In Search of Advertising ROI: The Impossible Dream versus “Bounded Rationality”

Gale Metzger

Advertising Research Foundation

What do we know about the payout from advertising investments? Well-schooled advertisers know their general return, and they learn more with every ad campaign that is properly planned and tracked.

In 1961, the Association of National Advertisers published a manual, Defining Advertising Goals for Measured Advertising Results [DAGMAR], which provided an informed method to knowing advertising’s return on investment (ROI). DAGMAR was so popular that it was reprinted nine times; not good enough, however, to satisfy those who search for a general theory explaining how advertising works generically. I argue such a dream is just that—a dream that will never come to be. Why? Experience. Most important, I cite the convictions of lifetime advertising professional, Paul Gerhold, and second, my own experience as a career marketing information provider.