What's the ROI on that?

I don't know, you tell me!  Notice I didn't say "depends" - 'cause that just get people sideways.

Whether you're pitching social media, paid media, search, website, whatever, some smart ass in the room raises their hand slowly and diligently to say,  "What's the ROI on that?"  As David Meerman Scott at WebInkNow.com pointed out, "what's the ROI of you putting on your pants today?"  

It's necessary to do business these days with your pants on (for most of us).  But, in addition to having pants on, it's also necessary that your company be getting really good on and at the web - marketing, communication, advertising, collaborating, partnering, experimenting, testing, ACTING!  Stop the foolishness!

Hey, what's the ROI of that press release you just put out, hell, what's the ROI of your whole corporate communications department?  

Corporate reputation?  

What's the ruler you're measuring all that corporate rep with? And where can you trade that currency?How many $$$ or silly Nielsen points does that equal?  

What is the ROI on the stadium sponsorship of the little league park?  Part awareness, part CSR, part corporate reputation, etc.  How does that equity get spread across the enterprise?

What's the ROI of that $40MM ad campaign you're running during American Idol and college basketball? Did you see a sales lift the next day, the next week?  And how will those results influence your next mass media dump?

The Alice in Wonderland alternate belief reality that traditional marketing organizations hold on to today is comical.  So you perk up in the presentation or discussion and ask me about ROI?   

ROI or "value" is a custom conversation and equation for every organization.  If you don't have an enterprise model (based in dynamic research tools and real outcomes) for the value of various marketing activities, then why are you asking an outside agent or agency to tell you what it should be?Or to justify the ROI of the widget, wikipedia service and twitter management they are pitching?

So what about measuring?  "Hey Matt, can you send me a few slides on our measurement POV?"  

Well, what are we measuring?  Social media?  In order to do that, we've got to come to some common terms first.  Sales, customer satisfaction scores, leads, intent, awareness, favorability, visit frequency/latency, traffic - mix all in equal parts and that is a big math cocktail.  And don't say frickin' engagement - because, by my count there is nothing that links engagement to any business outcomes. 

Here's the bottom line.  A well-functioning online footprint (including a website, social media, advertising, blog relations, etc.) is the single most important sales, marketing, advertising, public facing appearance of every single company.  Disagree?  The "e" part of any sales, marketing, corp comm, customer experience team is tiny if at all.  Before you start the reorganization read this from Smashing Magazine - 10 Harsh Truths About Corporate Websites

You want to get to some ROI, or justification for spending allocation?  How do you factor in the opportunity cost for not doing so?  Give it a shot.  Take down your site, search and anything else you're doing online and see what that nets you.  Every demographic in this country spends more time online than almost any other media.  You are questioning how hard you go online?  You're kidding, right?  You need to go as hard as you can like your job depends on it.  Because frankly it does.

My take is there are levels of participation that lead to a culture of measurement and being able to identify and isolate the contributing factors of ROI:

1) track and record everything you do and pay attention to the mind numbing amount of data - if you can't or don't want to deal with it, find a person or firm that does 

2) compare a few of the important numbers above to come up with some ratios and quotients evaluated over time - if you've got a building full of quants in your organization, then this could be a big spreadsheet; if you don't hire someone.

3) make a no-bull guess at the value of these things in relation to each other - and map how they connect.  Yes, that means that marketing, brand, IT, operations, communications all need to have a common understanding of this in order to land anywhere near a ROI.

Sounds dumb and simple, right.  Problem is, it's a lot of work and nobody really owns it today in any organization.

BTW, here's Gary's take on it.

Comments

[Scott]

You claim that a "well-functioning online footprint (including a website, social media, advertising, blog relations, etc.) is the single most important sales, marketing, advertising, public facing appearance of every single company." If there's no ROI, how can you determine it's the most important? By what measurement if there's no measurement at all? I hope you're just screwing with us and not just stupid.

[Matt Mantey]

Scott - point is define ROI. ROI on sales? ROI on awareness? ROI on engagement? Needs to be more than just give me the ROI. There are distinct differences between tracking, measurement and value. Not that there is no measurement. BTW, I am just stupid.