Archive for the ‘ROI’ Category


In case you’re going to be near Charlotte, NC on August 24th, you might want to add this to your calendar.

I will be presenting on Social Media R.O.I. (the real thing, including the method) and answering questions, so it might be worth the road trip. Not just blog posts, not just videos but the big live show. And it’ll be the first time I show this stuff to a crowd all in one go, so it should be interesting. If you haven’t registered yet, go here.


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“The person who says it can’t be done is always interrupted by the one who just did it.”

– From the movie “Daylight,” with Sly “Rocky/Rambo” Stallone

To every Social Media pundit or measurement “guru” out there who claims that calculating the ROI of Social Media is either impossible, too imprecise or even irrelevant, I have an ice-cold bottle of reality waiting for you: You’re wrong and you don’t know what you’re talking about.

I’ve said it before and I will say it again: Just because you don’t know how doesn’t mean it’s impossible. 😀

Fact: R.O.I. calculation isn’t rocket science. I can teach a 10-year-old the basics of R.O.I. calculation in 30 minutes.

Fact: R.O.I. calculation is media-agnostic. (It isn’t an old media or new media discussion. Not even close. If you are talking about impression, CPMs, clickthroughs or other media metrics as R.O.I. values, check your map: You are hundreds of miles off course.)

Fact: R.O.I. matters to people who run businesses because it either validates or invalidates an investment (Social Media or otherwise). So you can’t skirt it, blow it off or make it up.

Fact: R.O.I. monitoring allows companies to fine-tune their marketing and business-development efforts on the fly and improve outcomes over time. (If you don’t understand R.O.I., you can’t measure the effectiveness of your activities, and if you can’t measure effectiveness, you can’t truly impact performance. It’s kind of like driving blind.)

Fact: If you don’t understand R.O.I. from a business (P&L) perspective, you just don’t understand R.O.I. Sorry. That’s just reality. Deal with it. (And fix it. For your own sake.)

Fact: Claiming that Social Media R.O.I. is difficult or impossible to measure is as ill-informed as saying that changes in transaction trends are difficult or impossible to measure.

Fact: Every time I turn my head to see who just used the word “impossible,” all I see is the ego of someone who thinks they have nothing new (or old, in this case) to learn.

Fact: The more specialized a measurement “expert” is (especially when it comes to media measurement), the less likely it is that they will be able to help you put all of the pieces of the Social Media R.O.I. question together. So beware the gurus. Their focus is likely too narrow to be of any use to you when it comes to calculating R.O.I.

The truth is, R.O.I. measurement takes work but is relatively simple to do. You just can’t get caught up in mistaking media metrics and “impact” measurement (like increased traffic to your site, social mentions or positive WOM) with actual R.O.I. analysis. (Apples and oranges.)  Those of us with practical business management experience (in which R.O.I. analysis and real business performance come in daily doses) AND  in community or brand management have been doing this sort of thing for years. We know how to measure what matters, and it’s simple.

So if you’re a business executive who feels frustrated by the lack of R.O.I. understanding in the Social Media “expert” community (or the media measurement community), relax. Don’t buy into the “it can’t be done” cop-out. That tired old line is about to be swept out the door for good.

Hang tight. We get into the “How” in just a few more days.

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Time for your weekly brandbuilder reality check.
There are only two types of businesses: The ones you know are the best in their category, and… everyone else.
Advertising and marketing are nice, but too many “also in” businesses waste money on marketing and advertising when they should instead revamp one or two elements of their business that would help them actually gain market share. (The most pleasant and efficient customer service experience in your industry, a perfectly designed user interface, a 100% uptime guarantee, stunning design, impeccable ergonomics, remarkable flavor, etc.)

Advertising is basically a load of bullshit unless you have something worth advertising to begin with. (Otherwise, what are you advertising: Hey, come buy from us! We’re the thirteenth best shoe store in the 90210!) You’re either the best at something, or you’re just another voice in the crowd getting fleeced by just another run-of-the-mill ad agency or “marketing firm.”

Before you start wasting money on advertising, ask yourself what your super-special value to your users/customers/clients truly is. Maybe you have the best prices. Maybe you have the most comfortable meeting rooms. Maybe you have the most square footage of any gym in your area, or the freshest produce, or the most knowledgeable staff, or the fastest check-out. It doesn’t matter what that something is as long as it is something concrete (as opposed to another lame marketing spinfest).

Whatever your value differentiator is, whatever your brand’s value advantage is (or should be), this is what you need to invest in FIRST. Once you have that aspect of your business nailed down, THEN and only then should you even bother with advertising.

A few days ago, Seth Godin posted some great advice to college grads on his blog: Only borrow money to pay for things that increase in value. A pair of shoes or cool clothes never increase in value. An education or professional experience, however do. Great advice, especially in the crux of our current economic/credit crunch. The same applies to businesses, which is why Seth’s advice is so damn relevant to the discussion today.

Perhaps more relevant to today’s topic is a slightly tweaked version of Seth’s advice: “only invest in things that increase in value.”

Like shoes and clothes, advertising never increases in value. With advertising, you are at best buying a small percentage of the public’s attention across a very narrow sliver of space and time (and paying a premium price for it.) Before you know it, your advertising budget is gone, and so is that very expensive bubble of attention.

Investing in better products/services, better people and better processes, however, makes a whole lot more sense as these things never lose value. Great employees, great products, great customer experiences and fostering a unique relationship with your fan base are the types of things worth investing in. These are the true foundations of a great brand. These are the types of things that will help strengthen your brand equity.

Advertising never translates into brand equity unless these foundations exist to support it. Even so, the more solid the brand’s foundation, the less relevant advertising becomes.

Starbucks doesn’t advertise and I’m not sure I’ve ever seen a Whole Foods ad anywhere, yet millions of people drop solid stacks of greenbacks there every year. I don’t shop at Target, wear Rudy Project sunglasses, drive a VW or crave a BMW because of advertising. Other than creating awareness for a product that hasn’t managed to capture anyone’s attention yet (red flag), advertising does nothing to impact most companies’ growth.

Building a strong reputation by developing great products, buzz-worthy experiences and generally delighting customers/users is a much stronger strategy than paying loads of cash for advertising.

Have a great Wednesday, everyone. 😉

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Brains on Fire‘s Justine Foo (PhD) on the sustainability of value props, innovation, and the courage of looking beyond conventional ROI:

Maybe it’s the idealist in me, but I’m hoping sustainability isn’t just a trend. I’m hoping this is the beginning of a paradigm shift toward more sustainable business practices in general. Not just with respect to the use of renewable vs. non-renewable resources for manufacturing. But also with respect to the kinds of consumer goods we innovate, and how we communicate about products and services to people. I long to see sustainability as a price of entry for doing business, and yes marketing. Wouldn’t it be nice if you actually kept, for example, 80% of the mail you get instead of throwing it straight in the trash?

We spend billions of dollars on communications that are short-lived and sadly waste paper, vinyl, and other things. We know that mass advertising isn’t having the impact it used to, and that we need to look to other venues like word of mouth. But even then we’re still thinking short term; creating buzz, not lasting energy and enduring excitement.


You’ll think I’m crazy. But I’m hoping that oil prices stay high. That the “crisis” mainstream advertisers are in doesn’t subside. That consumers continue to grow their demand for pesticide-free, natural, organic. Even that food prices rise. It’s instabilities like these that drive REAL change. Why? Because they create the motivation for finding a better way to do things. They force us to innovate and not relax back into the status quo.

Marketing, like manufacturing, stands at the doorstep of a great opportunity. An opportunity to revolutionize how we think about growth, measure return, and exist in relation to the communities that support us. Will we invest in developing better, smarter, more efficient ways to excite people about our products? Or will we continue to play the numbers game and bask in a false sense of security we feel when we’re promised a reach of thousands and millions of people, even when our strategic objectives have moved beyond raising awareness.

It will take courage to look beyond conventional ROI. It will take dedication and creativity to see new ways to measure return. It will also take companies demanding sustainability from their marketing departments and partners. And the recognition that it emerges from passion and excitement, not impressions.

Source post.

If you think that the gas prices comment is harsh, well… yeah. It is. But when we’re too set in our ways to make necessary changes on our own, the universe has a funny way of using the foot-in-ass technique to get us to move. It may not be pleasant, but that’s just how it is. Deal with it.

The same is true about business. Way too many companies are still in denial mode: “We’ve been doing it this way for 50 years and it’s worked fine!” (Yet their business is going down the drain and they can’t figure out why.) Wake up and smell what’s cooking. Numbers don’t lie. Customers don’t lie. Your bottom-line and market share don’t lie. Winners win and losers lose: What is true of athletes, nations, products and even species is also true of marketing campaigns and businesses.

Reality is often too harsh to bear. True leaders accept reality and deal with it. Far too many business executives, however, are not leaders. For them, competition, price pressures and innovation are the cosmic kicks to the rump that force them to cast their “business as usual” mentalities aside and get back in the game, sometimes much too late, when at all

Leaders and the companies they head will survive. Posers will not. I say let natural selection, market forces and user/customer communities sort them out.

Great post, Justine.

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Every day, I am amazed at the sorts of things people are afraid of.

Perhaps because of my time in the Fusiliers Marins, – and because a handful of my friends are in hot war zones where death could come at any moment from a sniper’s bullet, landmine, rocket, mortar shell or IED, – I am not really all that phased by the thought of getting yelled at by my boss or looking bad when one of my projects doesn’t pan out the way I thought it would.

It isn’t to say that I don’t worry about office-related catastrophes. I don’t want to look bad in front of my peers. I don’t want to get yelled at by my boss. I don’t want to do anything that will make anyone I work with or work for think twice about letting me develop and execute their next marketing strategy. I get paid to deliver great work all of the time – not just some of the time. Like everyone else who is serious about what they do for a living, I don’t ever want to screw up. I don’t want to be wrong. So yes, like most of you, fear of failure is part of my world.

That being said, I make a choice every day not to let that fear get in the way of turning ambitious and often unproven ideas into a reality. Why? Because fear of failure is purely a vanity-driven fear. It’s bullshit. Heck, it’s pathetic and inexcusable once you’re over the age of 30.

Do I put my reputation on the line every time I take on a new project? Absolutely. Do I risk a black mark on my “file” every time I turn the dial a little further and push past our comfort zones? You bet. So what. What’s the worst thing that could happen if one of my projects doesn’t deliver? You take your licks, learn from your mistakes, and try again.

What I have found is that failure is a much more effective teacher than success. Taking chances and finding out how things work or don’t work makes you a more effective leader. You learn to ask “how can this go wrong?” early on in the planning process. It marries curiosity with wisdom, which is always a good thing. Conversely, sitting in an office doing the same crap every day for twenty years for fear of screwing up and looking like a fool doesn’t do much except turn you into a warm piece of expensive office furniture.

When you put things in perspective, taking a few chances here and there at work with the goal of improving your company’s position, growth rate or bottom line pale in comparison to working in a place where bullets and shrapnel (instead of a few angry words behind closed doors or some unpleasant moments during a presentation) are the threats you face every day.

Facing bullets and bombs every day takes a lot more courage than your boss occasionally taking a verbal dump on you.

Earlier today, ex-Pakistan prime minister Benazir Bhutto was assassinated, just days before elections in her country. Bhutto, a woman, opposed a predominantly patriarchal government in the face of hatred so intense that death threats were a daily reality for her. She could have backed off. She could have thought about the risks and rationalized that perhaps retiring from public life, playing things safe, just flying under the radar and making a living without making waves was the smarter thing to do. The safer thing to do. But instead, she chose to stand for something. She chose to be an agent of change. She chose to give fear the middle finger and stand up for what she thought was best for her country and for her peers. Her murder today makes me very sad.

The kind of commitment, the level of responsibility and professionalism, and the unbelievable amount of courage that men and women like Benazir Bhutto display in their lives and careers help put things in perspective for me: How can I ever be afraid of things like petty office politics and the occasional little career dings when my world is a climate-controled office thousands of miles from the nearest war zone?

When most of us take a chance at work, the risk isn’t an assassin’s bullet finding us at our desk. It isn’t an RPG ripping through our windshield during our morning commute. We aren’t going to get shanked or strangled with piano wire in the executive bathroom by a couple of pissed off junior VPs. What is there to be afraid of? I mean really. What is there to be afraid of? A frown? A few angry words? Missing out on a promotion?

When did we become such wussies?

My advice for you today is this: Be engaged. Be bold. Change the game. Leave your competitors in the dust. Rewrite the rules. The worst thing that’ll happen is that you’ll occasionally screw up , but you’ll also occasionally score big, so the score won’t look as bad as you think. Most of the time, as long as you did your homework and set out to execute a well-thought-out plan, you don’t really have much to lose.

Nobody is going to put a bullet in your head if your last marketing campaign fell short of the expepected ROI. You may go down in flames, but at least you’ll have tried your best, and there’s a lot to be said for that.

Stop playing it safe. Go on the offensive. Either commit or go home.

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