GM marketing folks seem to be innovatively tracking marketing results- and doing so really well. You would recall that on the eve of the Facebook IPO the marketing folks at GM committed at least a minor transgression by declaring that advertising on Facebook was not working for them and they were going to stop advertising on Facebook. However, today the GM marketing folks have dared to announce that they will not advertise in the Superbowl. This is blasphemy in traditional marketing strategy terms- or is it?
Frankly, if you try to sell anything including cars how much will you be willing to spend on advertising? If the market is slow, as now – you'd happily spend all of your margin on advertising. If you could see customers actually buying: because of your advertising. You'll console yourself on the narrow margin because your production shift will operate and employ folks, only if you have customer orders.
Traditionally however, you were used to decide on media spending based on one or more of the following:
- Advertising budgeted as a percentage of projected sales
- Some benchmark of your competitor spending
- What you wanted to achieve in terms of frequency and reach.
- In tough economic times it could be simply – what you can afford to spend on advertising.
All this is changing as today measuring advertising results has become really easy. For example, on the web via Google Analytics and other platforms you can see exactly how the customer arrived at your e-commerce or contact form and if it was through a particular Ad campaign. You know almost in real time,which ads are working and which are not. Hence -probably the GM decision to pull Facebook advertising as they could measure that the spending was not resulting in corresponding sales.
Similary, tracking Superbowl Ad results has become much better and more real time. In fact, pre-tests done right would be able to predict if even at last years $3.5 million for a Superbowl ad is going to give the sales that GM is looking for. Clearly, GM is doing some serious market research and showing remarkable confidence in making hard media buy decisions. In other words, the marketing folks at GM are ready to act decisively, on the market insights they are generating.
All this puts huge pressure on all types of media and ad agencies to deliver sales results to advertisers.
Big and unthinkable changes are ahead for ad agencies, media planners on the agency side and the ad space sellers on the media side as their clients demand sales results for Ad dollars.
An interesting thought on the day of the Facebook IPO and for the weekend. Contact StratoServe.