If digital marketing pros can't measure ROI, what makes you think you can?


As the fifth year of the Obama economy grinds on, more and more CFOs are pressuring their marketing departments to justify digital marketing – and particularly social marketing – expenditures in terms of value generated. But according to an Econsultancy survey of more than 400 advertiser and advertising agency respondents, marketers know less than ever about what, if anything, their digital campaigns are actually accomplishing in the marketplace.

The survey “calls attention to the significant decline in their self-assessment of their ability to measure ROI,” MediaPost reports.

Fewer than half – 47 percent – rated their ability to measure ROI from paid search as “good.” Which is better than from email (41 percent), digital display (28 percent) and social media (11 percent).

It gets worse.


“Some 51% admit they don’t have a clue (giving themselves a ‘poor’ rating) when it comes to measuring ROI from social channels, followed by mobile with 35%,” MediaPost continues. The cause “remains unclear – whether it’s the speed in which technology develops, the decline in search marketing proficiency, or changing definitions.” But two totally different factors may be at work here.

One is that many digital marketing professionals don’t seem to know just what return on investment is.

More than a quarter of those surveyed (29 percent) think it’s lead generation. But new leads just give you the opportunity to send out more sales messages to more consumers. More than a third (36%) thought it was traffic volume, but that in itself doesn’t produce sales. At best, it exposes more consumers to a website or Facebook page that may or may not do a good job of selling anything.

The second factor is that all the different measurement criteria deal with how consumers respond on the internet, not in the real-world marketplace. Likes, shares and tweets aren’t sales. Website traffic may produce sales, but that depends on what they’re selling, how (e.g., online or from brick-and-mortar stores) and how effectively.

Break the bubble

With very few exceptions, like Bud Light, which actually combines online analytics with in-store consumer purchase data, digital marketers stay comfortably inside their computer-data bubbles, as if the cyberworld were the real world. That’s why Bud Light knows exactly what its social marketing ROI is – six times its social network ad spend – while other brands’ marketers haven’t got a clue.

As we noted here last October,

Social network marketing’s main appeal to advertisers is that media costs are dirt cheap, often nonexistent. Too many brands confuse “cheap” or “free” with “effective,” measure results in social media terms rather than real-world terms, and end up with big flops in the marketplace.

So if you want your social marketing to have a respectable return on investment, you’ve got to make an investment, as Bud Light did. You need to invest in analytics that link up with consumer behavior when they’re buying instead of just browsing. And you need to invest in paid media, to capture attention to your message that free social media just don’t generate.

Otherwise, your free social networking marketing campaign will likely end up being worth exactly what you paid for it.


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