Measure Marketing ROI in a Digital Age
The first question is the age-old agency issue of metrics and how to quantify return on marketing investment. In the early days, way back a decade or so ago, the big hope was that digital would create a new era in metrics -- it would be possible to track marketing spend against marketing results and get some solid figures on ROI. Sure enough that's what happened, more or less, in the simplest area of marketing: display advertising. Google applied algorithms to classified ads and created the global money machine called AdWords that generated most of the company's US$ 43.7 billion in advertising revenue last year.
The trouble for metrics is that most marketing needs to use a lot more elements than simple display. Marketing was already complicated back in the days of "traditional" marketing when the media channels could be simply divided into Above-the-Line and Below-the-Line. Now that digital marketing provides many more options in addition to traditional marketing, the variables are a lot more complex. My background is in science, so I know just how hard it is to plot cause and effect when there are multiple variables in a complex system. And yes, of course digital has provided some great tools to collect and crunch the numbers, but it has also made the numbers a lot bigger, by an order of magnitude.
One big confounding factor in the metrics problem is that a lot of marketing can't be purely digital. Even in old, mature markets, smart marketing can't always exclude traditional elements; in new, emerging markets it's even more important to include traditional marketing tools. As soon as non-digital elements come into the mix, tracking goes offline - literally; we're back to the approximations of pre-digital metrics. This makes it far more complex to gather enough good-quality data that can generate meaningful metrics, especially if a campaign runs across several regions or more than one country.
I'm sure that in time, industry math wizards will refine the metrics for campaigns that are purely or mainly digital, but what about integrated campaigns? This brings me to the second issue on my mind.
Creating Innovative Integrated Marketing
Reading a couple of very interesting and well-argued articles in ClickZ.Asia about future developments, I was struck by a phrase: "The core business of an ad agency will always be focused on communications not innovation." While I agreed with a lot of the points in the articles, that phrase stuck out as a limited and limiting definition of our business. At my agency, we present a very different vision; we talk about being "future-focused," "more digitally innovative," "transforming brands," "altering consumer perceptions," and helping clients to "grow their businesses while also contributing vital, socially responsible solutions."
It seems to me that agencies should not see communication and innovation as the either/or choice implied in previous articles; it's a both/and imperative. Consumers are increasingly finding innovative ways to integrate digital technologies into their life; consequently, agencies need to be focused on creating innovative ways of communicating with them. This doesn't mean that agencies themselves must develop new digital devices, but we should at least be making innovative use of what's available. And we have a long list of digital firsts, starting back in 1994 when we placed four of the first 12 ads on the Internet. More recently, we created the world's first Twitter race converting tweets into reality for Citroen, launched Social Xplorer, the first social media NPD tool, were the first network to release a HD digital radio station, pioneered the first ever YouTube masthead with an augmented reality experience of any kind and accessible on mobile for Volvo, and created the most viewed piece of advertising content online (Guinness World Records) for Evian Rollerbabies.
Not only should clients expect their agency to be using new devices and new apps in innovative ways to make integrated campaigns more effective, but the campaigns themselves should also be innovative in what they aim to achieve. We believe our job is no longer about getting consumers to see more ads so that we can "sell more stuff"; it's about using our creativity to make a brand more interesting and engaging; it's about creating worthwhile connections between consumers and the brand. It's not about delivering carefully scripted messages about the brand to consumers; it's about creating occasions for consumers to spend time with the brand so that they can take away their own thoughts about it.
This doesn't make life any easier for people who want the guarantees of robust metrics to guide their marketing investment choices. If agency teams are told that their ideas must have a ROI that can be accurately measured, their thinking is going to be limited; they're less likely to create bold, innovative campaigns. Conversely, imagine the potential of agency teams briefed to be as creative as possible within a budget, but without an ROI metric obligation; they will be in a better position to create an innovative integrated campaign that does an effective job for the budget.
Naturally there will be a majority of clients who decide it's wiser to proceed cautiously; they will opt for the safer marketing approaches in which everything can be measured and managed. And there will be a minority of clients who weigh up the options and decide it's worth taking a chance on something bolder and more innovative. Both approaches can deliver solid business results, but only one of the two approaches will shape the future; only one of the approaches will create marketing that's memorable over time; only one of the approaches holds out the prospect of an unexpected big win.
Naomi Troni is the CEO, Southeast Asia at Havas Worldwide.