One of the greatest challenges for any good marketer is discerning between trends and transformations. They often look and feel the same at the start, moving through the world of marketing like a virus until everyone is speaking the same 3-letter acronyms—like CRM, CMS, SFA. But while a trend heats up and cools off, a transformation continues to simmer, ultimately changing the practice of marketing. One such transformation is brewing right now, which many have written off as a trend. Don't make the same mistake. The next time you hear “ROI,” resist the temptation to roll your eyes, and think instead about the impact those three letters will have on your career. If you're in marketing, the impact will be dramatic.
Roi Means Accountability
Beyond the cookie-cutter positioning statements that promise “maximum Return On Investment”—a trend which will die too slowly—the ascendance of financial terms into marketing language is a signal of the growing pressure to quantify the financial value of each marketing investment.
For hard-driving businesses, ROI means nothing less than accountability. If I give you a dollar, I expect a dollar-fifty in return.
The sudden celebrity of ROI is due largely to the excesses and failures of the recent boom and recession—which is why many call it a passing trend. But the real pressure for accountability is being driven by factors far more durable than the cycle of our economy, namely: advancing technology and increasing market complexity.
Technology Makes it Possible
There have been numerous attempts to quantify ROI in marketing, dating back at least to the early 1900s, when direct marketers tracked responses to advertising.
But most marketing return analysis has avoided financial measures for MROI and concentrated instead on "softer" qualitative measures such as awareness, attitudes and recall, while many growing businesses routinely neglect any marketing measurements at all.