Is ROI killing marketing?

During a recent panel discussion I participated in at the Convergence 2007 event, I started to realize that ROI is dictating certain types of behavior by marketers. Looking at any marketing expense purely from an ROI perspective would lead you to NOT do certain types of things.

For example, consider internal branding campaigns. With little to show other than happy employees, this initiative would fall to a second tier initiative since lead generation activities would normally be needed to calculate your ROI. As a second tier initiative it is fine. But who can afford to have that as a first tier initiative anymore if you are only judged on ROI?

What about offline advertising? We have all seen the numbers lately showing how dollars are flowing from offline to online at a double digit pace. Is this not fueled by the continuing quest to get ROI?

And what CMO would come in and do a 100% brand awareness play and expect to be able to keep his or her job at month 24? The average tenure of CMOs is 23 months, the shortest of any C-suite role. Isn’t ROI driving this type of behavior too?

I exaggerate to prove the point and demonstrate the impact the drive for ROI is having on marketing. Don’t get me wrong. ROI is important. But when you look only at that metric, you tend to do things that ring the cash register, rather than build your brand.

5 comments to Is ROI killing marketing?

  • Tracey

    Paul, I’ve been reading your blog for some time but have never posted a comment. I’ve found it very insightful.

    Thank you for this post. I believe in measurement, but I think that often people forget the value of qualitative results and objectives. I think the over-emphasis on quantitative ROI sometimes comes from insecurity — trying to prove that we, as marketers, are valuable. We’re so used to people questioning why marketing is important that we rush to prove it with numbers alone. But when we leave out “soft” results, we’re leaving out an important part of the big picture.

    Business strategies can’t be tested or formulated on numbers alone — indeed, some of history’s most influential moments came from non-quantifiable hunches, sparks, and middle-of-the-night inspiration… and weren’t proved with dollars or customer surveys.

  • Paul Dunay

    Tracey

    Love your point!

    We cant forget about the softer benefits of marketing across the organization and externally as well.

  • jaded

    Great point. As a marketer in a small business our team struggles with this issue daily. Of course every orgnaization wants to get a return on their investments, but there is no easy way to justify the soft benefits, since they take so much longer to understand. I’d love some ideas on how to quantify branding and awareness, as these are essential for any organization.

  • Anonymous

    Paul, you make a valid point. At the end of the day you need a healthy mix of both awareness/branding and perfromance driven programs. However what most people fail to understand is that with in the realm of online marketing when it come to awareness/branding campaigns, one can not only measure qualitative metrics but also measure quantitative metrics that drives performance.
    With a roaster of tracking/reporting packages available out there and the maturity that online marketing has reached, most integrated marketing teams still under-index heavily on knowledge base about what’s available and hot to get it done. Till such time marketing organizations will loose the battle to ROI driven marketing.

  • Paul Dunay

    Dear Anonymous

    totally love your point – you have some great packages out there that if you use them wall to wall you can begin to get a great picture of each individual customer/prospect visiting your website. And then you can re-market to them in a very targeted way.

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