The
Battle For Coca-Cola
Rages On.
Ain't
Nothing Like
The Real Thing, Maybe.
I
Don't Mean To Say
I Told You So, But...
Are
Consumers Smarter
Then We Are?.
The
Four Great Myths
Of Global Branding.
Mr
Bevis Butts Heads
At Mitsubishi
The
Best Laid Plans
Of Mice And Men.
Dare
to Be Great:
The Mad Genius of "The Matrix"
Mitsubishi's
New Marketing Boss
Out Of The Frying Pan.
Concept Is Stronger Than Fact.
Value
Perception In A World
Gone Mad With "Cool"
The
Future of Advertising
The Brand
The
Future of Advertising
The Targets
The
Future of Advertising
The Grid
The
Future of Advertising
The Swarm
Technology
Making The Message
Meaningful
The Only Business That Matters Is The One You're In.
What
Ever Happened To The
Big Idea?
The Post-Advertising Era Is Here
Confessions Of A" Liar For Hire"
Good, Bad and Ugly At the Moment of Truth
A Post-Advertising "Big Idea".
The Value Of A Paying Pustomer.
Emergence Of the "Empire of One".
All customers Are Created Equal
Playing God An Other Atrocities
the
City That Spawned
The Age Of Advertising..
Fear
And Self Loathing In Advertising.
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The Greatest Success Metric Is Sales. Everybody on the client side is demanding accountability these days. But nobody seems to want to be accountable for the dreadful dreck masquerading as advertising in today's global marketplace. I'm as much in favor of marketing expenditures pulling their own weight as the next bean counter. But with all of the new"success metrics" mumbo-jumbo out there, it seems that more creativity is being expended trying to justify the cost accounting behind an ad as the content behind an ad. An important thing to understand about database tweaking and marketing metrics is that they can sometimes be defined differently by different people. The critical issue for me, is does everybody in the company agrees on the definition of success indicated by those metrics? My definition is simple. Sales. |
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But these days there is an entire cult of weezers trying to turn these numbers into a bleeding Holy Grail. A common definition of ROI (Return on Investment) involves looking at the cost of a marketing campaign relative to the profit generated. This approach comes from the original definition of ROI as used by finance people rather than marketing people. That's what makes this entire success metrics spectacle sound more like CYA than ROI. Now you've got clients who will say to you, "What is my ROMI (Return On Marketing Investment) if I shoot these spots in Hawaii as opposed to Hoboken?" We all know the answer he's looking for. We all know the answer the agency is going to provide him with. |
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"Mr. Webber: I notice a lot of your heroes are women. I've always heard that women were difficult to work with. What do you say?" .-Amanda R. Englewood, Ind. I am ashamed of what men have done to women in this business. Anything I can do to help them even the score, I stand ready to do. Now fetch me a cup of cofee, would you Hon?-HW |
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A Return on Investment in financial circles has a very specific meaning: How much was invested in an asset to the company, and what was the company's Return on the Investment? This is the same "return" concept used in the stock and bond markets, as in: "My stock portfolio had a Return of 20%." If you invested $1000 on January 1, and on December 31 you had $1,200, you generated a 20% ROI - your Return on the Investment of the original $1000 is $1200 - $1000 = $200 / $1000 invested = 20% ROI on an annual basis (excluding transaction costs). ROI in marketing circles can sometimes be defined in the same way, Though a financial purist (CFO) will tell you marketing typically involves expenses (income statement), not assets (balance sheet) so you really can't have "ROI" under a strict financial definition of the term. Which means that if we agency people were not such academic underachievers, we could shut the suits down for the count. But we agency folk would rather let ourselves get raked over the coals in the interest of client issue sensitivity. So what we end up trying to do is to create some sense of the value of a marketing expense, a "yardstick" so our client can compare one marketing program to another. And what we come up with is more akin to voodoo metrics than success metrics. Generally speaking, most ROI examples ignore many other costs to the organization in their rush to psudo-accountability. To be more accurate, you would want to at least figure in operational costs. For example, in on-line marketing efforts, the cost of serving incremental page views may be next to nothing. But there is some cost - they have to designed, stored, and bandwidth used to serve them. The point is, this model doesn't "scale to the sky" without additional costs. At some point as sales grow, they require more servers, storage, bandwidth, and so forth. And more headcount to service all of it. So before you can begin to calculate the true ROI of a campaign, any additional client costs must be taken into account. Costs frequently overlooked might include design, servicing fees, answering phone calls, clearing credit worthiness and so forth. In some instances these costs can be huge, such as to pick, pack, and ship. They must be included in the overall calculation to measure true campaign ROI. In the SUN WORLDWIDE PORTAL INITIATIVE, we created 2 years back, the marketing objective was to deploy a demand creation campaign featuring the products and services of several business units across all the time zones. Our strategy was to advantage the global interest in Enterprise Resource Portals and the fact that Sun on Sun experience and building the worlds largest ERP (GM Corp.) all contributed to establish a leadership positioning for Sun. Although ROI was projected, because the campaign was designed to be adopted locally by each geo, calculating the ultimate ROI was virtually impossible, due to all the variables. Most agencies are generally not privileged to share such proprietary information with their clients, which is as it should be. Therefore, they believe that the calculation of true ROI as well as other specific success metrics can only be accomplished as an internal auditing practice by the client organization. But that doesn't stop them from trying to "run the numbers" anyway. The minute you take the martini glass out of an Account Guy's hand and replace it with a calculator is the minute I start getting nervous. My own personal success metric is the belief that what I do MUST have an impact on the customerÕs awareness, interest, motivation to buy and retention. Anything else is inconclusive at best. Like chicken entrails or the random voodoo doll. Stay tuned.
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