How to Convince Your CEO to Invest in Digital

  |  September 25, 2009   |  Comments

Five ways to make a compelling case that online advertising must be added to your marketing mix.

I recently presented to a major client. The day went really well, and I was riding that high you get after connecting with people in a conference room. Then, the company's CMO approached me. "I loved everything you said today," he said. "But here's our problem..."

Uh-oh, I thought, this doesn't sound good.

"The thing is," he continued, "Most of us get it. But our CEO -- he doesn't believe that digital is imperative to our business. He just doesn't see the attribution."

Ah, yes. Attribution. It's an all-too-common battle digital marketers wage when trying to prove that Web sites, display ads, and search tactics really do directly drive sales.

Some corporate decision makers, whether due to personality, work experience, corporate culture, or other inherent biases, just don't see the direct correlation between digital and profit. And, in some cases, it's hard to blame them.

The data can be misleading, as shown in a report by the Atlas Institute, "Measuring ROI Beyond the Last Ad." The report breaks down the "last ad" reporting standard, a model that gives 100 percent credit for a conversion to the last ad seen or clicked on by a consumer. The reliance on last-ad conversion attribution, according to the report, can "leave publishers and ad networks struggling to prove their value to advertisers simply due to the nature of their site, not because of the quality of their audiences or ability to target."

Many CEOs are apt to rely on more traditional ad techniques (e.g., direct mail, billboard advertising, tele-sales, print ads), simply because "that's what's always worked in the past," or because presented data shows bolder lines drawn between consumer exposure and by purchase. What's lost in the "last ad" standard is the wide exposure that consumers have to numerous ad mediums, and how those mediums affected their purchase decision in intangible ways.

You may be waging a similar war with your CEO over digital spending -- and a negative bias regarding its overall effectiveness. It isn't an easy battle, but there are ways to make a compelling case.

  • Remind your CEO: everyone takes credit for activities that lead to sales -- and that those claims are often exaggerated. Be ready with arguments that show how not one ad method or medium drives conversions, but that it's the cumulative effect of campaigns -- even those that are sometimes unrelated to the campaign. Be conservative, acknowledge the inflation effect, and discount your assumptions to account for this inflation.

  • Use the scientific method. Nothing speaks the truth like raw data. If you want to show the effectiveness of a digital display ad, run a test with a control group that shows a point of comparison for which you can take credit.

  • Partner with your CFO. Who better to know the assumptions and validate expenses and profits than your company's chief financial officer? Get the CFO on board and your argument gains instant credibility with your audience. Create a financial pro forma of the value of your campaigns.

  • Understand external factors. Ad spends and decision may be driven by unpredictable circumstances, such as market conditions, back to school shopping, weather, and competitors.

  • Seasonality. Don't be myopic. See the big picture and argue its influence. Understanding that sales data and trends are driven by things like holidays, shifts in cultural spending habits, etc., will help show the effect they have on your data.

In summary, put yourself in the CEO's shoes, anticipate his/her questions, and be prepared to answer them.

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ABOUT THE AUTHOR

Shane Atchison

In 1998, Shane co-founded ZAAZ to advocate a different approach to Web services — one that respects and delivers on the power of the individual and the promise of Web technologies. As CEO, Shane leads the company's long-term strategic vision of working with leading financial service organizations, consumer brands, startups, non-profits, and community-based organizations, helping each realize the potential of the Internet and its meaningful impact on their business.

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