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Nyheder | Is Marketing ROI Dead? Again?

Oprettet af Kia Aagaard | June 03, 2008 12:30

By Jonathan Winch, Poets and Plumbers

The newsletter of Markedsføring from 2nd of June 2008 features an interview with London Business School marketing researcher and writer Tim Ambler who makes the point that ”ROI is dead”. And he’s right – sort of. In the narrow context of activity-related ROI, achievement of specific ROI goals (such as response rate, click-throughs, conversions) is often of doubtful value to the organization’s long-term achievement of its aims. Tim Ambler encourages marketers to stop thinking in terms of ROI, and instead to focus on finding new and better ways to achieve long-term organization goals.

But his views are hardly new.

In fact, the doubtful value of marketing ROI was the subject of a discussion sparked off some years ago by commentators such as SAS marketing strategist Michele Eggers when she called attention to the tendency of marketers to focus all too narrowly on the return on investment gained from specific campaigns and other activities. Eggers declared that it was far more important to focus on the bigger picture of how marketing activities contribute to achievement of the company’s overall goals.

Imagine, for example, a situation faced recently by a large Danish retail chain that launched a campaign to sell an electronic appliance on its website. A runaway success when measured in terms of click-throughs and conversions (marketing’s ROI flags), the campaign sent shock waves throughout the chain’s many stores as consumers attempted to return faulty appliances locally, demanded to be given the same discount as that offered on the website, and generally flooded unprepared shop-floor sales staff with requests for information.

The point is that getting better results on creative tests, great response rates, or budget-beating sales on a specific campaign isn’t really good enough for marketing to declare success. Instead, impact on the overall business needs to be positive. But that’s most often easier said than done. We all know that the reality out there for most marketing departments is that they operate as an information-isolated island where organizational impact is impossible to assess ahead of time and just plain confusing after the event. All too often, there is no five-year top-management strategy that can lead the way and provide the basis for true measurement of the value of marketing efforts over the long run. And all too often, the only way for marketing directors to look like they’re doing their job is to have specific, short-term metrics that can guide their staff and be quickly reported to top managers hungry for success stories.

Somewhat more difficult to understand for many is Tim Ambler’s statement during the Markedføring interview that ”marketing isn’t an investment”. Readers unable to follow his logic will be comforted to know that he also believes the direct opposite. In fact, the back cover of his acclaimed book ”Marketing and the Bottom Line” states: ”Marketing isn’t a special case, it isn’t different and it certainly isn’t impossible to measure. It’s an investment.” Makes it hard to disagree, doesn’t it?

As marketing commentator Michele Eggers states: ”The key is to shift the measurement thinking from being so campaign- and product-ROI focused to being more customer centric.”