The ROI of Measuring ROI

Think of it this way If Marketing Mix Models are bought as a project the price tag could be upwards of 200000 and the scope of work defines how many models are produced Cost per model is known with the result being to focus on finding larger insights to justify the cost In other words aim that the ROI of measuring ROI is positiveArimaamp8217s selfdirected MMM showcases ROI and projected outcomesChange the procurement from a project to a subscription put it in the hands of the curious and the cost of measuring ROI can be driven down to nearly zero No predetermined scope of work and the curious will use it often If the cost is nearly zero then the threshold which makes the Return valuable also drops which dramatically expands the number of insights which can be applied to the marketing plans Cost per model down number of insights up yields a dramatic change in the ROI of measuring ROIThis is why Arima moved from a project price to a subscription model for Marketing Mix Models We wanted to create incentives for continually experimenting by pushing new hypotheses through MMM Some cloudbased MMM providers have stuck to the established projectbased business which expands their margin in the short term but doesnamp8217t allow them to participate in new developments that integrate MMM into the media planning workflowMarket mix models as a standalone solution provides ROI calculations on media investments Integrated solutions asked what does the marketer need to do with these numbers Theyamp8217re nice to look at however to deliver improved effectiveness certain actions need to be taken That happens in media planning and so MMM integrated with media planning tools are a natural fitArimaamp8217s MMM seamlessly integrates with the crossmedia planning toolSome marketers stick with a lowcost digital attribution approach to measuring ROI The assumption is any insight generated yields a high ROI on measuring ROI because the data and reporting from the digital platforms is free Whatamp8217s missing is whether the measurement of Return is correct or misleading Many brands using this approach find themselves overinvested in digital media all claiming excellent and proprietary outcome numbers while their business suffers In other words the cost of calculating ROI is extremely low but the insights are leading to enormous waste in the media budget essentially a negative ROI on measuring ROIMarketers aiming to improve what they get from measurement schemes the ROI of ROI need to focus on the business model in which the technologies are offered Too often the focus is on the math the methodology price or monstrous size of the analytics firm Marketers who focus on the number of insights generated and the ease of application will yield greater marketing resultsPosted at MediaVillage through the Thought Leadership selfpublishing platformClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillageorgMyersBizNet

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The ROI of Measuring ROI

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Chris Williams

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The ROI of Measuring ROI

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