The return on marketing investment can be difficult to quantify, but the Central Office of Information (COI) has had a go.
The COI today publishes its first-ever paper calculating the financial effectiveness and efficiency of public sector marketing.
The report outlines a 10-step process that shows that by adopting a common approach and a series of universal definitions to ensure practitioners adopt the same terminology, it is possible to calculate the financial benefit delivered by marketing and the return in investment, which the COI measures as the number of pounds of payback delivered, less the cost of the marketing.
Done well, analysis of these measures can be used not only to better demonstrate the role of communication in helping deliver successful policy objectives, but also the real value to the taxpayer.
As an example, the paper shows that the 1998-2005 teacher recruitment campaign not only paid for itself, but should also provide returns of another £85 for every £1 spent. The tobacco control campaign, is estimated to have saved the economy £7.1bn against an advertising spend of £49.3m between 1999-2004.
The study is thought to be the first of its kind. Developed in collaboration with two leading practitioners in the field of marketing evaluation, Les Binet, of advertising agency DDB, and Sarah Carter, it aims to stimulate discussion among government, the marketing industry and academia.
Evaluation of the return delivered on investment by public sector marketing is already carried out across government, in some cases very well, according to the report, but such evaluation is carried out inconsistently in terms of methodology and approach. While not all communication interventions are suitable for a monetised approach, the authors argue there should be at least common, and, at best, universal, practice across government.
The authors recognise that the two most difficult steps in calculating payback and the return on marketing investment are isolating the effects of marketing from the effects of other factors, such as legislation, innovation in public services and changes in the economy, and putting financial values on the outcomes.
However, the paper asserts that the majority of benefits to society can be ascribed a financial value. It uses real examples, such as the savings in treatment costs to the NHS from reducing smoking, and the reduced cost to administering the tax system from encouraging on-line self assessment to demonstrate this.
The document can be downloaded from the COI website at coi.gov.uk/ROMI
