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Congrats, man! Well done. It's been awesome watching your career arc for the last decade. :)
It occurs to me that the funnel may indeed still be perfectly fine (and valid) but that it is the role of Advertising that has been diminished - in regards to influence, that is. Awareness > Consideration > Preference > Action > Loyalty is still how most people purchase products and services - whether the purchase is logical, emotional, or a combination of both. However, the means by which individuals come about the awareness and preference (even the action) has migrated to an increasingly fragmented ecosystem: Where 30 years ago, advertising would have created awareness and preference, the reality of 2010 is very different - Awareness could come from product placement in a TV show, movie or music video. It could be the result of a direct or indirect recommendation via a product review website, online social network or analog social network. It could turn up at the top of a category search via Google or Bing. So... Fragmentation, yes. Advertising is just one of many anchors tethered to the funnel. But to say that the funnel itself is dead, I'm not sure I can agree. Good article nonetheless. :)
I can't seem to be able to play your rant, so I have no idea what your argument is (yet). Based on the comments so far though, I have to throw in a word of caution: An R.O.I. calculator in this instance WILL NOT WORK. It just doesn't work that way. That said, R.O.I. can be calculated for ANY and EVERY business activity. Is it sometimes difficult? Yes. Does it sometimes take a lot of tedious work? Yes. But it can be done. More importantly, it should be done. Whether a manager has to justify a portion of her budget to herself or her boss, being able to make sound investments within the organization requires serious P&L management. The question is ALWAYS: How is the best way for me to invest my budget dollars? Always. If I think I can increase net new customers by X% or buy rates by Y%, and the values of X and Y are greater than what I have been trending at doing the same thing for the last 8 quarters, then I need to try. That means setting specific targets, which in turn means creating a sound measurement methodology, the basis of which will be $$$. Dollars invested and dollars earned. Dollars earned can be in the form of cost savings (reducing head count and speeding up processes by incorporating SM into customer support, for example) or in the form of increased revenue. Simple ways or increasing revenue are to acquire net new transacting customers, increasing buy rates (frequency of transactions) or the average $ amount per transaction (yield). These things are measurable. They are finite. Intermediate metrics connect the dots between the investment > the tactic > the public's reaction > the public's action(s) > and finally the transactions. It's hard work, yes, but it isn't brain surgery. And with all due respect, ranting against the importance of R.O.I. to any business decision is about as productive as ranting about the importance of falling rain to an ecosystem. If you cannot convert engagement, conversations, community activity and shifts in sentiment into net transactions, you've just invested your entire marketing budget (social media included) into nothing more than a whole lot of noise. Period. It might look good to show your bosses all the cool "engagement" metrics you've generated, but in the end, if you cannot tie that intermediate activity to a financial outcome, you've accomplished nothing. The R.O.I. question is vital to ensuring that marketing activities impact the bottom-line. It's that simple. You can rant all you want, but the reality of business management is that if something doesn't improve that bottom-line, it'll get cut faster than you can say "economic recovery."
Toggle Commented Jan 8, 2010 on Epic ROI rant at Web Ink Now
Thanks for the mention! I've been a fan for a while, so this is a lot like an early Christmas present! :)
Toggle Commented Dec 14, 2009 on voice of the brand at Tom Fishburne: Marketoonist
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Dec 13, 2009