Measuring ROI Still Misunderstood - That's the Work of Analysis, not Metrics | ClickInsight Blog

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29 April 2009

Measuring ROI Still Misunderstood - That's the Work of Analysis, not Metrics

Proper use of metrics is still misunderstood. Marketers need analysis not metrics to assess marketing ROI (return on investment).

Analysis is Metrics+Context+Conclusions+Recommendations.

More education is needed to explain the difference between metrics and analysis. So many opportunities are lost while people sit back waiting for metrics to speak.

eMarketer's article Marketers Need Metrics to Integrate Traditional and Digital Media" demonstrates this gap in marketers' understanding very clearly. Take this sentence about what marketers need:

"Several obstacles prevent further adoption of digital media. The largest hurdle to overcome, according to the ANA study, is the need for metrics to properly allocate the mix between traditional and digital media."
Marketers surveyed appear to expect "metrics" (i.e. data from tools) to properly allocate the mix between traditional and digital media!

Given this expectation, they will forever be disappointed.

No tool will ever do this satisfactorily 100% of the time on a fully automated basis.
[Have you ever had strange reading recommendations from Amazon?]

People ... thinking people, analytical people ... will have to analyze metrics, segment and analyze further, reconcile discrepanies, resolve confusion.
People will come to conclusions and recommend mix allocation.
People will implement.
People will assess the outcome.

And because in the real world, implementation never goes exactly as planned, the data will be dirty, the metrics will be confusing and People will have to clean it up and make sense of it all.

An obstacle in the increasing use of digital media is "a lack of understanding of digital media on the part of senior management". Given the expectation that metrics should tell the story, this is probably because metrics are presented raw, without analysis not integrated with a marketing story. Senior management sees 'data' when what they want is 'insight' and a cohesive story about why investing in digital media makes sense and makes money.

eMarketer closes with this comment:
"Unfortunately, the necessary data is currently scattered across organizations. Data formats are inconsistent and so is terminology. Until these problems are solved, marketers attempting to integrate traditional and digital advertising channels will continue flying blind. "

Absolutely true that data is scattered, formats are inconsistent and so is terminology (see previous post on "unique visitors'). But this is no excuse for throwing up one's hands in dismay and accept "flying blind".

Those who wait until the "perfect tool" does their analysis for them will wait forever.

Those who do not wait and dive in and handle the problem will drive their competition out of business.

Do you want to be a winner?

Then don't sit back expecting your metrics to speak to you.
Get to work analyzing your metrics.

Love to hear your thoughts.

You are not alone. Looking for a great place to discuss these issues? Try eMetrics, a local Web Analytics Wednesday, or online at WAA webinars, and various measurement and analytics forums (see suggested list).

June Li


Emma said...

I couldn't agree more.

Analysis is a lost art - people focus on the metrics, reporting and dashboards but forget that without analysis there is no insight. It is the interpretation, and the ability to keep questioning, that provides learning (not reams of numbers).

June Li said...

Lost art is a good way of putting it. Perceived as old, known and therefore not relevant.

So, how do we help others 'get it'?

Perhaps 'marketing analytics' needs include more of the marketing of analytics. Maybe a future discussion topic at the CMA Tech Council or Data Mining Forum?

Thanks for commenting!

Dag said...


Good comments about the metrics vs analysis. I think that you are correct from a linguistic perspective, however in real life, I think most people use both words to mean the same within the context. I think the fight should not be over which word to use, but instead -- and I think this is the most important point -- where one should look for real information. And I agree with your (using your wording) that analyst should pour over the metrics, then make their analysis, which is then presented (as marketing analytics) to the decision makers who will make the decisions.

As a side note, which you might be interested in as you are discussion ROI. I pulled together an Social Media ROI calculator in spread sheet format. It is located at Check it out, as it helps a marketing company assign cost and values for benefit analysis. It is based on work by Charlene Li (Forrester) and Bill Johnston (Forum One).

Again, great post. Keep them coming.


June Li said...

I agree that words are just words and the context is important. Unfortunately, more often than not, the context is not specified.

Appreciate your mention of the Social Media ROI calculator on your blog. It is good that you have given context to the metrics you've included in the spreadsheet. Even if folks have trouble completing the spreadsheet, it is a very useful catalyst for discussion and thinking about the whole problem of measurement. Will be mentioning your posts on social media analytics and your calculator in a future post.

Thanks for reading, and sharing your thoughts.


[Original comment from early May deleted, likely due to my user error. Don't have the exact words but gist is same.]

Dag said...

June, thanks for your comment and also thanks for taking the time to read my blog entry. I am due for another post but... sigh.

I looked at your profile on LinkedIn. It is very impressive.


June Li said...

Dag, thanks for the compliment :)

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