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
ClickInsight
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Eschew Simple Metrics. Gain Access to Bigger Budgets (and other Third Tuesday Learnings)

Data-driven analytics culture is alive and well at b5media blog network. That's one of the big reasons behind their success, and why they'll continue to be successful. Whether you're a content owner looking for revenue, an advertiser trying get more value, or a corporate web analyst, there were some good learnings from Jeremy Wright and b5media at Third Tuesday:

Jeremy Wright, President of b5media, was the guest of honour at tonight's Third Tuesday Toronto Meetup [In photo*, Jeffrey, left, with Michael O'Connor Clarke].

b5media VC Rick Segal of JLA Ventures was in the audience and also participated. Both Jeremy and Rick were very open and candid about the business model of b5media, its history and future plans (read other comments on meetup site or search Twitter for hashtag #ttt).

b5media publishes over 100 blogs & other consumer-generated content properties. Although b5media is working in a relatively new and emerging area, their analysis of the potential of building out new engaging products, their process for recruiting and managing bloggers, and their approach to building strategic, collaborative relationships with their advertisers are all grounded in solid business management. They try many things, expect to fail often, and learn from each adventure.

Revenue comes from advertising on blogs. They maximize revenue by maximizing value to advertisers. In areas related to leveraging data, these three were especially interesting:

• Behavioural Targeting: It was believed advertisers would like to maximize their exposure to certain niche target audiences. Behavioural targeting (BT) capability was 'cobbled together', but this proved to be too complicated for most advertisers.
  
  So although there's lots of talk about potential for BT, there's not much demand ("maybe 10 advertisers are ready for this"). Sounds like BT is sitting idle because it's too much, too soon.
  
  
• This is New. Keep it Simple: As this is a still a relatively new space, advertisers often don't know what to budget. b5media has data and experience to identify what's likely to be successful. So they typically suggest up to three alternative options to measure outcomes and value from advertising, that advertisers can try on for size.
  
  In discussing the options, sounds like their advertisers get a great education about how to derive value from blog advertising.
  


• Teach Advertisers Not to Buy Impressions: Too many prospective new advertisers still want to buy impressions. b5media has the data and takes the time to teach advertisers why buying impressions is not of value. They work with advertisers to identify outcomes of value, and work to deliver those outcomes.
  
  And if you're able to talk about "outcomes" instead of impressions, you're likely talking to Marketing and are now engaging more strategic thinkers. This likely means bigger budgets than what a media buyer typically has access to, and the potential for more if you can demonstrate value.

Even though Jeremy was sick with the flu, he fielded discussions for over an hour. Well supported by Rachel Segal, b5media Director, Content. Michael O'Connor Clarke moderated and roved the room well with his mike. Thank you to Joe Thornley for another excellent Third Tuesday.

Updates - Other reviews:

- Jon Arnold
- Guinevere Orvis
- Joe Thornley

* Photo above courtesy of Matthew Burpee (more event photos on flickr)

June Li
ClickInsight
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Speaking at Search Engine Strategies Toronto: Promo Code Available

Search Engine Strategies is returning to Toronto June 8-9. New this year is the Geek Track.

I'm honoured to be participating in the panel session "Analytics for Search: ROI, Engagement, Attribution, and More" on June 9, with Bryan Eisenberg from FutureNow, Richard Zwicky from Enquisite and Anne Marie Lorriman from Outrider. Really looking forward to it!

Since I'm a speaker, all readers of this blog can take advantage of an additional discount. To get your discount code, contact:

  Adam Boffoli at Incisive Media
    Phone: (212) 457-7931
    Email: Adam.Boffoli [at] incisivemedia.com

Early Bird Discount Registration ends this Friday, April 17, 2009. The promo code Adam gives you can be applied to the Early Bird.

June Li
ClickInsight

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