The fast evolutions in the digital landscape (social media, mobile, online video, etc.) give a lot of marketers a hard time adjusting their marketing mix in such a way that they create more value for their company and for their customers, prospects, and all other people in the ecosystem around their business.
This often has to do with a strong focus on the channels and the technologies, a lack of clearly calculated examples, models, and user cases, and the rising pressure to account for everything using the almighty ROI. But I think that above all, it has to do with the change in mentality, and the failure of existing communication models in a world where people define a brand and it’s not the channels that matter most. Businesses that are looking to integrate more interaction possibilities in their mix should look less at the media and more at the mix but then from the customer perspective.
A barrier that is often heard when it comes to embracing more ways to interact with people in a cross channel way, is the lack of proven ROI regarding these “new ways”. However, often that’s an excuse for not innovating and a sign of not being able to properly measure at all.
Some marketers want to measure yet many simply don’t know how
A survey from Omniture earlier this year pointed out that a mere 14% of the questioned marketers nowadays use mobile, social media, as well as online video in their marketing mix (Omniture calls them “emerging media”, which in my mind they really are not). But the study it also showed that 55% of the respondents don’t know how to effectively measure the marketing ROI of social media, mobile, online video, etc. And it is this marketing ROI that happens to be a very current theme.
Of course, Omniture is a company that allows marketers to measure their efforts online, therefore the results are mostly good news for Omniture itself, but they’re none the less interesting.
80% of the respondents find measuring the ROI of online marketing activities important, but only 31% can actually effectively measure it.
86% find the conversion rate of online marketing important, but 25% are NOT able to measure it.
In regards to adopting the three “channels”, some numbers:
Social media marketing
69.1% of the respondents make use of social media in their marketing efforts, but 41% of them do not have a “mechanism” to measure the conversion.
77.3% of the participants of the study don’t use mobile channels and forms of communication. Out of those who do use them (22.7%), 73% are able to measure if website visitors are visiting from a mobile device (which really is the most easy thing to measure), but only 30% are able to measure the conversion of their mobile devices.
42.9% of the respondents use online video in their marketing efforts. Out of those, 59% find post-video-conversions to be one of the most important metrics. Yet, 70% are not able to measure it.
What strikes me is the fact that the survey mainly looks at conversion and immediately measurable metrics, with little or no attention being given to a holistic view on the ROI of both individual channels and all marketing activities combined. Apparently, ROI is regarded in the same way as conversion. Branding and engagement seem to have been forgotten all together.
Why measuring marketing ROI often fails
When speaking about ROI, marketers seem to focus on channels, media, campaigns and programs. They look at the messages and their carriers. They seldom look at what really matters: the customer, his lifecycle value and buying journey, the bottom-line and the global picture.
Finally, businesses also seldom look at marketing ROI from a cross channel, holistic and global perspective. That’s a fatal error in a world where the customer is omnichannel and where fragmented media, messages, interactions and marketing tactics get integrated to leverage overall results and engage the customer where he is.
Finally, many marketers clearly don’t seem to know yet that there is a difference between ROI in the traditional sense and marketing ROI as a methodology to forecast and analyze the impact of marketing investments on all possible levels: the campaign, the channel, the program, the marketing goal etc.
Marketing ROI is not one financial formula. It is a strategy and a way of looking at marketing that requires cultural changes and cross-divisional definitions of metrics and KPI’s, long before the different formulas can be implemented, taking into account branding and less predictable forms of marketing. Marketing ROI as an approach should also lead to an overall view on the return of marketing, starting from the several mentioned micro-elements.
The focus on channels, the lack of a common measurement language, departmental walls and a misunderstanding of marketing ROI are among the main reasons why marketers fail to measure ROI. Another one is the will to do it, also known as resistance, staying in the comfort zone or fear.