marketing in traffic by brian branca

Diagnosis: ROIrage

I did not coin this, but I wish I did because it is clever (thanks Matt). I think he was inspired by Logic + Emotion’s Top Ten Made Up Words of Web 3.0. If you’re not getting it; ROIrage is return-on-investment (ROI) combined with rage…get it? Kinda like ‘roid rage. Ok, maybe not so clever. BUT, it wonderfully illustrates a reaction, maybe more accurately a behavior, which is detrimental to the growth of interactive advertising. I’m not saying this medium’s growth will cease & begin to decline, but it is going to be more painful than it needs to be.

John Wanamaker once said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Well Mr. Wanamaker, God rest your soul, you would be a pig in shit in today’s digital advertising world. While it is still a challenge for any online business to reach all potential customers, the manner in which the cost to find & acquire them is measured has become more sophisticated. The importance of an immediate return-on-investment has reached dizzying new heights; I looked down once & almost threw up…& I am in no way scared of heights.

Seriously, I get it. Risk tolerance is low in these difficult economic times. With increased scrutiny & limited resources making everyone’s life a bit more stressful, I can empathize. It may feel like the weight of the digital world is resting on your shoulders. The good news is that it does not have to be so. The bad news is that, while you’re doing your best Atlas imitation, opportunities are flying by completely unnoticed.

You think you’re seeing the future, but you’re simply repeating the same routine. The insanity needs to end.

Have some faith. I love numbers; I could sit & play with data all day because it makes a lot of sense to me. This has given me some perspective in viewing victories in numbers alone. Don’t mistake a series of short-term gains as the pathway to long-term success. I swear we know what we’re doing & it will ultimately lead to fantastic gains for your business that will make you look like a freaking genius. You can thank us later; immediate gratification is not necessary. The chance to advance your brand through creative thinking, smart planning & beautiful execution is all we require.

Now if you will excuse me, I must return to spreadsheets & numbers. Pivot tables & projections, subtotals & sum functions; sowing the seeds of greatness.

In order to be truly accountable and add measurable value to business objectives, we have to understand what counts. Relentlessly focusing on what counts at the minutiae detail level at every point can distract you from making larger, measurable gains. What might be deemed as a failure to tactically execute is often the result of something that does not fit into the campaign’s objectives or to narrow of a focus on what counts. Internal pressures, politics and a constraining definition of accountability can suffocate and even destroy a program hindering the potential contribution to bring measurable, sustainable value to a business.

A retreat in this direction, particularly in this economic climate, can diminish marketing’s perceived value and programs suffer. The consequences of this begin with decreasing allocation of resources (staff, budget, technological support). The Marketing team is charged with accomplishing more with less, lending to more time spent being reactionary and too tactical. It’s a seemingly inescapable loop that is doomed to repeat itself unless goals, objectives, roles, and responsibilities are clearly defined.

Much of the discourse is caused by a lack of mutually understood vernacular and misaligned expectations in relation to the representation of metrics. We speak about interactive as being accountable and measurable. CFOs and other finance types take an interest but rather than digest the numbers as marketing insights; they take them literally as financial reporting. CMOs, V.P.’s of Marketing who need the buy-in from financial types to get their budgets get excited thinking they are satisfying their needs for accountability. However, metrics tied to ROI such as view-throughs and other interactive marketing measures, accepted and understood by interactive marketers create dissension and divide between the ranks.

The situation is often unnecessarily adversarial from the start. Similar to many struggling relationships, the majority of discord is due to an inability to effectively communicate. While sharing the same goals, neither party fully understands what the objectives are and how to best measure the results. The solution sounds easy; the steps necessary to get there are not. There is a matter of education and patience that is vital to closing the gap. Quantifying and measuring the value of interactive programs and investments should help get everyone on the same page. At the core of the issue is how we view, interpret, communicate and react to data.

An inability to establish goals for metrics and monitor key performance indicators can cause paralysis by analysis; too much data and no focus. We have a plethora of data at our disposal, but not too many have figured out what, exactly, to do with it. Everyone wants to know how to integrate their data and analyze the business across channels. Not many have the solution for aggregating, analyzing, and digesting combined online and offline data in a timely and actionable manner. This is an industry-wide challenge and I’m assuming whoever can establish predictive models, by retail category, will become a very rich person.

Until you are able to identify true incremental sales through online media, social networking, and mobile, increased focus will remain on direct sales drivers like paid search and email. The perception exists that campaign data does not evenly measure and compare performance across all digital channels. It’s not that online marketing’s reported impact is completely discounted, but due to difficulties in comparing metrics across channels, the decision makers will remain skeptical in varying degrees.

Simply stated, if the sales and cost don’t add up to an acceptable return on investment, you are not getting the budget you requested. Learn to speak the language necessary to influence key stakeholders within the organization and motivate decision makers. Recommendations, ideas, etc. do not resonate if they are without goals, objectives, strategy and a plan underpinned with solid execution. The better able you are to tie an investment to incremental sales at or below the desired ROI; the more successful you will be at gaining necessary traction within the company. The better you can communicate how certain programs contribute and support overall sales and other measurable value to the business objective the more you will be able to drive value that will contribute over time. We have all become inpatient because we can measure a return from a sale in a click; but “Rome wasn’t built in a day”, “Patience is a virtue” and other old clichés apply in the new measurable world of digital marketing.