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Accounting for Your Advertising
by Sudhir Kale

Accounting for Your Advertising
By Sudhir Kale, Ph.D.*

Half the money I spend on advertising is wasted, the trouble is I dont know which half.
-- Attributed to John Wanamaker, U.S. Department Store Merchant (1838-1922).

I have always been intrigued by how little accountability casino companies place on advertising expenditures. It is not at all uncommon to see a casino spending between five to ten percent of its annual revenues on advertising. Yet, ask any marketing VP in the casino industry what the impact of advertising has been, and youll get answers such as, Everyone among the senior executives likes the ads, or, All my friends think that our advertising is really funny.

You certainly do not want to judge the effectiveness of multimillion dollar outlays based on what your colleagues or friends think (unless, of course, they fall squarely in the market segment that youre trying to impact through advertising). Advertising is conducted for one primary reason  to attract and retain the right customer. An advertising budget is not an endowment fund set up for trialling the agencys creativity, advertising is not a device for senior management to feel good or for inflating executive ego, it is most certainly not a charitable contribution for TV stations to produce and air expensive shows.

So, if you want to earnestly assess the effectiveness of your advertising, the place to start is to comprehend the various customer segments your property wants to target and the relative importance of each of these segments to your bottom line. Doing so will establish who you are trying to communicate with through advertising.

The next step is to ascertain what message you want to convey to the targeted segments. Do you want to announce the change of menu in your award-winning restaurant or do you want to remind your customers of the shopping experience that your arcade provides? Or, do you want to stick to the basics and simply remind your prospective customers of your brand name?

Determining what to say in advertising is never easy. It depends on the characteristics of your target market (seniors looking for a day out or young professionals wanting to paint the town red on a Friday night), your revenue mix (gaming vs. non-gaming), your competition, the composition on your gaming profits (whether the Pareto principle holds), and the positioning of your property. Also, the message conveyed in your advertising should complement and reinforce your communication through other media (direct mail, web, and publicity).

Having determined what you want to say, the next step is figuring out the best way in which to convey your message (this is where the creative agency minds come in). Do you want to use emotion of a life-changing experience or would you rather settle for humor where the girl next door metamorphoses into a high rollers moll? Do you want to inform your audience of your product offerings or are you looking for some transformation (creating warm feelings or affect) in the minds of your targeted customers or prospects? The how of communication should be consistent with the brand image you are striving to project.

Having figured out the who, what, and how of advertising, the next step is to test the advertising both before the ads are actually aired, and after the campaign has run its course. Ad testing should include testing for the brand attributes as well as for the various components of the ad, and this can be done either in a laboratory setting or in the real world.

While most executives are in favor of ad testing and evaluating campaign effectiveness, the exercise is often relegated to the advertising agency. This is analogous to students grading their own exams! True unbiased testing is only possible when it is conducted by someone who has no conflict of interest with the agency that produced the ads. The results of tests should be compared with the promotional objectives for the ad campaign. The more specific and quantifiable the objectives, the more help they provide in designing the ads as well as in determining advertising effectiveness.

The ultimate acid test when it comes to advertising is the impact of ads on the casinos revenue and market share. Remember, advertising money is not entertainment money. The mandate of advertising is to attract and retain the right customers to your property and to ensure that brand loyalty is engendered and constantly reinforced. If a campaign repeatedly fails to meet the revenue/market share test in a conclusive manner, fire both your VP of Advertising and your ad agency. Free yourself of the John Wanamaker Syndrome and insist that 100% of your ad dollars work for you 95% of the time. If you are unsure as to going about it, send me a CD of your TV ads and we can talk.

______________

Date Posted: 11-Jul-2005

*Sudhir H. Kale, Ph.D., is the founder of GamePlan Consultants (www.gameplanconsultants.net), a full-service marketing consultancy that specializes in casino CRM, customer service, and marketing strategy. Sudhir has consulted and lectured extensively in Asia, Australia, Europe, and North America. He also teaches marketing in the Faculty of Business at Bond University in Australia. You can write to Sudhir at skale@gameplanconsultants.net.

 
 
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