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ROI-based measurement is the only sane way to measure the effectiveness of a marketing channel. But if ad companies are measured based on ROI, then they can be
by brandnewlow 10y ago
ROI-based measurement is the only sane way to measure the effectiveness of a marketing channel.
But if ad companies are measured based on ROI, then they can be easily compared against other channels. That's the last thing any ad company wants.
So to make a great deal of money as a marketing channel you need to invent a new metric, one that your company is very good at delivering on. Then you convince the market that metric is one they should care about.
It's no different from how SaaS companies regularly invent new "spaces" that enterprises need solutions for (marketing automation, lead scoring, video marketing etc) or even how real estate agents in major metro areas regularly rename neighborhoods and redraw area boundaries. If you can make the market, define a new reality that your customers have to step into, you increase the odds that your customers will measure success in a way that favors your strengths.
- nihonde 10y agoYou're 100% right. I will never understand why ad spend is as high as it is when the customer never proves ROI. It made sense when ads were cultural background noise, in magazines and other media that had no way of providing feedback on conversions, etc. But we've crossed the rubicon, and yet ad channels still suck at ROI for the perverse reasons that you correctly mention. At least some channels, like App Stores for example, offer something like end-to-end metrics for placements.