Return on Advertising: VDDW Corporate Performance Management Initiatives for Results

RESULTS: Initiatives > Return on Advertising



	Initiatives: Overview Pricing Supply Chain Routing Planning & Budgeting Return On Advertising NOP–driven Negotiating NOP–driven Commission & Incentives Sku Rationalization Customer Profitability Market Segmentation Partner and Product Benchmarking Improved Category Management Staffing efficiencies Process Costing

Many companies spend significant dollars on various forms of advertising: television, the internet, direct mail, magazines, newspaper circulars, and more. But which of these forms of advertising return the most bottom-line bang for the buck, and for which products and customers?
The answer to this question affects advertising strategy and helps the company save advertising dollars, guiding the right customers to the right offerings as efficiently as possible for optimum bottom-line performance.
Answering these questions requires the following:
1. An apportionment of advertising dollars to customers, products, and transactions by way of drivers that sensibly reflect fair share of those expenditures. E.g. Share of On-air time, percent-of-page, page prominence, etc.
2. The Net Operating performance of all customers, products, and transactions, which in combination with apportioned advertising dollars yields a simple ratio expressing advertising leverage: NOP / Advertising Spend.
3. Understanding of affinities: which products tend to be bought together in the same transaction, or by the same customer, so as to understand the full sweep and effectiveness (or ineffectivenss) of the ad campaign.
The VDDW approach delivers all of this. One of the key components of the VDDW approach is an ABC allocation engine that handles the required expense apportionments. Further, the VDDW exposes NOP for all customers, products and transactions, and the OLAP layer of the VDDW does an excellent job of combining these measures into the required ratio for leverage analysis, analyzable in ad hoc fashion for any slice of the enterprise, and with exposure of important affinities.