Mind the gap: Hard to calculate marketing ROI?
We strongly believe that there is much that can be measured in digital marketing; in fact we often promote that one of the benefits of digital marketing over other types is the ability to track ROI (return on investment).
However, even with the best tracking and attribution systems in place there is always going to be a small proportion of digital marketing spend that can't be sufficiently tracked or attributed. On top of this, we're finding more and more frequently that Marketing Directors, MDs and CEOs are choosing to invest in meaningful high-quality brand campaigns that are much-needed, but hard to track in ROI terms.
If you're wondering why clients are increasingly taking this view, read on!
Why would you invest in brand level marketing that is hard to track from an ROI perspective?
A strong and effective brand may be hard to quantify in financial terms, but brand loyalty and resonance with customers is priceless. Companies considering to strengthen their brand and competitive position in the marketplace with the right marketing can be a wise investment. Some may question why spend is needed under the heading of 'brand marketing' however. Considering how much brands invest in print and TV advertising, this investment may actually be relatively small in numbers, but feels like a medium to large investment when compared with a digital marketing investment. This is often because businesses have become quite rightly accustomed to the benefits of immediate high ROI and visibility of associated data that good quality digital marketing and tracking can bring.
What we are looking at here is investment in the long-term with brand building, vs digital marketing campaign investment which tends to be more short term, and varies depending on audience and channels. For example, although a campaign to collect email addresses or Facebook likes might be a short term ROI solution, but a long-term multi-channel brand building approach would look at forming a deeper, more emotional and robust connection between the brand and consumer over time, and look at lifetime customer value (LCV) and wider revenue as its metrics. Those areas are fundamentally much harder to track, especially on a last-click basis, which may make some nervous. However, for those who can see the long-term potential, the potential benefits become clearer to an organisation.
Why spend money on emotion?
Some look at brand building to fix a problem such as customer retention, spend or loyalty, and some simply want to improve the quality of brand communications in order to grow the emotional connection and create a better understanding of the real value of their brand.
This emotional connection can too often be overlooked in what can be a cold hard numbers game in digital marketing metrics. At the end of last year we attended the CIM event in Birmingham; 'Now that’s what I call creativity; Storytelling in a digital world'. At the event, Anthony Tasgal presented a view that brands need to take the focus off metrics and consider the important elements of storytelling for creating that emotional connection with a consumer. Playing devils advocate with a team of marketers in the room, he argued the following reasons to stop being a 'slave to the algorithm!';
- The behavioural economics argument - we’re not rational, so why do we treat audiences this way?
- The psychological argument - surprise triggers real emotions, not information.
- The emotional argument - we receive so many messages in a day now that we shut off. Humans crave the richness and language of the message, creating a deeper and empathetic connection.
- The communications argument - we need to convey meaning, not messaging. We should be engaging in a two-way conversation, but put too much focus on the one-way message. Meaning always beats truth.
- The physiological argument - traditional storytelling generates oxytocin which keeps the audience hooked.
Would your brand benefit from longer-term campaigns?
ROI aside for the moment and given the above, you might want to start to consider how you can start to use storytelling and longer term planning to build a more emotional and long lasting relationship with your customers. This will help create a deeper connection, which, done well, can result in increased brand loyalty, increased AOVs, increased customer retention and most importantly in the end customers who are so bought into your brand that they have significantly higher lifetime value (LCV) and are true advocates for your brand and values.