Why ROI measurement for inbound marketing fails

ROI measurement fails to consider the shelf life of inbound marketing content

ROI measurement fails to consider the shelf life of inbound marketing content

Simple ROI measurement for inbound marketing fail to consider the shelf life of content

Here we are in the age of “Big Data” where everything can be tracked and scrutinized. For aviation marketers is means one more hurtle to jump when trying to justify investment of marketing funds for inbound marketing programs.

Traditional RIO measurement seems very simple – take the gain of the investment, subtract the cost of the investment, and divide the total by the cost of the investment.

ROI = (Gains-Cost)/Cost

This simple calculation comes up short in several areas:

  • How can you determine the value of a follower?
  • What’s the value of a blog response?
  • Is the content presented in such a way that it has an evergreen shelf life?

The value of a follower

What is a follower of your inbound marketing worth? Monetizing the value of a follower is subjective because we get into grey areas of determining worth. Does the content present the social face of the corporation? If so what is the value of good will towards the corporation? Does the follower reference the content in their social media network? If so, how do you calculate the value of reach from linked content?

Content shelf life

I like to think of inbound marketing content- blogs, white papers, e-books, videos and infographics as a conduit that provides a way to gain insight into the brand.  Produced correctly the content can influence purchasing behavior and have a very long shelf life.  This also throws a wrench in the traditional ROI measurement because the cost of producing the content needs to be measured over the time that the content remains relevant. For example, a video is produced about a new avionics component. The marketing expense to produce the video was $10,000. The video is placed on the corporate website and syndicated on various video sharing sites.  First year sales for the new component were $100,000 with gross profit of $40,000.

Traditional ROI measurement would look like this.

ROI = ($40,000 – $10,000)/$10,000 = 300% ROI

Now consider year two of the video investment with component gross profit of $30,000 and a marketing expense of $1,500 for website maintenance and syndication cost.

ROI =($30,000 – $1,500)/$1,500 = 1900% ROI

Inbound marketing measurement – ROI or VOI (Value of Investment)

As the examples above show ROI measurement can be can be modified to suit the situation -it all depends on what you include as returns and costs. Granted this a very simplistic view of ROI and there are more robust financial models available. That said, I’d recommend that a more accurate measurement: VOI = (Value-Cost)/Time

Another way to look at value of investment would be not to invest at all

This is another approach to determine the value of content. The internet is a crowed place with brands fighting for the attention of an over caffeinated, 140-character challenged audience. Their purchasing decision is neither entirely rational nor based on the lowest price. It can be influenced by website functionality, peer reviews, blogs, leadership papers and content that helps them select the product that is best suited to their need. If the brand is not active in this environment then it virtually invites the competition to gain the share-of-voice and increased exposure.

Additional Articles on this topic you may find of interest.

Big data and creativity

Big brother and marketing ROI

Why content development will drive the future of aviation marketing

Measuring Digital Display Advertising ROI

Please leave your comments or thoughts below.

Aviation Marketing: Using social media to gain customer insight

Blog_81_Using social media to gain customer insight

Good social monitoring brings about actionable engagement strategies

Social media offers an unadulterated view of issues and opinions that shape brand preference

When developing strategic communication plans for companies in the aviation industry, I always want to know what’s going on in the customer’s mind. Customer insight can be attained via several channels using different tactics. For example, insights can be gained from:

  • Focus groups
  • Questionnaires
  • Surveys
  • One-on-one interviews
  • Social listening

Several of the above-mentioned tactics have been the staple for customer research for many years with documented pros and cons associated with each tactic.

Social listening is a relatively new tactic that relies on monitoring social media channels. Mining the channels brings forth an abundance of customers’ opinions and conversations about your brand and information about competitors.

Good social monitoring brings about actionable engagement strategies

Social monitoring goes beyond Facebook “likes” or Twitter “followers.”  It provides an interpretation of the online conversation and how it relates to the purchase intent of customers interested in your brand. Think of it as an early warning system about product functionality, advertising messaging, and emotional connection which provides the ability to course correct marketing strategies before experiencing a decline in sales.

Forrester Research estimates that $1.6 billion will be spent this year on social brand tracking. For that investment, savvy airlines and aviation manufacturers will have a front row seat for ascertaining the tone of the conversation, what the interest levels are for  their brand, and what brand perceptions are being formed in the customer’s mind.

What social monitoring brings to the table

Customer Insight – helps aviation companies ascertain purchasing intent, triggers for purchasing behavior, and specific communities in which to focus resources.

Brand Insight – aligns Key Performance Indexes (KPI) to understand how awareness, perception, and brand consideration are formed.

Category Insight – helps companies determine how to capitalize on opportunities in specific business segments.

Social listening platforms

It takes two to have a conversation.  Blogs, websites, Facebook pages, Pinterest boards, and tweets invite customers to express themselves to you and to each other. These are global conversations about brand loyalty, customer frustrations, and service shortcomings that can identify areas for improvement.

Making sense of the conversations

Depending on the size of the company and resources available, social monitoring can be very simple or highly structured.  There are several online providers that can supply you with platforms and dashboards incorporating a host of tools to acquire and categorize the conversations, bringing statistical significance to the information for actionable implementation.

Social media monitoring tools (paid):

A comparision of the above tools can be downloaded at pr2020.com

Additional articles that may be on interest on this topic:

Finding the sweet spot for social marketing

How to engineer a social marketing strategy

10 reasons why social marketing efforts fail

 3 ways social media can help build your brand

photo credit: afagen via photopin cc