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The "R" in your "ROI"

Measuring your marketing spend effectively





We at Leapfrog, are big on effective marketing solutions and for years have been harping on measureable programs… after all if you can’t measure the effectiveness of a campaign or program, you might as well put your entire marketing budget on 21-black of a roulette wheel in Vegas. Wait… the roulette wheel is more effective, at least you will know when you win or lose.


So always being interested, as we are, on the thought leaders’ ideas regarding marketing investment returns, we have recently read an article in Forbes Magazine on the subject. The article stipulates that ROI cannot be used as a true measurement of marketing effectiveness as it is designed more for investment rather than expenditure, is not incremental with expense (i.e. – a $100,000 print ad campaign will not automatically yield 10X the return of a $10,000 campaign). The writer stipulates that a truer measurement is one of ROMI or Return on Marginal Investment, where the calculation of final return is based on final profit as opposed to a specific ratio of income vs. investment.


In our minds, there is a simpler way to measure. Yes, the end game - profit is the ultimate in measuring a business’s success, but with so many other variables, can one really trace the profit specific to marketing expense… never mind a specific seasonal product campaign, or a single ad? We think the key is defining the “R” in ROI. This can be the number of visitors to a tradeshow booth, the number of clicks on a web page, the number of forwards of an e-mail, etc… It could also be an incremental measurement, i.e. – improved satisfaction survey scores, or less calls into your service desk.


So, in summary… by all means measure that marketing program’s success, but before signing off on the expense, define your “R”! .

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