The recent decline in advertising spending is not only attributable to the great recession. It is also evidence of the marketing industry getting serious about pursuing measureable results. The days of spray (money) and pray (for increased sales) are fast coming to an end and this is a good thing.
The companies that figure out how to measure every step from campaign to revenue are going to have a very large advantage over the others. By developing a measurement construct that can be trusted, marketers will get the ability to employ a process that looks more like the scientific method.
The scientific method: develop a hypothesis, invent an experiment to test it, conduct the experiment, and evaluate the results. In the end you get a conclusion about the efficacy of the hypothesis – and the experiment can be repeated to produce the same results.
When applied to marketing campaigns such a construct proves its value because resources can be invested in creating and testing of new marketing ideas. And when something works it can be repeated and scaled.
Unfortunately, marketing departments that do not have a trusted measurement construct, meaning they cannot measure each step from campaign to revenue, must resort to measuring whatever they can and it often works like this: look for something good in the numbers, look for a marketing activity that could have created the good thing in the numbers, and quickly construct an argument demonstrating the connection between the activity and the outcome. Unfortunately, this does not produce repeatable results.
Worse yet, it creates the illusion of real measurements so progress towards a trusted measurement construct is drained away.
The central challenge to anyone wishing to be more scientific about their measurements is that the initial investment in building the trusted measurement system does not in itself produce any revenue for the company. With good leadership it can be done and the companies that do so will be well rewarded.