Getting more return on marketing investments.
Razzhigaev & Company takes financial responsibility on the outcome of their work.
The advertising market in the Baltic has a shortcoming – only a few take financial responsibilities on the outcome of their work. The fee of advertising agencies and specialists is based on the hours, spent on work, not on the outcome of it. The costs and budgets of advertisers have grown remarkably during the past couple of years, but the guarantee on the work done – probably not.
Marketing agency Razzhigaev & Company, working in three Baltic States, has a totally different view on that matter – they take total financial responsibility on the outcome of their work.
"Marketing strategy that is effectively constructed and realised, gives real results – bigger sales. Other criteria on evaluating the effectiveness of the advertising campaign – creativity, getting the product more known, percentage of people who noticed the message – they are needed, no doubt about that. But if the sales numbers didn’t grow – the overall outcome of the campaign is negative", - says Dennis Razzhigaev.
The ROMI (Return on Marketing Investment) indicator is very important for understanding the effectiveness of the marketing work. Peter Krieg and Kevin Clancy, (www.copernicusmarketing.com), authors of the finalist-book in the competition held by the Marketing Association of the USA, publicised their data on the effectiveness of marketing. ROMI was only 1-4% for the most of the companies.
"Our calculations indicate that it would have been wiser for them to keep their money in the banks rather than wasting it on marketing", – quite unorthodox but still very relevant comment from the authors to their results.
"The effectiveness of around 70% of advertising campaigns, carried out worldwide, can’t be evaluated", – says Alena Andreeva, the program manager of “conducting advertising” at the State University of St.Petersburg.
The clients are getting more and more worried and it’s inevitable to change the rules that have been so unfavourable to them. The appearance of pragmatic agencies who are willing to take the responsibility on the results achieved, together with their client, is the style of the past 2-3 years. The first new style advertising agencies appeared in the US market and after that EU countries followed. Nowadays there are companies in our market, who think of advertising as an investing instrument, not just a form of art. Therefore the time for responsible marketing agencies has come.
"There is only one evaluation of our work – your growing sales numbers. We are oriented on reaching the goal – and the fee on our services is directly connected to the sales results of your company. The fee will be calculated by a formula: net value of our services + bonus", – says Dennis Razzhigaev about the company policy.