Using Return on Marketing Investment to Save Your Assets

piehole on facebookYou hear a lot of talk about ROI (Return on Investment) in marketing these days. Especially these days. Many of you may not be as familiar with ROMI (Return on Marketing Investment).ROI is important but often difficult to prove. In an integrated marketing campaign how do you determine which tactic lead to which results? In today’s Web 2.0 World it gets even trickier because the traditional measurements don’t fit the tactics.

SOV - Share of Voice
PR uses Share of Voice measurements. For a doohickey company they would look at all the press coverage on doohickey’s and doohickey companies and see how many times their company was mentioned against the overall total coverage. What you want to be able to show is either an increase in coverage and/or that you are getting more coverage than your competitors.

CPM - Cost per Thousand (M of course being the Roman numeral for thousand).
I’m not a big fan of CPM but this is the standard that all media and advertising companies measure on. I’ve even seen advertisers use SOV, but that seems weird since all it really shows is that you spent more money than your competitors.

CTR - Click Through Rate
This is the performance measurement for online advertisers. Display advertisers often couple CPM with CTR. This matrix gives you a slightly better view of performance because it demonstrates how targeted your advertising is and how effective the creative was. But even this is a shallow victory, in my opinion, if no one does anything once they get to your site and most companies can’t effectively track how much of their traffic came from organic or paid and who did what when they got there.

Moving from ROI to ROMI
ROMI is not a perfect fix for social media but I believe it has a clear competitive advantage in today’s economic climate. ROMI takes the approach of looking at your total marketing spend and gaging it’s effectiveness as a whole.

As marketers are looking for ways to stretch their budgets further social media poses a great value propositions. We all know that social media can be much more cost effective than traditional methods but how do you prove it.

Here are some recommended scenarios:

  • Instead of paying wire fees for every press release your company does send your release to targeted bloggers in your industry (first be aware of how to pitch bloggers). You can also use new tools like PitchEngine to distribute your release.
    • You save on wire fees and possibly agency hourly fees.
  • Instead of building a microsite for your next event, build a Facebook page with an accompanying Twitter account . It’s free and easy.
    • You save considerable development costs for building a Web page.
  • Instead of doing traditional display advertising look at less expensive advertising on social networks or through self service blog ad networks.
    • You save on expensive creative development and over priced media buys.

In many cases your traditional ROI measurements might not yield the same results. You’d be hard pressed to get the same CPM numbers. But when you look at the total marketing expense you can see huge savings. Now I’m not saying you need to cut everything you’ve been doing but as budgets get cut you can supplement your marketing dollars with non-traditional cost-saving efforts that are sure to win over your manager.

These are only a few examples, I’m sure you have others. What are you doing to stretch your marketing dollars? Do you have any suggestions I haven’t listed?

Image by Tac Anderson via Flickr

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What’s your DBQ?

The Douche Bag Quotient.

A while back I first started to hear my friends Justin Foster , John Hardesty (John created the logo) and Sam Swenson using DBQ as a term for those people you know who are real douche bags but don’t realize they are douche bags.

Douche bags seem to gravitate towards social media. It’s probably because of the opportunity for shameless self-aggrandizing. Kommon Kraft even has a great video explanation of the New Media Douchebag.

The other day I was thinking about what is it that causes someone to be a douche bag? The thought came to me while trying to manage my ever growing Twitter account. At times it can be seem overwhelming to even follow just 1200 1300+ people (which is nothing compared to the Twitterati). So I started thinking about being a little more picky as to who I’d follow.

And right then it struck me: who was I to judge who’s worth following and who isn’t? (By the way I am not implying that if you have filters set up for who you follow on Twitter to manage your time that this in and of itself makes you a douche bag. I just personally don’t feel comfortable saying someone isn’t worth my time.)

I look at people like Chris Brogan who follows everyone (real person that is) that follows him, Robert Scoble who has had his cell number on his blog from the very beginning (and BTW set the trend for Twitter following) and Gary Vanerchuk who in his energetic Keynote at Web 2.0 talks about how he personally responds to every email.

People have to filter their time and their accessibility. Even if it’s just a matter of prioritizing who get’s your time first and who get’s that spot one month out.

But this becomes a dangerous path, especially if you start to gain any type of popularity. This leads to feelings of superiority. This leads to judging others based on things like if they use blogger instead of self hosting their own blog.

This leads to being a douche bag. And people who start off a regular person are the worst candidates for DBQ, because they don’t realize that their filtering and judging has turned them into a douche bag.

What do you think turns normal people into douche bags? Is everyone at risk of developing DBQ?

BTW it’s important to note here that people who *know* how big of a douche bag they are actually end up with 0 net DBQ.

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Entrepreneurs! Start Your Engines!

Mad Max 2: The Road Warrior

At the end of the worst financial week the World has ever seen, bankers and stockbrokers may be ready to jump out windows, but I’m feeling rather optimistic today.

Barring a complete meltdown of society (some may argue we are already witnessing that) the coming months are going to be a great time to start a business.

If you already have your own business, Brad Feld has two amazing posts that demonstrate why he’s been a successful entrepreneur, Angel investor and VC: Fear is the Mind Killer and OK Entrepreneurs, Time to Step Up.

Starting a Real Business

When I say start a business, I mean a real business. Something with a revenue plan. Something that scales as the revenue comes in. Something that is built on the premise of what VC’s are telling their portfolio companies (Sequoia Benchmark); aka have a low burn rate and be profitable.

I think companies that start in 2009 will be better off than companies that started in 2008, for one simple reason: The rules changed. Companies starting from scratch will have leaner business models than those that started over the last year.

The last 5 years have been a lot of fun, we’ve got to play with all kinds of cool new products….and now we’re done. Done playing that is. This doesn’t mean an end to Web 2.0, it just means that Web 2.0 has to grow up and look for different business models to add value to.

If you are one of the unfortunate people being laid off from work, I really feel for you and your family. While there may not seem like any upside remember that there is safety in numbers (or misery loves company, that one works too). Grab a few of your most talented colleagues, who also find themselves out of work, and make the leap together.

Entrepreneurs are the only ones that can fix this mess

Entrepreneurs are great at creating something out of nothing. Let’s face it, the more the government gets involved the more they screw it up. The banks (I don’t even need to go there). No one has any answers. Everyone is paralyzed with fear or uncertainty. And while it may be hard to find any capital for your start-up the good news is that everything just got a lot cheaper.

Have you had a great idea but couldn’t find any local programmers willing to give you a break on price? Looking for a good business partner with enterprise experience? I bet all that just got easier.

There are no quick fixes to this mess. My *best case* scenario is that we’ve got 7 long, hard years ahead of us. Entrepreneurialism is tough, so if the next several years are going to suck anyway you might as well face it with both hands on the steering wheel ;)

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Random Thoughts 10/09/2008

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Random Thoughts 10/07/2008

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