Determining Advertising Return On Investment (AROI) for Aviation Marketing

If you don’t know what you are measuring, how can you measure it?

CFOs and CMOs must agree on what to measure when determining AROI.

The largest line item and most visible part of your Aviation Marketing program is advertising. Yet there is considerable confusion in understanding advertising’s impact and measuring its accountability.

Pick up any business publication and chances are there will be an article about the death of outbound marketing, namely, advertising. Much of the angst associated with aviation advertising is based on measuring the effectiveness of advertising and the best way to build those data chains.

Advertising ROI starts by answering these 3 questions:

  • If you don’t know what you are measuring, how can you measure it?
  • If you don’t measure it, how can you manage it?
  • If you don’t manage it, how do you expect to get it funded?

Understanding Advertising ROI requires you to differentiate between Advertising RIO and Marketing ROI.

All advertising is a marketing activity. However, advertising is not the same as marketing, and many marketing functions have nothing to do with advertising.

In the absence of external marketing factors, advertising is best judged in 3 areas:

  1. Awareness
  2. Attitude
  3. Behavior

John Phillip Jones, in his book, “How Advertising Works,” lays the foundation for defining advertising as a “multiplier” that can leverage other properly executed elements in the marketing mix (inbound and outbound) to create a brand that is stronger and more valuable than it would be in the absence of advertising. 

The interchangeability of the two terms (marketing and advertising) contributes further to the confusion. Many aviation CEO’s and CFO’s lump marketing and advertising together, making it harder to define Advertising ROI’s financial accountability. In addition, there is still the tendency to apply short-term marketing metrics such as sales, market share, or brand profitability to the advertising function.

Internal marketing functions that can skew the interpretation of advertising’s financial accountability include:

  • Lowering the price of the product
  • Improvements or innovations in the product line
  • Brand/product line extensions
  • New product introduction
  • More distributors/global foot-print
  • Customer incentives
  • Positive PR integrated with inbound social marketing activities

It is accepted that advertising has a positive effect on the brand over time, called the “carryover effect.” It is also understood that the considerable benefits of advertising are not immediate but are more cumulative and predictive of long-term brand performance. For aviation marketers this is especially true in the considered purchase sales cycle where there is high involvement of multiple purchase influencers and decision makers. 

Reference: Don L. Dixon, Director of Advertising Management, Portland State University. You can click on the following link to purchase a copy of the report, “Advertising Metric and ROI: A Guide to Improving Agency Accountability and Effectiveness.” 

photo credit: mag3737 via photopin cc

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