If you cannot measure it, there is no point in doing it.
Or so goes the case for measuring the return of our
investment, whether in dollars or time, for any given marketing activity. It is
good actually. Technology has been an enabler for marketing to drill down to
the microscopic level of marketing. However, the focus on a granular level has
taken away the vision to the bigger picture. Why?
Because, we’re evolved!
What’s the ROI of the flight delayed for a son to see a
dying mother?
What’s the ROI of a smiling usher in the restaurant?
May seem a complicated question to ask. But, an employee
smiling at a customer doesn’t cost anything. The customer experience has so
many possible touch points today that it almost seems impossible to measure a
true financial ROI.
ROI’s roots are in evaluating one-time capital projects.
“But is marketing a one-time capital project?” Clearly not! ROI is a useful
starting point for sizing up any investment. Remember that ROI is a historical
measure, meaning it calculates all the past returns. The point is that an
investment can do very well in the past and still falter in the future.
"When we work on making our devices accessible by the
blind," he said, "I don't consider the bloody ROI."Tim Cook
If marketing’s mandate is to maximize ROI, there is every
incentive to never do anything new at all.
Marketing is a science of uncertainty and an art of
probability :
ROI by itself says nothing about the likelihood that
expected returns and costs will appear as predicted. Neither does it say
anything about the risk of an investment. ROI simply shows how returns compare
to costs if the action or investment brings the expected results. Therefore, a
good marketing investment analysis should also measure the probabilities of
different ROI outcomes. It is important to consider both the ROI magnitude and
the risks that go with it.
The Citizen Brand :
Headline Findings in a recent 2017 study includes the
damning facts that people wouldn’t care if 74% of the brands they use just
disappeared and that 60% of the content created by the world’s leading 1,500
brands is “just clutter” that has little impact on their lives (or business
results). Instead of customers, propositions and activation, brands need to
embrace the new three P's of marketing: people, purpose and participation. This
is the future of marketing. This is the ‘Citizen Brand’.
Are we prepared for the world beyond ROI?
The pursuit of a perfect ROI calculation will exhaust the
very resources that are supposed to deliver ROI.
We have uncertainty all around the plate, probability is the
new ingredient and AI seems to be the sauce that will perfect the taste! The
development and testing of new attribution models that move away from last
touch and toward more comprehensive assessments, which includes multiple
futures, will be the way forward. These models will eventually impact how
marketers measure ROI and plan campaigns. New AI-powered algorithms will be
tested to determine entirely new ways to create meaningful experiences and then
define and measure the REAL ROI.
“Even though you are
on the right track, you’ll get run over if you just sit there”. Will Rogers.
What are the multiple futures that could turn a marketing
plan upside down?
Read more about this in my book “Do Butt Clicks Count? Why Marketing is a Bad Investment”