The ROI and Disappointment of Digital Marketing

For too long, I have listened to the rants of the new media world railing against the need to measure marketing investment. Or worse, suggesting that airy fairy notions  of return on insight or involvement that have no tie to the bottom line should predominate discussions over hard and fast measures.

Sure, at a party I might choose to hang out with this entertaining online posse, they're interesting, creative, intuitive, change contortionists -all qualities I like and the type of right brained custodians of the future promoted by Daniel Pink in a Whole New Mind (great book). A majority of them however don't have a clue how the other side lives and most enjoy not knowing.

Let's consider something - exactly 10% of senior financial executives believe marketers have a solid idea on what they're doing with their budgets and only 20% of them believe there is enough dialogue to make any improvement (Marketing Management Analytics). Since most CEOs are coming up through the finance and accountant ranks with little exposure to marketing, this spells TROUBLE.

No wonder the online world is stuck in a conundrum.

Currently, the media world spends about 7% of their media dollars on online media.  Not bad, although when you consider people spend a heck of a lot more than 7% of their discretionary media time on the Internet and the fact that it only took TV 12 years to become the 2nd most dominant medium (behind newspaper), 7% seems like a big disappointment so far.

With the world moving faster and faster (at least according to James Gleick), it's surprising that a commercialized internet with a similar period of time will likely miss a growth goal on par with TV's nascent rise in the 50s and 60s. And there isn't a really solid reason why it should fail to win the hearts of the senior marketing and media community.

The table is set - people, particularly the upcoming generation,  like spending time online more than TV. It's a lean forward medium- people self-select based on their preferences. It's so incredibly measurable and targetable. It has less production costs associated with it. It is wonderfully efficient. Heavy internet users are an attractive target with large amounts of discretionary income. And with the advent of blogs, wikis, video sharing and social networks, it allows people to engage, share and create in the medium of their choice and puts word of mouth on steroids. It truly is the uber medium.

So why is it stuck in single media digits still...I have three thoughts:

1) the traditional media buyers and planners have done a good job convincing their clients of the risks of investing in the web and the appeal of mass eyeballs - give them credit, this industrial media machine has shifted the focus to what's wrong with web slithering away from the foibles of the traditional mediums. Evidence? I was at a recent conference and  some senior marketing people agreed that traditional advertising was entirely more measurable than digital media. I hadn't heard a more mystifying statement in awhile...chalk one up to the traditional media ecosystem for creating good noise with its supporters. Thumbs down for the digital world for not having solid fact-based arguments to spit back in its defence.

2) reapplying the traditional ad model to digital is broken. People don't like banner ads and pops ups...in fact, they hate them and they can easily avoid them. Clickthroughs are perilously low on standard digital ad mediums. There is so much more potential in exploring rich media, media as applications, digital media sponsorship and brand micro communities, that the focus on renting transitory media real estate in digital,  similar to how you would conduct media placement in a traditional world, really does the medium a big disservice.

3) Perhaps worst of all, the new media world's constant harangue that digital media shouldn't be accountable and measured. Somehow, despite the marketeer's fiduciary duty to a company, they are asked by many of the digiterati to footstep around the need to measure the medium so precisely, even though the medium is so cleverly set up to do just that.

Sure, I empathize with the digital folk who understand that engagement, involvement, insight and advocacy has value vs. just plain traffic. I agree. So let's then find ways to measure it and quantify its value. It's time digital stop acting like the spoiled younger child of mass media and start asking for its place at the adult's table with good professional rigour.

Whether you agree with this view or not, the marketplace will not stop asking for measurement - CEOs will continue to look at marketing as the press machine with little real impact on company strategy. The marketer's functional colleagues will rise up against the coddled behaviour of their "trust me, it will work" marketing peers. And regrettably the digital media world, will continue to lag behind its great expectations as media's next big titan.