Today it was announced that Ford enjoyed its 10th straight quarterly profit. 

Here's what I love about that (from a marketing standpoint):

Back when the auto industry was getting absolutely destroyed by an economic meltdown and skyrocketing gas prices, North American auto manufacturers were clamouring for government bailout money to stay afloat. Ford said "No thank you. We're righting this ship on our own". And they did (obviously), by focusing on marketing. They shed superfluous and strategically misaligned products (some models, but also some brands including the atrocious Land Rover and Jaguar brands). They invested in advertising (with fairly high production values, I might add). They examined the wants and needs of their primary audience and designed products accordingly (the $16K, fuel-efficient Focus, as an example). From a marketing perspective, a pure focus on fundamentals and execution. 

All that being said, I still hate them.

I've done my share of Ford-bashing over the years and they still haven't fixed their fundamental issue: poor quality. They're just not telling anyone about it. Read any worthwhile product quality review source (Consumer Reports is my favourite), and you'll find that Fords, quite simply, break down all the time. To combat this, they are simply preying on the ignorance of the uninformed through deceitful and arguably unethical advertising. First, they state repeatedly in advertising that "quality is now equal with Honda and Toyota". Well, if you actually read the fine print in those ads (yep, I'm that guy!), you discover that they're referencing "initial quality survey results". Essentially, they ask new Ford owners if they are happy. Of course they are - they just bought it! They also ask new Honda and Toyota purchasers the same question and get the same answer, leading to their claim of "equal" quality ratings. That's not even scratching the surface of the overall product quality issue. Second, they've started claiming a fuel-efficiency advantage with ads featuring Ford owners (actors) proudly (and repeatedly) stating that they "haven't bought gas in over a month". Well, as any informed viewer/purchaser can understand: if you don't drive, you don't need gas! Even my 8 year-old son chastised them about that (I'm not even making that up)! Ford, don't insult us by trying to deceive us. I am sad for the uninformed, who presumably didn't see through the advertising trickery and went ahead with their purchase.  

You see why I am vexed so? I can't decide if I am impressed by their relentless focus on the fundamentals of marketing, or disgusted by their advertising deception and manipulation.  

YOUR TURN:

Thoughts? 

Blasphemy! How could I even suggest such a thing, right?

Hear me out.

I don't have a problem with fiscal responsibility. The problem is the math.

For years, business managers and marketers have been calculating Marketing ROI as a way to justify spending, staffing and other 'investments'. They've been creating metrics to measure such as calls to a dedicated phone number, coupon redemptions, new leads and more. Then, after comparing those metrics to the cost of the corresponding campaigns, they get a tidy ROI calculation that is used to evaluate marketing efforts and justify campaigns going forward. 

Enter social media. The emergence of social media as a mission-critical marketing tactic (and investment) has given ROI heightened importance. And rightly so. Business owners want to be able to justify spending more time and money on a new (supplemental) marketing discipline, marketers are better able to measure 'return' (since most response can at least be observed, in the form of Retweets, Likes, and so on), and managers that don't quite yet see the value or importance of social media for business can at least see that it has a positive ROI. 

So, we agree that the concept of validating effort and investment is worthwhile. My problem is assigning a mathematical calculation to marketing. It can't be measured. I should clarify: it's difficult if not impossible to measure response, let alone attribute that response to a specific, measurable investment. 

Let me use some examples to illustrate my thought process.  

Many marketers measure web traffic (and even online sales) against investment in email development for an email ROI calculation. Seems logical, right? Sure, but maybe some of those browsers / purchasers were more influenced by something like a friend's recommendation, and were merely inspired to buy by the email? That visit / purchase may not be directly attributable to the email alone. How is the investment in word-of-mouth, which happened much earlier, factored into the equation?

Another example: Many marketers measure Twitter Followers against the time invested in Twitter engagement for a Twitter ROI. Logical again. But there is also a correlation between the value of the content being tweeted and the number of Followers. How do you factor the genius of the person writing the tweets into the equation?  

Another example: How do you even measure the return of a billboard campaign?

There are many other examples of ROI calculations that are first of all based on metrics that are hard to measure, and second of all not necessarily directly attributable to the tactic being measured. In legal circles it's comparable to circumstantial evidence.

So what's my solution?

Don't get me wrong, you should continue to care about ROI, but stop trying to calculate it mathematically. Instead think of it this way: "To what extent will this marketing tactic help me reach my objectives?" That's your 'return'. That thought process allows you to assign a grade or rating to the tactics accordingly. For example, if one of your objectives is to better manage your brand reputation, social media helps you achieve that objective to a great extent. Then, assign a measure of 'investment' to that tactic. Keeping with social media as the example, the monetary investment is $0, but the investment of time is considerable. So in this case, the 'return' is great, and the investment is 'considerable'. That's about the best you can do. The challenge then becomes comparing that tactic (social media) against other tactics to determine where you will direct your (presumably limited) resources (time and/or money). Are there tactics that help you achieve your objective(s) to a greater extent, with a less considerable investment of time and/or money? If so, do that first.

All of this is designed to help you understand where you should dedicate resources.  That's the key to marketing management. There are lots of marketing tactics - all of them worthwhile.  But for those businesses that don't have unlimited resources, you need to be choosy. You need to, as best you can, determine which marketing tactics deserve your investment. That's where this new way of thinking comes in. 

Instead of ROI, I call it ETWTAOAITM:  Extent To Which the Tactic Achieves the Objectives Against the Investment in Time and/or Money.  The acronym sucks, I know.  Hopefully the concept helps you make better marketing decisions!

YOUR TURN:

Defend the ROI! Let me know why you still calculate an ROI for your marketing, other than because your boss makes you. 

I am a marketing advisor.  I spend most of my working hours helping businesses understand the marketing tools available to them and the relative cost (in terms of time and money) of each.  I also talk to them about prioritizing the best ideas ahead of the good ideas, because no one has unlimited resources.  

This one got my head shaking. 

I have, on many occasions, endorsed the creation of hard-copy, offline (gasp!) catalogues that capture the power of photography, paper finishes and tangibility.  It works.  Especially for companies that offer high-end products.

What I don't get is using 615 pages (oversized no less) to do so.  Granted, they sell a lot of products.  615 at least!  But here are the issues that cause some concern:

• Has it not long been established that this much tree-killing causes real corporate brand damage?
  
• Can the same outcomes not be achieved with, say, 200 pages?
  
• They are clearly pandering to the abundantly wealthy, which I am not.  Could they not do a better job of customer segmentation?  They sent me TWO of the same catalogues, 3 weeks apart.  Think of the savings in postage alone!
  

THE LESSON FOR BUSINESS:

• Catalogues work.  They can be an important component of you marketing mix.
  
• Shorter catalogues work better.  There is no harm done to your brand by creating a, say, 32 page catalogue that highlights the product categories and some featured items, then clearly points readers to a corresponding web page for more products.  You earn positive brand association by saving trees, and you gain valuable customer buying behaviour data by encouraging them to browse online.  Everyone wins.  
  

YOUR TURN:
Tell me what I'm missing?  The good people at Restoration Hardware are clearly doing most things right.  Why, in your opinion, is this part of their marketing strategy?