A new report on the importance of advertising and marketing to Irish companies has revealed that every €1 invested in advertising delivers a net return on investment of €5.44 and a gross return of €8.26.
The report, Marketing Multiplied, was published by Core Media in association with the Association of Advertisers in Ireland (AAI) and was written by Core’s CEO, Alan Cox and economists Jim Power and Chris Johns.
The report also highlights the important role that advertising plays in a market economy. “It provides consumers with information; it improves consumer choice and consumer welfare; it enables producers to increase sales, thereby boosting revenues, employment and overall economic activity; it enhances competition and can erode excess profits by increasing competitive forces,” the report notes.
It also highlights the role and value that creativity plays in in marketing communications, says that it is quantifiable.
“Of all the factors that are within the marketer’s sphere of influence, this is the most important by far. The choices made in relation to investment in creativity have a profound impact on the growth in profitability of brands. Creatively-awarded campaigns are six times more efficient than non-awarded campaigns in growing market share,” the report found.
Marketing Multiplied also noted that the size of a brand has a major impact on the efficiency and effectiveness of marketing communications and that “large brands have inherent advantages over smaller brands; they have higher penetration, better distribution, stronger range and pricing strategies that help to maintain and increase share.”
It also highlights the dangers of short-term marketing and its impact on profitability. “Long-term campaigns are approximately three times more efficient than short-term campaigns. Short-term initiatives are more effective at driving transient sales effects, but they deliver weak long-term growth,” the report says.
The report also called on marketers to “up their game” and that advertising and media agencies needs to provide them with more support and the evidence they need to prove their worth in the boardroom. “Marketing tends not to be taken as seriously by corporate boards as it should be. The reason for this has been the absence of quantified, credible evidence to demonstrate how essential marketing is to the long-term growth and profitability of businesses,” according to the report.