15 Comments

Dear Marketing World: ROI is NOT A Unicorn

8472794550_2c0024b4bd_mIf you use Facebook often, you may have noticed that on occasion, Facebook will show you a “recommended page” to like right in the middle of your news stream. Some of the recommendations I have gotten have been downright strange, and usually I completely ignore them. However, as I was scanning through other day, I saw a note about an ROI e-book from a company called Infinigraph, a software company. In fact, here is a screen capture of the post that was previewed for me:

Screen Shot 2013-02-28 at 11.02.27 AM

This looked promising. Even though the phrase “content marketing” is already tired, I was interested in the idea that someone was finally trying to tie real metrics to this marketing concept. Here’s the problem though. When you actually download the free PDF, this is what you get:

Screen Shot 2013-02-28 at 11.06.13 AM

That’s not exactly how the e-book was previewed, right? Confused, I decided to check out the table of contents to see what these “20 areas of excellence” were:

Screen Shot 2013-02-28 at 11.09.25 AM

This did not seem to represent an e-book that should have “ROI” in the title, so I decided, one more time, to dig a little deeper.Although there are a few good tidbits, I found the summary of the “Metrics” chapter rather disconcerting:

Screen Shot 2013-02-28 at 11.13.49 AM

As we have discussed previously, clicks are not really a way to measure ROI. They are simply a way to measure how much traffic your marketing tactic has driven to a specific landing page. If you are spending $5,000 to promote your content and you are measuring your success with web clicks, you are going to be out $5,000. An e-book with “ROI” in the title should offer ideas on how to turn clicks into real sales, perhaps by driving traffic to a sample request form or a page that has an RFQ/RFP form so that you can funnel the leads into your CRM system.

In short, a promotion that mentioned ROI and indicated it would be a primary focus led to an e-book that only really focuses on metrics in one chapter, and in that chapter represents ROI in a less than ideal fashion. Sadly, this kind of scenario is occurring with increasing regularity in the online world. ROI is a great term to pull in traffic because we all know it’s a huge issue, but what you get, more often than not, is a bait and switch.

The Real Trouble with These False Starts

While Social Media treats ROI as a mostly mythical creature that people like to read about in hypothetical scenarios, real-life companies are struggling to actually track the ROI of their social media marketing efforts. Consider these statistics that NectarOm  (Nectar Online Media)published in a recent study in collaboration with the Socia Media Clubs: Out of 400 people surveyed, 73% do not even track the ROI of their social media efforts. Of the people who do attempt to track the ROI of their social media marketing efforts, 46% said it was not a major driver of revenue.

Let’s think about this in the context of the InfiniGraph e-book. They suggest that a single campaign may involve a company spending $5,000 in Facebook ads. Based on the NectarOM study, most companies would not even make an effort to track the return on that $5,000. The companies that would track the investment would, for the most part, find that their ROI was poor.

If you are a company that is now tying a majority of your marketing time and money to “content marketing” and then promoting that content via online channels, whether through paid Facebook ads or paying an employee to promote that material, ROI should be something squarely in focus. That does not mean tracking the clicks, retweets, shares, or likes. That means tracking how many sales you generate. It’s just that simple.

Let’s stop with the game-playing

For a few years now, “authenticity” has been a buzz word in the world of online and social media marketing. It is not authentic to use an important word or phrase and then present something that is a) not entirely relevant to the title and b) not the highest quality of information related to the topic you previewed. An company that is talking to brand managers should have been cognizant of the fact that marketers like me, and maybe like you, would have felt suckered after downloading that e-book. The same sensation applies if you promote a white paper, a blog post, a webinar, or anything else that promises to offer insight into a topic but turns out to be something else entirely.

There is the simple common sense of not doing this, but there is also the fact that there is clearly a desperate need in the marketing world to understand how important it is to track your ROI for any marketing campaign, including social media. Otherwise you might as well throw piles of money out your window. Using these important concepts to draw people in is distracting companies that truly need advice on how to control their marketing budgets.

Let’s stop treating ROI like a mythical unicorn. Let’s stop using it as bait to lure people into an entirely different topic. Instead, let’s work on ROI as something that companies should have been tracking from the moment they integrated social into their marketing.

What do you say? Can the marketing world meet this challenge?

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15 comments on “Dear Marketing World: ROI is NOT A Unicorn

  1. Margie – Very often those marketers who preach about authenticity are the least authentic. Kind of like the headline writers at tabloid newspapers.

    Write something sexy and exciting to draw you in and then slather you in the same old unimaginative sauce.

    Cheers,
    Marc

    • Right on, Marc. Having to say you are authentic is a lot like proclaiming you are humble. It’s kind of self-defeating. You are authentic, not because you claim to be, but rather because others recognize your consistency.

    • True statement. Sad, but true. Unfortunately, we can’t really afford for ROI to become just a pretty link bait concept. Companies really need to grasp the importance of tracking investment and return.

  2. I think the key issue is a statistical problem. It is difficult to accurately assess what generates sales. You can ask customers, but there’s always the chance they will forget or lie. Of course, the more accurate way to measure is to assess buying behavior before and after a campaign has launched. But even when this is done, you have to be able to hold every other possible variable constant (i.e. the corresponding campaigns of all other competitors). That is nearly impossible and always expensive to do.

    I think business decision-makers use these soft metrics (likes, page views, comments, etc.) as proxies because the data is readily available. It’s the same way a trade magazine would use circulation as a proxy for ROI or a TV network would use Nielsen ratings as a proxy for ROI. It’s not directly tied to sales, but it’s a less costly estimate.

    I personally have no problem with businesses using these soft metrics as proxies for ROI as long as they realize they are just that–proxies. Obviously, companies who can afford to invest in research and data collection to attempt to create a model that assesses how well campaign leads to direct sales, they should definitely do it. The real thing is always better than the proxy.

    • I have to disagree with you there, Doug. There are a lot of ways to get closer to more definitive metrics. Marketers just need to a) realize the need for it and b) think outside the box. If you are spending money and are basing your success on clicks instead of sales, you are heading towards doom. It just does not make good business sense.

      All of that aside, this whole conversation is why the lure of ROI as link bait or traffic bait is so disturbing. There has to be REAL conversation about this issue still. Not bait and shift.

  3. It does get really frustrating when you see something described as one thing, then it turns out to be something completely different (and rarely in a better way).

    One can only hope that as these practices continue, consumers get smarter and begin to ignore future ads and pitches, forcing brands to be more upfront about what’s about to be downloaded.

    We can but wait and see.

    • Yeah, I feel a little ashamed (and annoyed) that I keep falling for the same trick. Unfortunately some pretty well-respected resources have also started using this kind of methodology. It really hurts your credibility as a “content marketer,” ironically enough.

  4. The real inbound marketing cannot include any spammy elements. This is a holdover from saturation methods of the past, when ROI had some other dubious metrics. Your point is clear and well taken, focus should be on the ROI, as in the profit, money, and growth that comes as a result of investment. This is no time to change the definition.

  5. Fricking hilarious headline. It’s funny how some marketers run away from numbers like the black plague.

  6. I think a MAJOR issue is that people don’t understand what ROI actually is. At its most fundamental level it is simply the gains from an investment less the cost of investment divided over the cost of the investment. What I don’t really get is I have read multiple articles referring to the ROI as if it is set in stone. A concrete financial metric that justifies investment. But, it isn’t.

    There is nothing in the ROI implicitly or explicitly that is even contingent on a monetized value let alone profit margin, earnings, net income. Nothing. In all honesty if I wanted to say that the cost of my investment was measured in gummy bears and say the gains are measured through “pats on the back”, who is to say I am wrong?

    The reason the ROI is viewed as the proverbial “unicorn”, as you put it, is because it kind of is. It is something that we can’t quite explain but since we know what a white horse looks like and horns look like, we can venture a guess as to how a unicorn should look, conventionally speaking. The ROI is finances “chameleon” metric, it can pretty much be manipulated in anyway you want.

    Now, I realize the whole Gummy Bear return scenario is unlikely to be employed in any really serious company. But, I would argue that measuring “clicks” as a determinant of the ROI is the same as Gummy Bears in that there is no explicit outcome. This is not always the case as a click on the “confirm order” button is definitely a sale but why would you not use something like Profit Margin as a measure (Net Income / Sales) as opposed to the ROI.

    That was longer than I intended but nonetheless, the ROI doesn’t work because it isn’t a concrete metric and is being treated like one.

    • Well here is the problem with that kind of philosophy. Companies are spending a LOT of money on marketing tactics. So while you could *technically* define ROI however you want, I suppose, the reality is that if you are spending a lot of money without making sure you are making more than you are spending, you’re going to find yourself in a mess.

      The reality is that companies are not just meddling with gummy bears. They are quite literally throwing their money out of a moving car window with seemingly no care as to their bottom line. That is what worries me about today’s marketers.

  7. [...] our post about “bait and shift” content tactics where a certain kind of content is previewed and then something entirely different is received? [...]

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