Digital Marketers Are Wrong to Focus Only on ROI

Apr 21, 2013 by

Digital Marketers Are Wrong to Focus Only on ROI

If you work in digital, you’re probably getting a bit tired of the ROI question  by now. We are all tasked with justifying our pitches and projects with proving  where the ROI lies directly. We need to show that whatever ad, video or app we  run, directly leads to X number of sales online, or X number of conversions.

However, we’ve all been making a huge mistake. We (marketers, brands,  agencies) have assumed that because you ‘can’ buy online, whatever you run  online ‘should’ lead to direct sales. TV never had this problem because you  could never get into the TV to buy the product. Billboards, radio ads,  cover-wraps, inserts, advertorials all never had this problem for the same  reason.

Since it’s physically possible to buy from the place that you’re running your  digital campaign, we’ve assumed that this is how we judge success. That’s where  we’ve gone wrong, and where we will keep going wrong. We’ve thought that because  you can just be a click away from buying a product or converting on a website,  if users don’t do that straight away, it’s a failure. So the ‘trust’ remains in  costly methods such as TV, which will never be expected to prove this because  they can’t.

Buying Behaviour

To understand this, we need to think about the process of how we buy  something versus what we engage with online. A recent study released by Invodo  found that consumers are174% more likely to buy something after watching a  video about it online. While this is a wildly encouraging figure that will  probably need to be toned down a bit, this finding in itself is significant.

The fact that we’re more inclined to buy something from a brand after  engaging with it online is what’s important. An increased likelihood to buy is  all that should ever be asked of an online campaign, particularly one that is  content led. To force a transaction at that point, or to judge that as an  indicator of success is detrimental.

To understand consumer behavior online, we’ve to properly understand the  devices that we’re using, and how we use them. Both the Web and smartphones have  opened a wealth of possibilities for what we can access. We live tabbed lives  where we could be doing our online banking in one tab, while researching a  holiday, working or chatting with a friend in another.

We know how to organize ourselves between tabs. We don’t necessarily want a  brand to come along and get us to switch our behaviour in one to do something  different. It’s why you shouldn’t ever look for positive referral traffic from Facebook and why  we’re generally advised to never have more than nine tabs open. We want more but  we just can’t handle it so don’t force your customers to.

We’re All Inbetweeners

The way we use online now has changed massively, thanks to mobiles. The way  in which we access content on our phones is usually in an ‘in between’ state.  We’re in between trains, people in a queue, or between one thing we were doing  and the next. This mode is not exactly conducive to a buying state. Instead,  you’re more likely to be influenced in this stage before going through to  complete a transaction in a store, or when you’ve set aside that specific buying  time online. You can’t be expected to track the success of this transaction down  to an engaging piece of content online.

Let’s think about online video here. Recently, I was trying to make a caramel  sauce while following a recipe on my iPhone.  After two stressful attempts, I quickly looked for a video for this and found  one on another site. Now what really should have happened is that the site I was  originally on would have had a video demo of the caramel sauce stage ready for  me, and that probably should have been sponsored by someone like Tate &  Lyle.

That would have been great and I may well have been a bit more likely to buy  Tate & Lyle in the shop next time because I would also have assumed that was  the only way to get a perfect caramel sauce. Now I was certainly not in a state  to buy a pack of sugar there and then, I had no need to, but I did need content  that wasn’t given to me in the way it could have been, which could have  influenced my next purchase.

The way we engage with content and the way we buy things are entirely  different, but since those things have now combined onto one device, we find  ourselves looking for answers in all the wrong places.

The Sum Of Our Activity

Looking for a big number also goes against all the benefits that social  technologies has bought. TV benefits from larger budgets because it’s a trusted  medium where you can pretty much guarantee a sizeable audience, but this isn’t  what social media was meant to do. We regularly extol the virtues of being able  to talk to consumers right down to an individual level, tailoring content, and  going to where your audience is instead of forcing them all into one place. This  has made us notice brands and their communications perhaps more than ever  before.

This is great, but we can’t then expect this approach to answer the demands  of the big ROI question. The success of your activity is that the people you’re  trying to talk to are noticing you – whether by following, replying, or sharing  your content. It is difficult to then combine this into a total audience figure  that proves the ROI of what you’re doing. This type of thinking has  unfortunately lead to the obsession with the number of Facebook fans you have,  leading some brands to just buy these just to prove a point.

Any one consumer can be judged by multiple points of interaction. They can be  a Facebook fan, a follower on Twitter, someone redeeming a coupon on Groupon, a video  viewer, etc. We’re not just an online buyer or someone ‘converting’ on a website  so it is massively misguided to judge the success of your campaign on this  metric only.

This is ignoring the multitude of other touchpoints a brand has with their  audience where success can be judged. We take on any of these roles at any time,  or sometimes not at all. I’ll probably dig out a link a friend shared to an art  site when I want to buy a painting. This could be six months down the line, far  too long to get noticed on any campaign report, so my contribution to the ROI  will be overlooked. Combine the buying behaviour of all your customers, all who  function individually, and you suddenly realize why there will never be a proven  ROI online.

Use(you)r Data

This is why having a data strategy is important and why you have to invest  serious time and money into this. You can’t force your users from one activity  to the other, but smart data collection can help yourself to be omnipresent and  be right there when your customer needs you.

So you might decide to collect an email address through a Facebook  competition, or introduce a freemium model for content on your site, where an  email address is required to unlock premium content. You’re collecting the data  then to use later, and this shouldn’t interrupt what you’re doing there and  then. Big data is not new, but it is more important than ever before as it  allows you to get in front of these connected consumers, through many devices  and mediums.

In a recent study from eConsultancy, 70% of marketers rated email as ‘excellent’ for driving  ROI after search. This is encouraging for the success of digital marketing  efforts, but you need email addresses in order to run an effective  email  marketing campaign. This is where social comes in, and it’s where your data  strategy plays a part.

Social media has allowed us to be in front of customers more often, but these  channels are not likely to be where the conversion takes place. If we know email  works for this, then make this an integral part of your social strategy and  instead tailor your activity to prioritize data capture that can be used in  future campaigns.

However, remember that it’s not all about driving through to online directly  to judge your ROI. Your email might contain a coupon that can be taken into  stores for when your customer is ready to use it. The ROI might never happen  online, it might just start there, but that’s great too.

Read more: SimplyZesty 

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