Time to thaw our chilly reception of ROI?

ROI, ROI, ROI…if you happen to work in marketing and by now have not heard “ROI,” you’re probably still dialing up to the Web using a 14k modem on a party-line and are awaiting the 14,500,000 Google search results on “marketing ROI” to load in your browser.

Let’s face it: marketing ROI is hot, and rightly so, as accountability is being driving down throughout companies, and Chief Marketing Officers and their staffs are being held to financial standards on their marketing spends like never before.

Even so, free-wheeling marketing types are being thrust into the uncharted waters of marketing metrics and measures, and I would venture a few guesses as to why marketeers may be giving a chilly reception to ROI, and why they are reluctant to cheerfully adopt it in all they do.

One reason: Marketing folks aren’t quite sure how to approach ROI, and besides, they’re too busy launching the next campaign. Plus, they don’t know the intricate language of finance and consequently don’t want to appear foolish to the finance types. (Admit it: The mere mention of Net Present Value is enough to cause a marketing maverick to break out in a cold sweat.)

On the other hand, for those who have taken tentative steps down the ROI path, another reason for not hopping on the ROI bandwagon is perhaps that they aren’t liking the subsequent results showing up on those reports. That “feel good” marketing magic of yesterday is now being replaced by cold, hard data and click-throughs, and bonuses are now tied to Key Performance Indicators. And this is probably resulting in some tough conversations with the CFO, not to mention increased budget scrutiny and shrinking tenures for CMOs.

Yet another reason for a cooler reception of ROI could be the clash between marketing’s sacred “creative” ground versus the new march toward measurable marketing metrics.  In a Dec. 9, 2005 ClickZ article Metrics Madness, writer Pamela Parker discusses this very issue.  In it, she says that digital media is incredibly measurable, perhaps to the point of data overload and metrics madness, at the expense of creative.

“What happens when we’re so busy measuring immediate pageviews or conversions and fail to do the brand-building work that makes people want to buy in the first place?” Parker asks.

There undoubtedly will always be tension between CEOs, CFOs and CMOs on this issue of marketing’s need to spend money, a company’s need to control money, and marketing’s ultimate contribution to the bottom line. But at the same time, things with ROI will shake out in time, and ROI principles and practices will become intertwined into all a marketing staff does.

Bottom line?

Now could be a good time to thaw our chilly relationship with ROI.