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Google Finally Publishes a Mathematical Equation for ROI

​Love the fact that Google put together a value equation that allows its customers to use predictive analysis and GAAP accounting principles to demonstrate ROI for online marketing. Finally! It just makes sense to document and demonstrate the marketing ROI for continued investments.

​We should also note – of course Google would put together the resources to consolidate a methodology that determines the negative effects on your online traffic when online advertising is paused and traffic to your website is solely dependent on your organic rankings.

Click here to view Google’s study.

​Those of us wielding the precious marketing budgets of private companies for a career know that nothing that comes easy or cheap is repeatable or sustainable for long.

​But, these opportunities do arise. Just like insider information in the stock market. And when they do the windows are closed within weeks or months due to human nature. If it is easy and cheap everyone will do it. And if everyone does it, then it becomes commoditizing in the eyes of marketing prospects when we are talking about brand, service or product marketing. And there are many companies that have found themselves chasing fleeting opportunities.

​This phenomenon reminds me of a very simple, but profound, quote from a Stephen Covey, “The main thing is to keep the main thing the main thing.” And what is the main thing in marketing? Wait for it… ROI?

​This is the question that must be answered every single day, week and month around the marketing table. How much did I invest to get back how much? It is that simple. The new tools and the new methodology to answer this question in real time exist. The best practices are being re-proven every day. Leaders have been deploying the new methodology for 5 years and running.

​The complex part comes into play when we get into the variables for the “how.” In a sea of consumer alternatives for marketing prospects people must make a decision to go with one company over another. This decision, when it comes to the wheels of commerce, cannot come down to a chance pick by a consumer. The most efficient way to NOT leave your marketing ROI to the whims of chance is to create differentiation from the sea of competitors in a way that influences prospects to choose your brand, product or service over the others.

​Therefore, going full circle in this discussion, we can see why the easy, cheap solutions leave a marketer to chance. And even if a vein is hit by chance, the window closes so quick due to commoditization. All of a sudden marketing activity success emulates a stockbroker trying to predict the ups and downs of the stock market.

​In the world of marketing with squishy or no meaningful ROI numbers, one good marketing investment provides a cover fog for years of consecutive and incremental loses. After decades of managing the precious marketing assets of our clients, we know this is no way to pilot a company’s future, nor sleep at night.

​All of us in the marketing industry must strive to provide ROI on each piece of the marketing funnel, its independent tactical ROI and its aggregate marketing ROI. Only when each piece of an integrated funnel is measured in real time and reported on in aggregated dashboards can we even begin to think in these terms.

​Then we must go to work as marketers. We must do what has been trusted to us. We must supply to the leadership of our organizations the REAL metrics, meaningful metrics that are not just counting the chickens once they left the coop. We as professional marketers must harness all of these new and emerging communications technologies to help us corral the prospective ROI of each and every dollar invested into our marketing strategies.

​Nice work Google. Keep it up. It’s another piece of the puzzle our customers need and it’s nice to see a company like Google helping those of us on the front lines everyday deliver the ROI research and metrics for online marketing and advertising. The industry needs more hard science like this and less hot air!

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Online Marketing