Any marketing guru's here? Return on ________?

[Chills1994]

Hi all,

There was another thread recently about how expensive a certain brand of tactical flashlights are. We've all seen the full page full color ads in the "gunzines". So marketing costs or budgets have to be huge.

Considering how a business's finances can be easily crunched in an Excel spreadsheet, I am wondering if there is a specific business or marketing term or phrase similar to "return on investment" that describes a metric for how successful your marketing is.

Said another way, somebody way high up the food chain at Surefire can look at the numbers and say, "On average, we spend $25 in advertising to sell one $100 flashlight."

I reckon there has to be a name or buzzword in business circles for that particular metric.

Thanks!

[gunguru]

I'm a professional accountant, and no, these metrics doesn't exist specificaly. But it may be used and calculated as a part of a dynamic balanced scorecard or management accounting. But it's not a ratio used globally.

I know some companies may use ratio like this, ex: GM pension programs cost about 5000$ on each car sold

[ctay]

I'm both an Accountant and a PR / Advertising guy (What the what?). Generally in this industry we talk about ROI in terms of impressions. IE it cost X $'s to get y impressions. Impressions are supposed to be (this is debatable) eyeballs looking at your ad. We then try to dream up ways to find out how many of those eyeballs eventually purchased our product or acted on our message. This involves lots and lots of statistics and wild ass guessing until you get to a number that you can use to support the continued use of your services.

I'm sure Surefire is calculating a the ROI of their advertising and I suspect that it is worth every penny. Good advertising is worth its weight in gold. Bad advertising is worth its weight in aluminum.

Additionally, traditional advertising such as the gun rag ad's is not worth as much as word of mouth advertising (social media, forum posting etc etc). Earned media like this is much more effective for nitch industries such as ours. Look at all the topics here on which gun or sight or holster should I buy. Every one of those ends up being a free ad for someone... And an ad that will most likely turn to a purchase.

Chris

[Chills1994]

ctay wrote:

....Impressions are supposed to be (this is debatable) eyeballs looking at your ad. We then try to dream up ways to find out how many of those eyeballs eventually purchased our product or acted on our message....

That is exactly what I am looking at or looking for.

I posted a classified ad here on BE recently, and checking the number of views the thread has received, it is up around 700 now.

So, I am guessing maybe....maybe 500 people actually saw my ad here. There were probably some repeats. Then all the other forums I posted it on, I reckon at least 1,000 people have seen it. I am guessing that if I had PayPal set up that would help.

It leaves me wondering......