By Eleftheria Parpis
Where’s the ROI?
If anyone thinks the recession has lowered expectations for marketers to produce financial results for shareholders, think again. If anything, it’s the opposite. “The pressure for companies to produce tangible measurable financial performance [is becoming] greater and greater, especially in a low-growth economy,” said Miles Nadal, MDC Partners chairman and CEO, who hosted an Advertising Week panel discussion titled “How the World Of Return on Investment Has Changed and What It Means to the Industry” with David Kirchhoff, CEO, Weight Watchers, Leon Cooperman, chairman and CEO of Omega Advisors, and Russ Klein, former president of global marketing strategy and innovation for Burger King.
The panelists discussed how to produce positive results during these tepid economic conditions and the marketer’s role in creating that momentum, with both Kirchhoff (top) and Klein (above) stressing that marketing and spending is a critical part of the equation. “Any study worth its salt would say it’s almost impossible to save your way to long-term sustainable shareholder gains,” said Kirschhoff. “Marketing has to be accountable, and it has to drive growth.”
The business climate will continue to prove challenging, said Klein. “We are in for an economic ice age as it pertains to marketers,” he said. “It’s going to be slow growth for a long time.”
During his tenure at Burger King, Klein increased investment in marketing and advertising, he said, by 30 percent, and it helped drive growth. However, he warned, while ROI is critical, the big idea is still the king and can often be executed at lower costs. “Smart dimes beat dumb dollars,” said Klein. While it’s fashionable to talk about ROI, he added, “one has to be careful that it doesn’t get substituted for the importance of big ideas. What good does it do to have money driving a mediocre idea?”
Great ideas are the best protection against rough economic conditions, added Kirchhoff. “If there is any way to put a nice warm blanket around yourselves, it’s simply to do great work.”