ROO vs ROI – Digital Marketing’s New Success Metric




  • May 5, 2016

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    Marketing is like the long holes on a golf course, digital marketing is no different. You can’t expect to get good quantifiable results in a short amount of time. Some people especially people who are not formally educated in marketing have this notion that you they can spend a little money and they should be able to see immediate results. On a par 5 hole it takes a couple whacks and some patience before you get to the green and the hole is in sight.


    To measure the success of a marketing campaign or strategy the common form of measurement has been through the calculation of return on investment (ROI). However; the age in which we currently live, ROI may not be the best form of measurement. Return on investment always correlates directly to a monetary value. You calculate ROI by taking the net profit and dividing by the cost of the effort. This equation gives you ROI. However; now it’s taking much longer for consumers to travel through a sales funnel. ROI also falls short if you are in an industry that requires follow up; like investment advisors.


    Return on objective (ROO) may be a better measurement especially for digital marketing. The return on objective is a far better scale on which to weigh your marketing efforts. In order to calculate this you must start by clearly defining your objective. The common objectives an investment advisor may have might be building brand awareness, establishing expertise, or the obvious one, getting leads. Once you determine the objective you can start tracking these results.


    If you are aiming to build brand awareness then the number of impressions and their frequency will determine if this objective is being met. This is where the times a customer had to see you or your ads before buying. This used to be around 7, now some experts are saying that number is between 25 and 50. Does this mean a customer will see your ads 30 times and just hand over their money for you to invest? No. You still need to nurture and sell those customers.


    So what if your objective is to get leads? Well then, once again you’ll be better off using ROO vs ROI. This is because ROI only focuses on the end monetary gain. You shouldn’t use that number to measure a marketing campaign if your sales skill is still the deciding factor. If 25 leads are generated through a digital campaign like social media and none were sold, you can’t just say they were cold leads and give up. Maybe it’s an issue with how you nurtured them or the way you approached the “sale”.


    The real purpose of this was to challenge you to look at marketing as what it is, just the first step in the sales process. If we keep using the same old same tactics or measurements for success with highly evolved and different channels of marketing, we will feel like we are spinning our wheels. So don’t give up, if you aren’t getting a ROI step back and look at the ROO instead.

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