Richard: "Welcome to another edition of Family Feud. We surveyed our audience of Internet marketers and asked for their top gripe about their discipline. What do you think is number one on the list?"
Contestant: "Internet Marketing is held to different standards of measurement than other media."
Richard: "Survey says... (ding, ding, ding) Internet Marketing is held to different standards of measurement than other media! A whopping 80% gave that answer!"
Okay, I really don't know that 80% of Internet marketers would complain about online tactics being subject to more stringent standards of measurement than other media, but I'd wager it is the top gripe of those in my industry. I would estimate that in my career, I have heard that grievance at least 200 times in meeting rooms, over drinks, at conferences, and in online forums.The common complaint takes a form something like this: "My CMO wants to know the click rate and conversion rate for every banner ad and every site each month and expects my team to improve upon it month after month. They'll spend ten times as much on print media without knowing the response rate, but I can't spend a dollar without eight metrics in place!"
Who should we blame for our boss' and clients' intense focus on measurement of online tactics? Look in a mirror. You and I are responsible for this problem. (To be fair, you are not responsible if you haven't been involved in online marketing and media for at least seven years.)
As the Web matured, those of us in the field of Internet marketing couldn't talk long or loud enough about the measurement of Internet media. It was our key to the vault where the marketing budget was kept. "Give us budget," we said, "and we'll show you the ROI of every penny spent." And so, it should come as no surprise that the keeper of the vault has come to expect we'll demonstrate results for every banner ad, every media buy, every microsite, every redesign, every Search Engine Optimization effort, and every email campaign.
The expectations we set about online measurability have become a double-edged sword--on the one hand, we face intense short-term pressure to incrementally improve every tactic, and on the other hand, we've found that we really cannot prove (in most cases) the Marketing ROI (MROI) of our efforts. To be sure, there are plenty of things that can be measured online (click rates, time on site, conversion, etc.), but actual MROI is a different matter. To use an analogy, I can look at the stats for two teams at the end of a football game (rushing yards, completions, interceptions) and make an informed guess at who won, but trying to derive the margin of victory from those stats is a different matter altogether.
The one exception to the MROI challenge is that those in the direct marketing/retail business can link the cost and corresponding results for some online tactics such as online banners and PPC ads. Take the costs of an ad, compare it to the margin on the sales that directly result from the clicks on that ad, and you can validate MROI. But for many of us this linkage is far more complex, tenuous, and difficult to prove. If you don't sell online, if purchases are transacted not with your own organization but through a distribution channel, or if your goal isn't sales but instead is to change minds and to increase awareness, consideration, loyalty, or offline action, then closing the loop for MROI is a much, much greater challenge.
I mention this because we are in danger of setting unreasonable expectations again. Is Social Media measurable? Yes. Should we measure it? Of course. Can we prove the ROI of Social Media. Perhaps, but not without considerable effort, planning, and investment. In my blog post tomorrow I'll share my thoughts on why I believe MROI is so difficult to determine and what I believe are the best methods to estimate the MROI of Social Media and other marketing tactics.