Marketing ROI discussions are de rigueur at quarterly business reviews (QBRs). And the parade of pundits is close behind, alternatively equipping and lashing marketers with knowledge, opinions, and analyses on how to measure and improve ROI. For example:
- Harvard Business Review in “A Refresher on Marketing ROI”
- Marketing MO on ROI “Formula and Use,” with visual models and video
- Marketo shares “How to Measure the ROI of Marketing Programs” with charts
- Even Forbes and Investopedia are in the act – and countless others
Clearly, this is a powerful topic that every astute marketer must have at his or her fingertips. And business leaders of all stripes are now well-trained in the art (if not the science) of interrogating marketers each quarter about marketing ROI.
There are some problems with this, one of which I illustrate in this imaginary dialog.
“I want to know what’s working and what’s not working,” said the CEO at a QBR. “These events, for example, how well did each of them perform? Let’s go through them all, one by one.”
“Why?” asked the marketing leader. (He or she shouldn’t be so blunt to a CEO, but I’m keeping it pithy.)
“So we’ll do more of the stuff that’s working and stop doing the stuff that isn’t working.”
“I’m running integrated campaigns, each with multiple tactics. Not all tactics drive conversion directly. But all tactics, when properly orchestrated and integrated, work together towards campaign goals.”
"Where are we on the agenda?” said the CEO, glancing at a watch and mumbling “smartass.”
Where should you target ROI analyses? The campaign. Campaigns should deliver an aggregate ROI that demonstrates one dimension of marketing’s value to the business. But tactical ROI is a different discussion – one best kept away from the mixed and sales-heavy audience at a QBR.
non-marketers can grasp tactics more easily than campaigns. Think about a trade show: who was there, how many, were the companies large or small? You can view pictures and hear anecdotes from attendees. But campaigns are abstractions conjured up of numerous tactics executed at different, overlapping, times. Some tactics, like events, are readily grasped; others, like SEO, are less accessible.
Tactical ROI helps improve the impact of a campaign. Campaign ROI helps us discern whether marketing spending is achieving marketing objectives. Tactical ROI discussions are better left off the QBR table. Unless of course your leadership team insists. In that case – squirrel!
What do you do when campaign ROI is poor? Stay tuned for my next post on Marketing ROI.