Marketing ROI: towards the end of marketing as bullfighting.

Trying to answer the delicate question of ROI used to bear, until recently, a significant risk for the Marketing function, and for thrill seekers, an opportunity to exhibit talents resembling bullfighting, due to the fearless cleverness and agility required to circumvent the question. With the risk of disappointing aficionados however, it is now time to put the muletas back into the closet, to leave the arena and adopt a 21st century marketing  practice: one where the marketing measures its effects, compares them, optimizes them, is accountable and eventually invited to the board room. Indeed, innovative modelling tools now exist that can actually step change the situation and offer real time measurement and ROI optimization to any rigorous marketing department, in a simple, flexible, affordable and effective package. Marketing as bullfighting is over. Marketing Modelling has at last entered the twenty-first century!

What marketing and bullfighting have in common...  

Let’s go back a few years. The issue of ROI has been haunting marketing departments since the beginning of the function, like a ghost question looking for its answer ... Of course, some departments, ahead of their time, had been able to figure out some answers, with rather complicated and expensive tools. But in most cases, anyone asking the question of ROI was unwelcome and showed concerns deemed irrelevant to marketing, as they had to do with this mysterious and somewhat trivial area also known as finance.

Then would come in play the art of the “bullfighting-marketer.” A unique art which consisted, through a few well executed muleta tricks, in softening up and taming the importunate questioner to send her back to her office and spread sheets, to the applause of less experienced, but keen to learn fellow marketers. Abundant mumbo-jumbo, arguments about long term effects, so difficult to measure as everyone knows, "soft metrics", intangible qualitative factors, supposedly much more telling than the trivial figures, anecdotes… everything at hand could be used. And the unwelcome one, baffled by the style, the figures, the variety of arguments and assertions whirlwind, bewildered by such maestria, would retreat, forgetting the original question as well as the way back to the office and its spread sheets. The feared question was circumvented, the ghost would continue to wander, if possible for a few more centuries, and marketing would get back to its more noble concerns.

 

How typical answers miss the point

Needless to extend the metaphor any more. Indeed, the heroic (and fictionalized) gesture of marketing dealing  against finance injunctions is coming to an end. And the legend will lose what the function gains in terms of credibility.

Whoever thinks the above is a bit far fetched may consider the following example arguments, typically brought up to justify a marketing investment like an ad campaign:

-       "Our dealers love our new campaign"

-       "The feed back of the focus groups was unanimous"

-       "Our new concept will establish itself over the long-term, despite no visible immediate effect..”

-       "Our new campaign increased the brand awareness"

-       "Our image improves on the key brand attributes"

Interesting arguments without a doubt, and maybe relevant for some of them. But unfortunately these arguments miss the point, as they have little to do with the concept of ROI, and moreover don’t show any evidence of it. Yet, these are the typical muleta tricks which many marketers have been forced to use, for want of anything better. And short of being able to simply, rapidly and transparently demonstrate how much one invested Dollar would generate in terms of additional income and profit, and how to improve its effectiveness.

Welcome to the 21st century   

At the same time, the fact is ... the 21^st century started almost 15 years ago. The marketing literature is now filled with buzzwords such as "real time marketing", “marketing automation", "big data” and so on, and yet we should be content with the same aforementioned old, unsatisfying and approximate methods and tricks? Fortunately this is not the case anymore. Technology is also step-changing the way modelling is done and brings to any rigorous marketing department the most advanced ways to answer the question of ROI. Whoever thinks that Marketing Mix Modelling is still reserved to the most sophisticated marketing organisations, with apportioned budgets, should think twice now. By exploiting the new capabilities of intelligent and adaptive algorithms, a new technology offers flexibility, transparency and results almost instantaneous for the price of an annual license on a PC. It won’t be the final blow that marketers were looking for when they thought of marketing as a bullfight. No need for final blow any longer. What’s required are tools that enable the conversation across organisations, be it marketing and finance, marketing and sales or else. Tools that provide deep insights, make marketing fully accountable and transparent, and build C-suite credibility.  Such tool is out now and this is good news for marketers.

Welcome to the twenty-first century. And for aficionados, don’t worry: you can still plan a trip to Seville,