Most business people should understand the acronym ROI as the monetary return on an investment, but what is the new ROI of marketing?
Typically, when the return on investment is high, then the success of your investment is high. According to the article, “Understanding the New ROI of Marketing,” Susan Gunelius suggests ROI now has a new meaning. “No longer does ROI stand only for return on investment. Today, the new ROI also stands for return on impression, which encompasses two primary values — a hard metric and a soft metric.” With the expanded definition, ROI can now be considered as a more accurate measure of success. Gunelius explains the metrics of the new ROI are “the return on impression = eyeballs, return on impression – perceptions, return on opportunity, return on engagement, and the return on objectives.” Social media is at the height of its popularity and users are updating their status and tweeting about almost anything that comes to mind. With this rapid communication consumers are more impressionable based on opinions of their friends and connections when using their social media profiles.
The metrics are defined in an excerpt from the article.
Return on Impression = Eyeballs
The first metric you can track using the return on impression valuation is the number of people who actually see your ad, marketing material, or other tangible marketing piece. For example, online advertising can be tracked by the number of times an ad is displayed on screen to a person. This is particularly easy to track if you’re running pay-per-impression ads. Marketers love the hard metrics such an advertisement can provide. But that metric only tells a tiny part of the story.
Return on Impression – Perceptions
The return on impression metric is also a soft metric that focuses on giving a value to an essential component of branding — consumer perceptions of the brand. Remember, companies don’t build brands, consumers do by experiencing those brands, developing feelings for those brands and emotional connections to them, and talking about those brands with other people. Thanks to the social web, those conversations are far-reaching. Therefore, a marketing initiative performance analysis would be incomplete without analyzing how that initiative affected consumer perceptions of the brand.
Return on Opportunity
Measuring return on opportunity requires you to evaluate the opportunity that a specific marketing initiative presents versus the time and monetary commitment that effort requires. In other words, return on opportunity forces you to evaluate the indirect marketing potential of your marketing investments. This is particularly important when a marketing effort can take on a life of its own across the social web. Similarly, a marketing opportunity might not add to a business’ bottom-line today, but the indirect marketing opportunities that it could lead to as people discuss it and share it across the social web (and offline) can make that initiative be worth the effort now. Marketers who can successfully balance potential opportunity against effort will have a leg up on the competition.
Return on Engagement
Using the social web example again, return on engagement is a critical component of your marketing performance analysis because the conversations, sharing and word-of-mouth marketing that happen online can make or break a marketing initiative, a brand, and a business. The value of a positive online buzz about your brand, products, services, and business are difficult to quantify, but there is no doubt about how powerful they can be. Yes, you can use tools to track website traffic, content sharing, comments, and so on, but you also need to analyze how people are engaging with you, your content, and your brand. Remember, relationship brands are the most powerful brands in the world. Return on engagement can show you how well you’re brand is performing in terms of building and sustaining relationships with both consumers and influencers. The soft metrics data related to how and why people engage with you and your brand are extremely valuable to companies that prioritize them.
Return on Objectives
Analyzing return on objectives requires that you accept that not all goals are measurable with hard data. Sometimes, marketing efforts simply help a business move in the right direction to meet its long-term objectives. For example, a business that develops a content marketing plan and creates a useful repository of content on its blog, Facebook Page, YouTube Channel, and so on over the course of a year will undoubtedly move closer to its long-term brand building objectives thanks to those efforts. Return on objectives goes hand-in-hand with return on opportunity and return on engagement to give you a comprehensive, integrated marketing plan and tracking strategy that delivers the best results.
Together, return on impression, return on opportunity, return on engagement, and return on objectives give you a clearer picture of how your marketing initiatives are performing than return on investment offers alone. Today, focusing on traditional ROI only isn’t enough. The hard and soft data is available to you, use it. You can bet your competitors are (or will be soon).