“Putting a Value on Marketing Dollars” by Brian Steinberg, Wall Street Journal

Published July 27, 2005

Ad executives long have snickered at the old adage: Half of all advertising is wasted — but finding out which half is impossible.

Now, with corporate spending coming under more scrutiny, getting the answer is no joke.

Interpublic Group, the advertising holding company, is forming a new unit devoted to helping advertisers figure out just what their marketing dollars do. Known as the Marketing Accountability Partnership, the unit will be run by Neil Canter, a former Accenture partner. He will report to Stephen Gatfield, Interpublic’s executive vice president of global operations and innovation, and Interpublic Chairman and Chief Executive Michael Roth.

The idea, says Mr. Canter, is to examine how an advertiser spends money — on media or public relations, for example — and determine whether those dollars accomplish anything or can be reallocated to gain better results.

Interpublic is reorganizing some of its businesses so pieces of other operations that conduct this sort of measurement work will report to Mr. Canter. Among the offerings will be brand valuation Interpublic is reorganizing some of its businesses so pieces of other operations that conduct this sort of measurement work will as well as analysis of media, direct-marketing and public relations. “If you can show the value of what you are doing with analytics,” advertisers will be more responsive, says Mr. Roth.

Among advertisers, pressure is mounting to find data demonstrating that advertising helps increase market share, improves sales and heightens brand awareness. With direct marketing and Internet-based advertising proving relatively trackable, marketers want proof that other sorts of promotions work, too, says Arthur Anderson of Morgan Anderson Consulting, a New York firm that works with advertisers.

“Companies are more than ever trying to understand the value of every dollar” so they can explain ad spending to investors and corporate officers, says Julie Roehm, director of marketing communications for DaimlerChrysler’s Chrysler, Jeep and Dodge.

Interpublic rivals offer similar services. WPP Group’s Kantar research unit boasts these sorts of capabilities, for example, as does WPP’s MindShare media-buying operation. In a world where traditional outlets such as TV are proving less effective and where promotions at the retail level are taking on more importance, advertisers are seeking more information about how to tackle such things, says Fiona McAnena, Kantar’s development director. Publicis Groupe’s media operations also offer such measurement services.

Interpublic’s Mr. Canter says he hopes his company can offer a “broader perspective” by housing things under a corporate-level umbrella.

The push for more quantitative analysis of the effects of advertising is prompting new sorts of deals. Court TV, the cable outlet owned by Liberty Media and Time Warner, has struck ad deals with media buyers, such as Publicis’s Starcom MediaVest and Aegis Group’s Carat, that call not only for certain ratings guarantees, but also for a measure of how much attention viewers pay to ads. The pacts vary with the media buyer and depend on certain kinds of third-party data, says Charlie Collier, executive vice president and general manager for advertising sales at the cable channel.

During this drive for accountability, Interpublic is also striving to build up its own. The company has been the subject of a Securities and Exchange Commission probe since late 2002, and has been plagued by accounting problems over the past couple of years. It hasn’t officially reported earnings since the third quarter of 2004, and must update its results for investors and creditors by Sept. 30.


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