Tweak Your Biz » Growth » ROI Is Dead – Vive Le Roi!

ROI Is Dead – Vive Le Roi!



“We have a great offering. We know what we’re doing. We’ll blow them away! Now, how do we promise—and then demonstrate—a fantastic return on investment?” There followed a pregnant pause. I felt it echoing throughout the digital agency/social consultancy universe. No-one seems to have figured this one out yet.

The uncomfortable vacuum was quickly filled as someone launched into an enthusiastic explanation replete with convincingly well-informed, up-to-the-minute expertise, peppered with disclaimers. Do we mention the disclaimers? I suppose we have to, but we’ll play them down. Will our competitors mention them? The meeting presses on with apparent confidence and unspoken doubts. Talk it up.

When scrutinized, many arguments justifying ROI specifically delivered by social media are dead in the water. But it’s The Big One for businesses that are encouraged and cajoled to sink valuable time and/or money (usually both) into a digital tsunami they know is coming because their familiar shoreline has just been sucked out beyond their vision. Some are bewildered, some resistant, some enthusiastic to act but, whatever their feelings, this unfamiliar landscape has them at a disadvantage.

They need to fight back—re-establish control, keep their business as it was but with a few shiny additional social tools to appease the progressives in their company and give them a foothold in the new world. So they use the only weapon they know will work, and the one that they’ll have to answer for at the end of the day. Show me the ROI.

For the client, ROI is king. But is it, really?

Things were simpler in the not-so-olden days. I don’t remember such an aggressive focus on the justification of ROI in years gone by, when we all used more expensive, less accurate and less effective media. Of course, it’s always been important, but is this modern obsession with it more a reflection of intense, complex business pressures that extend far beyond the Internet? Or is it merely driven by a lack of understanding and reluctance to engage with social media?

It seems ironic, in an environment of instant, worldwide communication, that confusion over the media that carry it is so pervasive. We continue to misunderstand each other, which inevitably leads to mistrust not only of each others’ intentions and capabilities but also the tools and techniques on offer.

And I can see why. It’s all moving too fast for anyone to properly absorb, digest or understand. We’re not designed to go from caveman to spaceman in one giant generational leap. We humans need a period of osmosis for a new language to become a natural part of us. As a businessman, I would find it hard to agree to an urgently professed justification of company spending, if it was presented to me in, for instance, Swahili – even if I’d done the complete Linguaphone course.

There’s a break point that’s been identified. Anyone born after 1991 is a ‘digital native’ and is completely at home with the online world. They’ve never known anything else. The trouble is they don’t have the long-term, practical experience or carry the scars of years in business. Anyone born before 1991 has to learn this stuff. And you know what they say about old dogs; well, they’re the ones running the companies.

Adding to the confusion is the plethora of opinions expressed by so-called industry experts—opinions that lurch around like rudderless ships in a storm. And those who are whipping up the storm are so obsessed with manipulation and domination that information deemed to be accurate one day can be turned on its head the next. It’s even said that we are heading towards experiencing a ‘web of one’, whereby search information is so ‘personalized’ that everyone’s search results are constructed through the tunnel vision of machine-generated algorithmic ‘opinions’, delivering nothing but thinly-veiled commercially-pinpointed sales channels. One wonders where that leaves us in terms of true discovery, education and individual learning. Is it The Truman Show from here on in?

So, who’s king now? Well, actually, we are, but we’ve just forgotten this basic fact, in the blur of hyperactivity.

Perhaps we need to take back control, slow it down—decide what we really want from life and how the worldwide web can serve us, rather than constantly scrambling to serve it. It’s far too important to surrender it into the hands of powerful minority interests, be they commercial or political. In business, we maybe need to dig deeper, beneath the shiny, transient surface and focus on the real reasons why we have a business and what we want it to deliver, in human terms. The chances are that the Internet will have a role to play in that, but the true tangible benefits will only be found once the intangible qualities are fully understood. Fortunately, the durability of the human race is testament to the fact that we are superbly equipped to deal with those … when we choose to.

(pic: http://www.channelship.ie)

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The Author:

Lewis is an artist, author, entrepreneur, inventor, marketing communications consultant and business mentor. Fuelled by creativity and driven by a passion to provide innovation, impact and influence, his career has taken in a large variety of disciplines, skills and experience across many areas of industry and the public sector. He has worked with startups, SMEs, multinationals, rock stars, legends of film, the UN, people with AIDS and many more. All this has made him at times cynical, but more than ever confident that the future is bright if we can only empower ourselves and each of us employ our unique creativity to help achieve this. Through his service - www.CreativeCOGS.ca - Lewis offers a powerful four-step programme and a range of marketing communications services aimed at improvement, transformation, increased efficiency and profitability. He also runs creativity courses and courses in currency trading (www.leftbraintrading.com). His most recent venture (www.scribbleo.com) is concerned with making complex and long-winded information on websites fun and quick to understand and act upon. His first novel, Hominine - it's time to choose (http://www.hominine.info) is a powerful geopolitical thriller that fictionalized popular global concerns - and then provides answers! http://about.me/lewisevans777

Add Your Comment

  • Anonymous

    I enjoyed your post Lewis.Regarding “Perhaps we need to take back control, slow it downu2014decide what we really want from life and how the worldwide web can serve us, rather than constantly scrambling to serve it”. The web is amassing a never-ending momentum, especially for folks born before 1991 and because it’s simply impossible to stay on top of every “shiny thing”, it becomes easier to approach it as an afterthought and try to plug in stuff somehow. Those that can learn how to “slow it downu2014decide what we really want from life and how the worldwide webu00a0can serve us” will be ahead. It’s hard for me too but it’s the way to go.

  • Anonymous

    Thanks, Fred. I found it interesting that responses to this post weren’t as forthcoming as usual. Do you think I touched a raw nerve or something? It seems to me that among all the enthusiasm for SM, even many professionals are still not sure in themselves about the absolute benefits.

  • http://www.tweakyourbiz.com Niall Devitt

    Hi Lewis, I agree with you that social media ROI is bandied about, without any real discovery as to what it means. For me, I have tou00a0translate it into real terms: new clients, increaseu00a0in sales, increase in marketing or customer serviceu00a0efficiency etc etc. Only then, I can possibly start to think of ways to integrate and use social media. So yes while I agree that deciding what you want is a key, I also think that business in particular also need to be able to describe what they want and that’s where most areu00a0currently falling down in my opinion. Interesting stuff! :)

  • http://www.sustainablebusinessgrowth.biz Mike Ainsworth

    I liked this – very thought provoking indeed. If there are less comments than usual then I suspect it’s because you’ve touched quite a few raw nerves.nn”In business, we maybe need to dig deeper, beneath the shiny, transient nsurface and focus on the real reasons why we have a business and what wen want it to deliver, in human terms.” – sums it up for me.

  • Anonymous

    Quite so, Niall. nThanks. Always good to get your take on these things.n:0)

  • http://www.cgonlinemarketing.com/ Christina Giliberti

    Hi Lewis, nnEnergetic, reflective and philosophical post indeed! I agree. We do need to slow down and take a step back. The internet is full of noise and its difficult to switch off from it – it sweeps you up and catapults you through in a sea of information, so quick, that if you blink, you’ll miss something exceptional. We need to apply modern media to core concepts. technology may change, but do people?

  • http://twitter.com/davidc_smith David C. Smith

    Hey Lewis, great article with several thought provoking points; ROI, budgets, decisions, focus, purpose.nnOne thought I don’t exactly agree with is relating past ROI analysis to present ROI analysis.u00a0 We can’t justify not doing something now by claiming we didn’t do something then. “I donu2019t remember such an aggressive focus on the justification of ROI in years gone by, …..”.u00a0u00a0 I guess my perspective is the opposite because ROI has always been a consideration and I am usually stunned by a guru (of one flavor or another) trying to convince me that investing (time, money, effort) into something/anything without considering a return makes perfect sense. nnThe point is that there needs to be a measure (ROI is simply an measure) in order to (a) make decisions between alternatives and (b) refine and improve.u00a0 ROI may be “dead” to some, but to others it’s alive and doing well.

  • Anonymous

    Hi David, and thanks for your observations. I’m actually with you all the way on what you are saying. ROI is very important, I suppose I am suggesting that the ways to measure it in terms of social media are still in there infancy and subject to lots of doubt and scrutiny. This change we are going through is huge, and the ground rules are still being developed. Hopefully, those gurus you talk about are a dying breed…

  • Anonymous

    That’s a big question. In essence, I think we are still stone-age. The difference that we have achieved is what we have learned. Now we are being challenged on how we learn. It’s the intangibles that are going to be most important as we move forward, I believe.

  • Facundo

    I would like to make an observation in terms of people generalising the need for ROI, which I think it is where Lewis is going with the feeling of not remembering such an aggressive focus (feeling I share):nnOne thing is focusing on analysing the ROI of specific actions (such as a campaign) and another is trying to attach ROI to the basic effort of “being” in social media as such. nn-The former, as you say Lewis, is evolving but probably is still in its infancy and we’ll get to a stage where we will measure specific actions better. n-The latter, however, I am not sure if it should be pursued as such, since we are talking about communications tools in general. It is a new phone, a way to communicate and there is no ROI in that, when it becomes a must. Some industries can get away with avoiding social media, which I can understand, but if your audience adopt the tools, you must be there in order to communicate, and that is a basic step with no ROI whatsoever. It’s merely catching up with what is going on and your competitors. It is like confusing the probably inexistent ROI of merely having a phone & training your staff on adequate phone etiquette with the ROI of a cold-calling campaign which is a measurable endeavour run on a platform called telephone. n

  • Anonymous

    Thanks, Facundo, for your insightful comments. I think you hit the nail on the head about the nature of the new communication tools not, in themselves, having an ROI attached to them.

  • http://www.smartsolutions.ie/blog/ Elaine Rogers

    Hi Lewis, great post.n “…tunnel vision of machine-generated algorithmic u2018opinionsu2019, delivering nnothing but thinly-veiled commercially-pinpointed sales channels.” This was a fear I had about the future of the web, and because, as you say, things are moving so fast, we seem to have stepped back and allowed the internet define our usage, as in how we use the web, and how we access/receive information.nThe bandwidth alone says it all – for example, one service in Irelandu00a0 “8MB download, 512B upload”nnWe must remember that it will all eventually settle down, we as humans always get excited about change and development, so after a while we will be wondering what all the fuss is about.nnIn terms of ROI, perhaps the term we should be using for the new internet (SM and SN) is ROE – “Return on effort” as a ROI is so hard to establish, and as Facundo mentions below there are other reasons to be online, such as learning more about your industry or the competition etc.nngreat thought provoking post – better to be a thought provoker than merely a thought leader :)

  • http://twitter.com/ThomasODuffy Thomas O’Duffy

    Digital and social media has changed our culture, the way individuals and groups communicate, and the information they input prior to making decisions. u00a0nnPeople who struggle to quantify an ROI based upon specific digital / social actions need to recognise they are now marketing to “collective intelligence & awareness”; a large group of highly communicative folk who increasingly share wisdom with each other. u00a0 The difficult most people have in grasping such complexities makes it difficult to calculate ROI.nnIf you try to influence a group who is smarter than you, you’re most likely to succeed if you have their best interests at heart, and you’re highly aware of their needs, and you’re sincere in your communications, such that if you lead them (or their buying behaviour) and they follow, they look back gladly. u00a0In this regard, social media is most suited to making great products and services more visible.

  • John Twohig

    Hi Lewis, very thought provoking.nnROI is in danger of becoming a red herring, trotted out at every available moment and in every discussion even where it is not relevant. ROI and ROE( Return on effort) as mentioned by Elaine Rodgers are very important issues and from a business point of view, some would even say crucial.u00a0 nnThe key in discussions with your clients is to establish what it is they would see as the desirable result from your engagement with them, then as the “expert” it is your job to explain what can and cannot be achieved. The bottom line is you have to provide value for their investment as if you fail to do so, you are out and will not be engaged by that organisation again and rightly so.nnWe all now know the amount of “Likes” or “Follow” are of no value if your your client company isn’t engaging with them, if that community is not being utilisied and leveraged in a positive progressive manner. Social computing allows these communities to become advocates and super customers for your clients service or product, this is the real ROI and ROE. As a consultant company this has to be your goal.

  • Anonymous

    Thanks Elaine. Some very interesting points you make here. I’m not sure I have the faith you have in it settling down though. We’ll see, I guess…

  • Anonymous

    Thank you, John. Some good, solid sense there!n:0)