attitudinal data like awareness or image
  • Behavioural measures like response rates and actual sales.

Why spend on marketing?

For commercial firms, the ultimate measure of marketing effectiveness is financial payback. Profit-making businesses do not indulge in marketing in order to increase awareness, or even to generate sales - these are just means to an end. Businesses spend money on marketing because they think it will increase profit, even if the payback comes some time afterwards.

"Despite the fact that profit is often the ultimate motive, research commissioned by the IPA suggests that less than 20% of marketing activity is evaluated in terms of financial payback.”