Return on investment is missing in action
A new article on Martech.org says forget about predicting ROI in today's lightning-fast digital environment. Instead, develop agile, reactive response systems.
When business spends money on anything, it expects to see a "return on investment"-- a lift that has some correlation with the spend. This would be fine if marketing was a machine, with fixed, measurable inputs and outputs. Except we are living in "the Information Age", so Industrial Age accounting will fail to notice what is really going on.
Marketing often appears as a cost sink on the balance sheet. It's relationship to output is not always obvious. Kathleen Schaub, marketing management and organization strategist, and Mark Stouse, chairman of Proof Data Corporation, want to shed some light on this situation. Schaub focuses on how complexity affects marketing, while Stouse takes a deeper look at analytics. These two angles converge on a common point: the old way of measuring marketing ROI misses a lot, providing inaccurate guidance for marketing efforts.
Schaub goes into further detail in her paper "Marketing Is Not a Vending Machine." "Markets are what science calls complex adaptive systems. The interactions of many independent agents, both individuals and enterprises - customers, companies, influencers, partners, and governments, produce feedback loops that cause situations to constantly change. Change produces many unknowns." Schaub wrote.
Those feedback loops have speeded up, thanks to globalization and digitalization. "There's no breathing room," Schaub told us, so marketers have a hard time keeping up. It is only in the past several decades that data and computers have finally provided a way to see this happening. "Now that things have speeded up, we can see these patterns in the data."
When business spends money on anything, it expects to see a "return on investment"-- a lift that has some correlation with the spend. This would be fine if marketing was a machine, with fixed, measurable inputs and outputs. Except we are living in "the Information Age", so Industrial Age accounting will fail to notice what is really going on.
Marketing often appears as a cost sink on the balance sheet. It's relationship to output is not always obvious. Kathleen Schaub, marketing management and organization strategist, and Mark Stouse, chairman of Proof Data Corporation, want to shed some light on this situation. Schaub focuses on how complexity affects marketing, while Stouse takes a deeper look at analytics. These two angles converge on a common point: the old way of measuring marketing ROI misses a lot, providing inaccurate guidance for marketing efforts.
Schaub goes into further detail in her paper "Marketing Is Not a Vending Machine." "Markets are what science calls complex adaptive systems. The interactions of many independent agents, both individuals and enterprises - customers, companies, influencers, partners, and governments, produce feedback loops that cause situations to constantly change. Change produces many unknowns." Schaub wrote.
Those feedback loops have speeded up, thanks to globalization and digitalization. "There's no breathing room," Schaub told us, so marketers have a hard time keeping up. It is only in the past several decades that data and computers have finally provided a way to see this happening. "Now that things have speeded up, we can see these patterns in the data."
| ROI for marketing is not there." Schaub said. "Never has been. Never will be. Not in the old standard sense." |
Pizza Shop Profits-Make Thousands
The contents of this post may settle in transit.
Pizza Shop Profits-Make Thousands
The contents of this post may settle in transit.