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Which advertising is worthwhile?

Study reveals a need for German companies to catch up in evaluating the effectiveness of their marketing measures.

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Monitoring the effectiveness of their marketing measures permanently and comprehensively is still a side issue for the majority of companies. Around 47 per cent rate their marketing effectiveness measurement as insufficient. And that is despite the fact that extensive data is available in many cases. A current study by Prof. Dr Werner Reinartz, Dr Julian Wichmann and Dr Thomas Scholdra for IFH FÖRDERER shows that a better understanding of the interaction between channels can make a lasting contribution to a company's success.

Obi is already doing it, and REWE will soon be doing it too: the farewell to the two companies' handouts is on everyone's lips in the retail world - at the same time, the number and complexity of the channels to be played on continues to increase for marketing managers. So how should marketing budgets be deployed? In which channel are communication and advertising measures most worthwhile? In order to be able to answer these questions, marketing managers have to take a detailed look at the effectiveness of the chosen measures. For this year's focus study by IFH FÖRDERER (affiliated institute of the WiSo Faculty), marketers with budget responsibility were asked about their approach to the question of the effectiveness of marketing measures. The study was presented on Wednesday at the "Faszination Handel", which was held again this year on the big stage at the University of Cologne.

"A correct measurement of marketing effectiveness is not a freestyle, but a duty for companies to allocate budgets appropriately, justify expenditures and increase efficiency. Especially in the current time of rising costs and falling margins, this is indispensable for retailers", Werner Reinartz underlines the relevance of this year's focus topic. Professor Reinartz is the Director of IFH FÖRDERER and holder of the Seminar for Retail and Customer Management at the WiSo Faculty of the University of Cologne.

Effectiveness measurement = pain point in marketing
The study shows: Monitoring the effectiveness of the marketing measures used is an important but hardly addressed "pain point" in marketing departments. Around 47 per cent of the marketing managers surveyed for the study, rate the current measures for evaluating effectiveness as insufficient but particularly relevant. At the same time, only 14 per cent of the companies state that they intend to invest heavily in the expansion of effectiveness measurement in the future.

Linking online and offline data is often insufficient
A holistic view of marketing measures across channel boundaries is also clearly expandable in most companies. Only about a quarter of the respondents currently work with a strong linkage of data from digital and non-digital channels. Consequently, only very few companies are able to evaluate the interactions between online and offline measures. For 81 per cent of the marketing managers surveyed, mutual channel effects remain unconsidered.

Time and cost are the biggest obstacles
The obstacles to a regular consideration of the effectiveness of marketing measures are manifold. The biggest obstacles (50 %), however, are the time and resources required. Lack of skills is a problem for one-fifth of respondents, and obstacles due to organisational complexity are cited by about 23 per cent of respondents.

"Even if the diverse requirements for marketing effectiveness measurement seem daunting at first, it is advisable for companies to tackle the topic quickly. Small pilot projects can help to gain initial experience and get a feel for the available data. Think big, start small is the motto here," recommends Dr Julian Wichmann, co-author of the study and post-doctoral researcher at the Department of Retailing and Customer Management of the University of Cologne.

About the study
The focus study 2022 of the IFH FÖRDERER "Measuring and Understanding Marketing Effectiveness" provides an overview of the current state of marketing effectiveness measurement in practice. For this purpose, 105 marketing managers from German B2C companies (retailers and manufacturers) were interviewed about corresponding activities in their companies. In addition to the survey results, the study provides a systematic overview of effectiveness measurement methods and contains practical recommendations for marketers in corporate practice.

The IFH FÖRDERER has been operating as a non-profit association at the interface between science and practice since 1929. They stand for the mutual exchange of content between academic work and the operative world of trade. This exchange is brought to life through intensive networking and regular knowledge transfer. Members of the IFH FÖRDER are trading and manufacturing companies, associations, chambers, service providers and public institutions. The executive committee of the IFH FÖRDERER is made up of renowned heads of trade in Germany.