NEWS2 April 2020

Sales key KPI for advertisers, finds ARF survey

Media News North America

US – The majority of US advertisers view sales as the most important key performance indicator for evaluating advertising return on investment, according to a study from the Advertising Research Foundation (ARF).

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Over half of advertisers surveyed in the research ( 54% of larger companies and 55% of smaller companies) said sales is the most important KPI.

Brand equity is the second most important indicator of effectiveness, according to the research – 43% of larger organisations, 39% for smaller.

According to the research with large ( 10,000 or more employees) and smaller US advertisers (fewer than 10,000 staff) found that the majority of respondents ( 92%) say they have a department called consumer research or insight.

Over half ( 53%) of larger advertisers and 30% of smaller advertisers say they have a decentralised research structure and turn to additional departments for research insights, such as marketing or strategy/planning departments.

Advertisers with decentralised insights departments are more likely to be dissatisfied with their data science operations ( 30% somewhat or very dissatisfied). Over a third ( 38%) of respondents claim to be spending about the same on insights and data science as they did the year before, while 28% said they are spending less.

For both larger and smaller advertisers, advanced analytics/statistics is the top technical skill sought ( 81% and 56%), followed by basic analytics skills.

Paul Donato, chief research officer, the ARF, said: “Sales is the most important KPI according to respondents ( 54% of larger companies and 55% of smaller companies). This is in contrary to what Les Binet and Peter Field have argued, that long-term brand advertising should be 60% of the advertising goal, and 40% should be target sales activation.”

The report from the ARF is the first in a series focusing on agencies, media, research companies and consultancies.