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Marketers Are Confused About ROI, Are You?

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Turns out the commenters over at Spin Sucks who didn’t know how to define ROI as based solely on dollars are not far off from many a marketer, according to a study by the Columbia Business School Center on Global Brand Leadership and the New York American Marketing Association.

By way of background, my friend Jenn Whinnem who is a contributor here and member of this community wrote a guest piece for Spin Sucks about the Connecticut Health Foundation and which metrics they tally that contribute to campaign success.

A major side conversation in her post’s comments ensued about whether metrics not attributable directly to dollars should be referenced as ROI at all. About 85 percent of commenters favored ROI as strictly dollar oriented while a portion of those who spoke up wanted to honestly know why ROI couldn’t be oriented to other types of measurement, as well.

In the March 12, 2012 Advertising Age, the cover story, Marketers Don’t Practice ROI They Preach, informs about results of a study that suggests marketers aren’t as buttoned up about ROI as the commenters in the Spin Sucks community would have you feel.

The major outcome of the study taken directly from the Ad Age article is this:

“For all marketing’s obsession with ROI, it’s not used to set budgets.”

and

 “The state of the art remains surprisingly primitive.”

Interesting, eh? The discussion at Spin Sucks was heated yet collegial. Had I had this article tapped, I could’ve pulled it in to the conversation in comments (or, because ROI wasn’t on my radar until now, I wouldn’t have!).  Let me share a few more bits of data from the survey as detailed in the magazine:

  • 22% of respondents use the most basic measure — brand awareness — to gauge marketing ROI without necessarily determining even whether the awareness is positive.
  •  50% of respondents didn’t include any financial outcome when defining marketing ROI.

Brighter Light Bulb

Don Sexton, marketing professor at Columbia Business School, stated in the article that “a lot of people…don’t have a clear idea of what marketing ROI is. A lot of them use metrics that don’t measure finance at all.”

These other metrics used to measure ROI by more than 1/5 of marketers surveyed (243), according to the Ad Age article are:

  • Brand awareness
  • Boss’s satisfaction
  • Reach and frequency (regardless of whether it affected sales)

(Social media data (in spite of mass quantities) isn’t being used to measure financial metrics said the survey.)

Conclusion

The pulse of the Spin Sucks community on the definition of ROI seems to represent what this article and the survey results speak to.

  • There is absolute confusion about how to implement marketing ROI and align it back to dollars.
  • There is absolute confusion about the definition of return on investment.
  • Somewhere along the way, use of the term, “ROI,” loosened to include metrics not associated with dollars.

ROI of a Webinar

Let’s take a look at a mini-campaign — a webinar to generate sales. In between the start and the end point are customer touches that influence sales and hopefully generate a purchase at some point in the sales cycle.

  • Webinar invitation list to prospects and current customers
  • Follow-up post event with a survey
  • E-mail marketing push with the on-demand webinar
  • Content to further interest the prospect in a product
  • Sales team queries to webinar attendees
  • Product demonstrations completed
  • Customer buys the product (at some point)

There are many opportunities in this scenario to track metrics that help influence sales:

  • Number registered for webinar
  • Number that attended
  • Number of completed post-event surveys
  • Percentage of positive survey responses
  • Number of product demos scheduled

But, the only true assessment of ROI for this webinar is whether a customer bought a product — that is pure and true ROI. The total number of dollars exchanged to make a purchase is what defines ROI. The other numbers, as suggested above, are metrics that contribute to the success of the campaign and help measure its effectiveness or influence on sales.

 

What is your opinion about ROI and how it’s used or defined in your organization?

 

 

Analytics Make Social Marketing Complex

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I just read John Obrecht’s opinion column in BtoB April 9, 2012 on Thriving in the Age of Complexity. He shares how marketers’ bane is the complexity of social media marketing; trying to teach everyone and give them the tools to dive in while mastering the complexity of all the channels, not to mention the ROI of it all.

Indeed. And, he got me thinking; always dangerous.

There are all those lovely back-end numbers hidden from view that people call analytics. They comprise those data-driven reports that many   people salivate over. Analytics make Google rich, and they make me suspect. Are those numbers real or skewed? Did you really get that many people to your webinar? How many qualified sales leads downloaded that white paper off that new landing page you just developed and published?

How about if I go to Clicky and see that 10 people from Canada and 80 from The Netherlands (because I was writing about Dutch tulips) read a post I wrote and stayed on my page three minutes. What can I do with that information? Should I keep on writing about flower bulbs from Holland which is not my primary expertise or service offering to satisfy higher analytics? Or, should I come back to center and write about   which everyone seems to want to know more about (based on analytics reports I see on occasion).

I was talking this week to a colleague being asked to drum up numbers from a few years ago to justify the success of various marketing campaigns. Why? I’m thinking the people at the quarterly meeting don’t care much about what happened in the past; they’d likely prefer to know which marketing campaign is planned for the future with how many built-in touches and success metrics.

The need for proof points, data, numbers that say W00t! and other analyses that contribute to complex interpretation with nary a consensus makes me cringe.

My PR measurement peers will smack me around when I say that, so let me clarify. I like to prove my program worked; I love to have solid and measurable results that support my strategy and help me earn my keep. But, there are many unnecessary layers of analytics blanketing a creative campaign that most practitioners can’t deep dive into for lack of where to start and how to skin the cat.

Just read John Obrecht’s column. He references a bunch of marketers at Digital Edge Live, an industry show, who “are charged up about their work,” despite massive upheaval and the generation of “big data.”  Obrecht’s conclusion, though, calms nerves; “Despite all the complexity, this does indeed seem the best of times to be a marketer. It’s that simple.”

What do you think? When was the last time you used an analytics report or data to prove your campaign or support a new approach? Was it a one-off situation or do you frequently abide by analyses to win consensus? Is your company or website generating mass amounts of data you can’t begin to decipher?

Here’s my conclusion… Do embrace the analytics to an extent, but keep your distance. Too many numbers is like having too many cooks in the kitchen. I’m impressed with numbers, and I’m even more impressed with someone who can work them. We all know that a good analyst can make numbers work for just about anything, but, a one-time analysis that proved a campaign was successful last year doesn’t help me tomorrow.

This post today? Everyone can argue I’m dead wrong; there are so many others saying and publishing the opposite who live and die by analytics – SEM anyone?

 

 

 

Attend Social Slam April 2012

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Social Slam 2011

Last year I presented at Social Slam in Knoxville (see me at left with Ann Deeter Gallaher and Trey Pennington (RIP)); the inaugural regional blast-of-an-event you can’t miss this year. The event is going to be the best gathering of IRL social media mavens, rock stars, A-listers (yes, all the names you’re not supposed to use) you’ve been interacting with during the past year.

Please join me and so many others in this community and beyond on April 27, 2012 in Knoxville. We’re having a Tweet Up Thursday evening, so you can’t miss that, either! (Of course, it’s AFTER the VIP pre-party; 10:15 p.m. at a location TBD).

Tickets to attend are the lowest ever and quite affordable. Knoxville is a hop, skip and a jump from most states east of the Mississippi (I sang that as I typed it so I’d know how to spell it).

What’s more, the line up of speakers promises to be worth it so you can say you met them IRL. I’m so excited to see everyone this year, and you’ll get to meet up/tweet up with the likes of these keynoters:

  • Mitch Joel — keynoter and amazingly articulate “digital rock star” who founded Twist Image; he’s going to address the Six Pixels of Separation that define the social mediaosphere.
  • Mark W. Schaefer — my buddy from the earliest days of Twitter in spring 2009 when we launched together and became fast friends. It’s his expert tutelage that drives he behind-the-scenes of this fabulous event and he does a grand job as emcee, too. He’s over at his Grow blog beating the bushes with books, presentations, video,  and lots of insight.

Also IRL and presenting lots of grand content in sessions are some of these you may recognize:

  • Jay Baer — author, blogger, social media rock star who writes over at Convince and Convert; we saw him last year and he did rock the house.
  • Tom Webster of Edison Research who is accessible @Webby2001
  • Marcus Sheridan of The Sales Lion
  • Stanford Smith, Pushing Social
  • Sean McGinnis of DotCoLaw
  • Billy Delaney

There’s tons of great content; the audience numbers ~400, and the chance to meet everyone up close and personal is the best opportunity ever. When you can only share words on a post with folks and no one gets to touch a hand or give a hug, something is missing. That’s the prime reason I’m going…so shake a leg and join me! Seats are still available!

 

The Apple, The Tree And JCP

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About a month ago, I had a blog post written in long hand to post here and never got around to it. I’m glad I waited; there’s so much more proof that my admiration of all things Apple isn’t just a passing fancy.

Awhile back, I also wrote a little series on creativity. In that series, I wrote about Nest, the new thermostat innovated by former Apple executives. The website was fresh, clean, and sparkling. The product, Nest, is still on my wish list — a thermostat with a brain that programs the temperature in your home for you once you’ve entered a few settings.

Today’s post is about another former Apple executive taking the reins as CEO over at Jacque Pennier or J.C. Penney, Inc. or JCP, as it’s now commonly called in marketing campaigns.

If you’ve not seen the new JCP direct mail campaigns sashaying in your door via snail mail, you’re living under a rock. As soon as I got the first one, I couldn’t put it down; I was so impressed. Inside, within the ads for apparel and other goods, were the typical storytelling snippets introducing sections oriented to demographics.

The major thrust and branding adjustment, though, was how Ron Johnson turned the image of dowdy JC Penney into something fresh; can I almost say sophisticated feeling?

Each mini catalog I get appeals to my sense of color, makes me smile at the vibrant energy coming off the pages, and it has people talking, too. My personal trainer asked me if I knew that JCP has sale dates on the third Friday of the month now and not every day with coupons.

The point to all this is simply, the Apple doesn’t fall far from the tree. Innovation, creativity, making customers excited about mundane products, and turning brands upside down and inside out to rescue them from the horse’s trough is brilliant.

And, the critics had some ho-hum to say, but the company’s stock soared to $38 buoyed by a rosier outlook. I’d say when a former Apple somebody or ‘nother decides to take a job somewhere…uhmm, that’s a trading tip to run and buy some stock, wouldn’t you say?

PR V Marketing: Same Goals, Different Tactics

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(This post is going to have too many first-person references for my liking, but it’s a relevant discussion and one I can’t make well in the third person; my apologies in advance!)

When I discuss differences between public relations and marketing, I cause trouble. People have a difficult time understanding what all the fuss is; I’m not here to exacerbate that, I’m trying to clarify. The best way I can do that is via my experience.

I have worked in PR 27 years as an agency brat (18 years spent in Chicago) my entire career.  After a stretch, PR began to evolve; practitioners knew that marketing was where the profession was integrating. I made it my goal to become more marketing-esque, and when a recruiter from a large PR firm told me my resume looked more marketing oriented, I was happy (she wasn’t).

In a recent conversation I had with Scott Quillin of New England Multimedia, he made a spot-on statement. I have to share: In order to understand the differences between marketing and PR, you have to have solid experience in both. Indeed.

I work as chief marketing officer for one client and as a brand marketing manager for two others. The core of what I deliver each day, however, is derived from public relations — my profession.

I caused a bit of trouble recently over at Shakirah Dawud’s house in a guest post in which I suggested marketing writers and PR writers offered two different styles of writing. That article was re-posted twice on Ragan.com, and the comments were intense.

A commenter at Shakirah’s said, “Personally, I think we should stop talking about marketing vs. PR in regards to…pretty much anything.”

I respectfully disagree. I do so because my feet are firmly planted in both disciplines working every day in both. And, I asked my new client several days ago, “Which hat do you want me to wear for you, PR or marketing?”

Because the deliverables are different; the thinking is different but the outcome is the same. Regardless of whether you work in PR or work in integrated marketing, the end game is ROI, measurable results, business goals, sales, leads, and more.

My approach to get there is what may be a tad different, depending on which side of the aisle I’m walking (the right, the left, or in the middle). Do these examples below help or hinder an explanation?

A software developer wants to push its software to accounting firms.

As a PR person, I would:

  • Hit the product team to find new features about the software that differentiate it from the rest of the industry
  • Hit the industry to find data and research to support my new product
  • Interview the chief spokesperson for a really good quote
  • Draft a news release/story
  • Identify some outlets that may cover my story
  • Pitch my news with industry trends.
  • Distribute an online press release to further news distribution.

As a marketer, I would:

  • Invite a client to join a panel on a webinar
  • Invite attendees to this free event by an email marketing campaign, newsletter, or a LinkedIn group announcement;
  • Interview a consultant or other client to draft a white paper for download and lead gen on a website
  • Prepare spokespeople for the upcoming tradeshow event to meet customers during a breakfast.
  • Polish the product literature and deliver it in time for booth training at the tradeshow where we will hawk our software to prospects.

While these lists may not sound so terribly different, in the corporate sector, each is the purview of a separate department. I do both and I tip my hat in either direction because my core training drives my deliverables.

Have I caused more confusion or per chance was this helpful?