The Lameness of ROI

Return on Investment: the new mantra of ad agencies and marketing managers. For anyone who sells advertising, it’s our latest bugaboo. No one questions that we need to better understand how wisely we spend our advertising dollars, but it’s just that the latest mania, is, well . . . mania.

The risk to this mania is that the growing demand for ROI could backfire on agencies and ROI-seekers because they fail to deliver the “evidence” to their bosses and clients.

Return on investment originally took root from the progenitors of direct response, gambling, and investing. Easy quid pro quo. You put your money down and then watch it either disappear or compound. Easily measured.

When it comes to advertising, reading ROI becomes more complex, unless one tries to move an inventory of sweaters with heavy discounts in a limited period. The focus on ROI—and nothing but ROI—ignores the fact that response from advertising can exist, but the gratification comes later. Half of the value proposition advertising offers builds a memory that will stick with consumers, in anticipation of that moment when they are ready to purchase. Although it’s out of vogue right now, building brand and creating top-of-mind awareness among prospective buyers of products is still the best way to “move the merch.”

Frankly, the Web created this monster. Marketers who have used the Web for any period of time know that online response rates are, on average, one-half percent to 1 percent. Direct mail, the closest thing to a tried-and-tested science in consumer response, has yielded 1 to 3 percent returns for the past half-century. Yet response expectations continue to be both unrealistically high and wrongly applied to all forms of advertising.

This mentality is eroding confidence in proven and tested advertising methods. CEO’s who demand immediate results from their marketing expenditures need to understand that relationship building is still central to selling their product. It takes time, as well as savvy media selection, great creative, and clever messaging.

Experts Make a Comeback

One of our editors came in the other day, iPhone in anxious hand. He needed to show me an app that allows one to check concerts in most cities in the country. He wondered when we were going to create such an app that would do something similar.

When when when??

His chemistry suggested the world was passing us by. I could smell the desperation. We’d better get going before we tumbled into the horrid crevasse of technological irrelevance.

Frankly, as a company, we’re way ahead of the tech curve. We keep up with what’s new because we live and breathe being connected with information-hungry people. We’d be idiots not to try everything first, learn our lessons, and move on to the next tech thing (of which there is a ridiculous and never ending stream).

So, as I’m discussing the concert app with my editor, I posited that just about anyone can create an app that lists all the concert or music action in any given city. We don’t do that. We’re a filter. We do the homework, find the good stuff, tell people what we think is going to be good, and then review it after the fact to further share our insights and opinions. That’s what we do. Our business is built around being the people in the know. Our mission: provide “in-the-know” service to consumers seeking good information.

To which he said, “Yeah, but peer review has overtaken expert opinion”………

“Oh, has it?????” I responded. His setup was perfect. I licked my chops as I prepared to smash his logic like an overripe watermelon with a sledge hammer.

“Are you aware,” I said, “that research is indicating that peer-to-peer networks are only considered credible sources of information by 25 percent of people who use social media?”

I pounded mercilessly with the fact that credibility levels have actually dropped more than 50 percent in just two short years? Further, was he aware that television, radio, and newspaper information was considered twice as credible—and that THAT figure has doubled in the past two years?

Looks like consumers are learning the hard way.

It makes sense, my friends. Friends only know so much. They’re not experts, and their opinions vary depending on their level of familiarity and expertise with a product. We all have pals who know their stuff about one thing or another, but most are best left to have a good yuk with.

Leave the product reviews, restaurant criticism, and music recommendations where they belong.

With the pros.

Things That Matter, Things That Don’t

After the halftime “show” at the Super Bowl, a friend called, appalled. He was gagging on Pete Townshend’s exposed belly. I thought it was hilarious. Pete Townshend could care less what he looks like. Indeed, he commented after the show, “We’re too far gone to care.”

Precisely. True to their rock and roll roots, Roger Daltrey, Pete Townshend, Robert Plant, Jimmy Page, Keith Richards, and rockers who are over someone else’s hill could care less what people think. For those who say “eeeew,” Townshend would likely tell them to go eat one—and rightly so.

The fact is that it just doesn’t matter.

What matters, exponentially more, is when a business partner of 32 years is ill. The intense emotions that well up are Really Intense and a little surprising. For people who have worked side by side, five days a week, 50 weeks a year for more than 32 years, for people who have built a business together, for people who have been on the front lines together, hiring and firing, dancing in the darts, laughing your asses off, shedding an occasional tear, proclaiming brotherhood, and annoying one another to anger . . . for those people . . . these relationships matter, a lot.

I think about this guy about every 30 seconds. I am stunned by how much it’s top of mind. Seeing one another every day, in every hallway and meeting, we take each other for granted. We don’t even have to talk half the time because we get things organically, as we make our daily bread. Unfortunately we lose the sense of appreciation for one another. and for what is owed. It’s a lesson.

These are things that do matter. This is what makes business special—these relationships. Be awed and inspired by them. Hang on to them because they slip away.

As far as Pete Townshend’s big ol’ pink belly goes? That’s the stuff of s***s and giggles.