The Online Essays: Colin Gillespie, Neil Eatson

Colin Gillespie from All Response Media and Digit-All's Neil Eatson say the ROI phenomenon can do more harm than good and should have a government health warning.

ROI. Never has an acronym been so misused or bandied around as if it were the cure for all marketing ills.

ROI and online are so inseparable that to mention one without the other is deplorable, or so the gurus would have us believe.

They say the search for the answer to the age-old 50:50 question is over.

Not only do I know which half of my advertising is working, I can also tell you why.

But the truth is that the promise of this knowledge Utopia is causing more harm than good. And coming from a direct response agency, such conjecture is tantamount to treason. ROI should come with a government health warning.

Fundamentally, the issue lies with what the internet promised it would deliver. From a marketer's point of view, it was seemingly invented for the advent of ROI-only marketing and the perception hasn't moved on much.

The issue of cost and recognising value was not grasped with any real sense of responsibility in the early days. History will show that all major commercial media developments started with a rush of advertising, mostly at low rates as the media owner, client and agency tried to establish some cost and value benchmarks.

The job of the agency therefore leant towards getting best media value in cost terms while understanding the comparative media merits against other more established channels. All this was done where the natural status quo of supply and demand worked perfectly. Subsequent learnings would shape ratecards, reach, demographics and so on. Most importantly though, it was the agency that separated fact from fiction.

Not online, however. We would wager that no other medium prospers as generously from client direct sales. Neither does any other channel support a whole ancillary industry concerned with the measurement, tracking and optimisation of these campaigns. So already the vested interests are many without even considering the consumer proposition.

More worryingly, the science can get in the way of common sense too.

We accept that pure ROI is a simple concept. But we are perhaps guilty of not giving enough advice to clients on how best to achieve this, and that's before we spend any media budget. We understand that ROI measurement is relative, certainly between channels. But when you cannot get parity or clarity within a channel itself as far as having the data to make such calculations, then you have to tread carefully.

In the digital world not all ROI is the same. No VHS or DVD universality here as far as measurement is concerned. The Wild West was way too busy for that, fuelled by a voracious thirst to spend venture capital money.

The fact that there is a whole new lexicon of media terminology isn't the issue. The issue is that we don't believe the medium can afford to continue swimming against the wider accepted norms. Good old-fashioned reach and frequency against a demographic is still a useful measure.

Here we have a medium whose supply in terms of inventory far outstrips demand, and will continue to do so. Is there any wonder therefore that prices had to come down from their highs and will continue to do so, for a minority at least?

Why we were all prepared to pay cost-per-thousands (CPMs) far greater than that of established channels such as TV, radio, press and even inserts we'll never know. Especially as those CPMs fuelled the promotion of those sites that pitched prices high, so starting the so-called virtuous circle.

Blinded by the hedonism of the new opportunity and massive choice, we failed to realise that demand for these sites was driven by the industry, not the consumer. In many ways one can argue that the consumer, spurred by curiosity, was conned into becoming "quality traffic", and inadvertantly became part of the wider conspiracy.

Disconcertingly, I've read that it's possible to plan most schedules through the use of just ten websites. Think those of The Sun, the Daily Mail and The Daily Telegraph. That should cover all my targeting needs, shouldn't it? The words hammer, crack and nut spring to mind.

We must remember that the internet is a truly scientific invention that was jumped on, initially, by zealous venture capitalists - and it showed.

Technical integrity and innovation were placed on an equal level to content.

How can that be consistent with the ultimate push marketing platform?

Because of the ROI elixir and the science of tracking, reaching campaign objectives is simply a matter of placing ads, waiting for clickthroughs, then keeping an eye on sales or sign-ups. Or so the theory goes.

But how many agencies and clients truly understand the metrics of a mixed-media schedule? Is offline, for instance, the most appropriate channel for a campaign to deliver online ROI? For certain genres, absolutely. Sometimes offline proves the only way to truly get to know who your target market is, and how to reach them.

As for getting on- and offline worlds to work better together, econometric modelling is a very sensible way to begin understanding how media complement each other, as well as to get a firm handle on competitor activity. We reckon that, in its purest sense, this is the truer measure of ROI.

So, back to that health warning. All ROI is not good ROI. Particularly if you're after a quick, cheap and easy fix. You could damage your brand or degrade the quality of your prospects. Worse still, ROI could mean your campaign is deemed a failure for the wrong reasons. Online is a fantastic channel whose scope we haven't fully appreciated yet. However, talk of ROI as some sort of panacea needs to be addressed, and fast. Lowest common denominator marketing it isn't.

Colin Gillespie is a director of All Response Media and Neil Eatson is the head of digital at Digit-All, part of All Response Media.

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Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).