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Return on Marketing Investment (ROMI) traditional vs. online marketing

October 20, 2011

Historically, measuring the return on investment for marketing (ROMI) has been difficult. It would often have been nearly impossible to determine the connection between an advertisement and its dollar value in terms of increasing sales. It is hard to tell if an increase in revenue is due to an ad campaign or other factors such as competition activity, market growth or other external forces. For example, if the CEO speaks at conference where financial writers have been invited to see the new product line and a party us held for the press, the ROMI would be hard to determine. However, if the Wall Street Journal does a piece on your product launch then it is likely that all of the money spent was worth it. Likely being worth it does not provide a solid dollar value though.

This video talks about traditional methods of figuring out ROMI. Phone surveys, customer satisfaction cards and online surveys, among other things, are all things a marketer must do after the fact. These techniques often have low response rates and can be costly depending on the relative size of the effort. Therefore, they are not highly accurate methods of finding out the ROMI.

With online marketing it is much easier to determine the return on investment in marketing activities. There are various analytic tools that can be used to to track a user on their pathway that begins on clicking on an ad. Google Analytics is a tool websites can use to receive rich insights into their website traffic and marketing effectiveness.  It is a free service that has several features that marketers will find most useful. These include providing an overall dashboard view that contains the most pertinent information, a flexible graphing tool to allow one to see larger trends and also the ability to see detailed reports on particular topics. There are also segmentation menus that allow for data to be analyzed in different ways depending on what the user wants. When used in conjunction with Google Adwords, consumers are an online marketing analytic experience that is free and will provide much more data  that traditional methods.


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