Those of us who got education and training in marketing more than 10 years ago are likely having a “Rip Van Winkle” experience as we try to grasp how marketing has changed in that period due to the impact of the internet and then more recently social media apps. Though the same ROMI (Return on Marketing Investment) is the key metric for marketing managers, it is much harder to actually understand and measure.
ROMI is the measure to which marketing dollars contribute to profits. In the old world (30+ years ago), it was hard to associate a marketing cause with the actual effect. A question could be asked: “How much of sales was a direct impact of a single marketing effort, a billboard or an advertisement, for example”. Even using a lot of assumptions to relate the cause with the effect, there were questions in the direct nature of the relationship between the cause and effect – but at least we knew that no one else could adequately relate marketing to results.
Internet purchases, that were preceded by a number of clicks, brought some never-before-available relationship between purchasing and the marketing chain that led up to it (the breadcrumbs). It is understanding the trail of breadcrumbs and developing real insight that can help marketing managers better understand and manage their ROMI. And for a while, it was adequate.
There is however a new complication in all of this – a huge complication. Metrics-driven marketing, powered by analytics, affords companies the opportunity to engage customers in entirely and personalized ways. However, companies need to a approach multi-channel marketing very differently than they have with traditional marketing. Marketers have unprecedented access to an enormous amount of customer data including search patterns, engagement patterns, demographics, social connections and campaign responses. The complication is that to access customers’ pocketbooks, they need to understand direct and an indirect interrelation between these data points to determine what is it that leads to a purchase. Only then can marketers effectively allocate their marketing budgets, and direct all related efforts to the right combination of activities that will drive ROMI.
And now, just as we are getting comfortable engaging customers with websites and SEO efforts, (Search Engine Optimization), the website-centric paradigm is being replaced by an application-centric engagement: Social and mobile apps are taking center stage. Leverage it or ignore it at your own peril.
Concepts for this article were derived from the article “Metrics-Driven Marketing Meets the Multichannel Challenge”. Cornell Enterprise, Fall 2012.
