When I was well into my decades-long career at IBM, yet at the crossroads of determining how to leverage capabilities associated with the “digital age,” I found myself in unfamiliar territory: having to defend my marketing budget. Summoned to a meeting by a newly appointed senior executive, this individual greeted me with, “I don’t really believe in all this social media stuff…I don’t think it’s any more than a passing fad.”
This was telling. IBM had consistently been recognized for its innovations (e.g., holding the record for most U.S. patents generated by a business). It prided itself as being on the bleeding edge of information technology advancement. Yet, this person’s comment demonstrated that senior management clearly hadn’t bought into the impact of disruptive new media and its inherent reach and capabilities.
Or rather, was it that they needed to better understand how to measure social media’s effectiveness through metrics that correlated back to our business goals and within business terms they were more likely to understand?
Remarkably, the murkiness around which metrics best determine the overall impact that digital marketing activities (e.g., web, SEO and social media) have on customer growth, net new deals, the value of an order, as well as calculating overall ROI for marketing investments, still exists, even as this new media has matured.
My long standing belief, borne out by proven results, is that looking narrowly at activity across one channel or solely at a singular set of engagement metrics, as an example, fails to adequately represent that it is the combination of tactics across multiple, online environments – working together, is what will deliver positive outcomes.
While of course it is necessary to understand channel-specific metrics in order to shift investment across a marketing budget and leverage opportunities unique to that channel, it is the integration of many programmatic activities – aligned to your business goals – that will ultimately drive results.
Simply put, integrated marketing refers to the process of coordinating your marketing activities to deliver a seamless, customer-centric, cross-channel experience. Channel appropriate content should be developed and aligned with a coherent and agreed-upon set of company business goals.
Vanity metrics (e.g., ‘likes’, ‘shares’) express low-level engagement activity and are of little value to executive leadership. Similarly, cost per thousand (CPM) and impressions don’t mean very much either. Impressions are the number of times your content was displayed. Stay away from looking at absolute conversion. It isn’t the be all and end all of measurement reporting.
To become invaluable to the executive leadership team, you’ll need to demonstrate how your work effectively impacts your company’s top-line growth:
Revenue growth and ROI are the two most important metrics executive leaders will use to evaluate whether the investment allocated to marketing is well-spent. Many companies now view marketing as an investment (ROI) that needs to be justified, like any other expense.
There is still more work to do to present metrics within a business context. However, as marketing departments have shifted from cost centers to revenue drivers, senior managers are beginning to recognize their CMO colleague’s value and contribution to the organization.
The most basic way to calculate the ROI of your marketing program is to integrate it into the overall business line calculation.
(The higher the percentage, the better your ROI)
By subscribing to the premise that each marketing channel activity supports the next, you’ll be able to demonstrate that it’s the combined effort of all cross-channel tactics in market that enables the organization to realize a higher ROI. The ability to calculate each individual channel’s contribution can become a futile exercise, as it can be difficult to know which channel is responsible for which customers.
ROI not only shows the impact of each marketing dollar spent, it also helps to plan future budgets and strategies.
Return on Marketing Investment (ROMI) is a subcategory of ROI, because here the cost is incurred on marketing. Using integrated marketing for a product, service or solution could be expensive across the varied ‘tradigital’ channels at your disposal such as company website, social media, influencers, sponsored online content and even print, radio or television. To gauge the overall of that integrated marketing approach, ROMI can be very effective. It is measured by calculating total revenues against marketing investment.
The ability to calculate ROI and focus on overall growth enables you to speak the language of business executives. In Part 2 of this blog, I’ll talk about customer-specific metrics that must be included your marketing metrics dashboard.
Leslie Reiser, a business strategist, lead generator, and speaker is the managing partner of LCReiser Consulting, LLC. An award-winning digital marketing professional during her multi-decade tenure with IBM, Reiser has an extensive skill set in developing social media marketing programs, forging highly profitable partnerships, and deploying complex, global content and influencer marketing programs and capabilities that deliver significant business results across a diverse customer set, including IT channel partners. Leslie has led sales and marketing organizations to achieve breakthrough performance incorporating social, digital and new media marketing. Her expertise lies in growing business from digital investments through targeted content, SEO, web merchandising, marketing automation, actionable analytics, ROI analysis and end-to-end response management. She is also affiliated with some of the top agencies within the industry.