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Digital Marketers All Got This Thing Wrong About ROI

Apr 21, 2013, 23:30 IST

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.

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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.

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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.

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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.

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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.

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