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Category: ROI - Return on Investment
Faced with higher prices on everything from groceries to gas, shoppers have known for several months what the government officially conceded this week: the
U.S. economy is in a recession.
In an environment where budgets and jobs are being slashed, establishing ROI takes on an increased urgency. No surprise that even the lowly coupon is enjoying a resurgence in with consumers, even with those one might think would be least likely to use them.
Comscore blogger Gian Fulgoni posts that growth in unique visits to coupon sites is up 25% and 37% for households earning $40k-$99,999 and $100k+ respectively Q3 2008 versus a year ago. In comparison, coupon usage among households earning less than $39k has risen just 16%.
There’s no clear reason that growth among visits to coupon sites is up higher among mid-to-upper income households, but Fulgoni points out that the good news for marketers is that the greatest growth in increased visits to online coupon sites is “in the mid-to-upper income households where substantial purchasing power resides.” Also it’s easy to measure the success of couponing.
I’ve known many marketers who wouldn’t even consider the use of a couponing campaign.. With all the options available---from newspaper and magazine coupons, free-standing inserts, flyers, online coupon sites, email campaigns, direct mail, register tapes, even gas pumps---and evidence that coupons appeal to a wide range of consumers, it might just be time for marketers to shelve those stereotypes and consider incorporating a coupon promotion in their marketing plan.
Related:
This Season’s Must-Have: The Humble Coupon , New York Times 12/3/08
Marketing Tactics: Couponing for Success, Brandeo 7/30/2008
Internet Coupon Use Up 83%, but Sunday Newspapers Remain Top Source, Marketing Charts 7/17/08
Trends: A Resurgence in Couponing, Brandeo 7/3/2008
Most Plan More Coupon Use in a Recession, Many Attracted to Paperless, Marketing Charts 4/7/08
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Use this free budget template to plan and track your 2009 marketing spending.
Easy-to-use Excel spreadsheet provides monthly, quarterly and annual projected versus actual spending, for categories you specify.
To download: Click below, on the file beneath "Attachment"
Click here for more downloadable templates.
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California-based research firm, Integrated Media Measurement (IMMI), offers cross-media, cross-campaign advertising effectiveness measurement by using a consumer’s cellphone to measure exposure to television, radio, computers, mobile phones, DVDs and movie theater advertising. The technology enables marketers to assess the cumulative effect of a campaign, rather than each medium singly, to help evaluate marketing efforts. The WSJ says IMMI customers include movie studios and broadcast networks such as NBC Universal, owned by General Electric Co. (GE) and ABC, owned by Walt Disney (DIS).
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CAGR (Compound Annual Growth Rate) is a measure of the rate of return on an investment; it describes the rate at which your account grew as though it had grown at a steady rate.
For more information on CAGR, including how to calculate it, see this great mini-tutorial at Fool.com.
Source: Fool.com
The average number of purchases by a single buyer within a specified timeframe.
Total revenue expressed as a percentage of all revenue.
EBITDA is one of those terms that marketers really need to know.
You are most likely to hear it used when companies are analyzing or reporting financial performance, particularly cash flow. EBITDA stands for “earnings before interest, taxes, depreciation, and amortization.”
The formula is:
EBITDA= Revenue – Expenses (excluding interest, tax, depreciation and amortization)
The idea behind EBITDA is to provide a true picture of future potential profitability of a company, particularly a young or fast-growing one, before expenses from creditors are taken into account. It is used by some investors as a substitute for net margins.
Although many companies use EBITDA some experts believe that the use of EBITDA leaves out many expenses so it is not an accurate measure of profitablity. They point to two main problems:
- It is not a proxy for cash flow, even though some companies use EBITDA and cash flow interchangeable, because it doesn't measure actual cash flowing into a company.
- Specifically, EBITDA does not take into consideration:
- Variations in accounting methods
- Cash required for working capital
- Debt payments and other fixed expenses
- Capital expenditures
According to Fool.com, Free Cash Flow (FCF) is a better way to evaluate cash flow.
Whichever term your company utilizes be sure you understand it so that you can be knowledgeable about your company's financial health and performance as well as how marketing impacts it.
Source: Fool.com
