DEER VALLEY, UT: Not everything that marketers do needs to be measured in terms of an immediate financial return, an executive from Walgreens has said.
Adam Kmiec, who leads mobile, social, content and performance marketing at the drugstore chain, described ROI as being like a "prison cell" for many marketers.
Speaking at a Digiday event, he remarked that "the general perception of return on investment means financial return."
He went on to argue that this is a narrow view of what constitutes a return. "ROI can be so many different things – the download of an app, the leaving of a review, getting someone to provide feedback.
"All those different things have to be taken into account," Kmiec said, suggesting that ROI is rather more complex than a simple formula of "spending x and receiving y".
So, for example, it is not enough to just look at the media costs involved in getting a piece of content in front of a consumer in order to generate an action – a truer picture would include the costs of creating the content and the cost of routing fees is using a DSP.
That was exactly the case for a colleague, he said, who was "generating an exponential return" because certain costs hadn't been included.
"So sure, that one piece of video generated 1,000 clicks with $10 return on each one," said Kmiec. "Now add in the cost of content, and all of a sudden that goes negative."
A recent study by the World Federation of Advertisers, found that of marketers felt only somewhat confident", and 27% "not very confident", in their ability to identify return on investment via data analysis.
And in Warc's Toolkit 2016, Karl Weaver, CEO of analytics company Data2Decisions, suggested that the ROI focus is too narrow, "with too much emphasis placed on measuring the ROI of individual channels, rather than the entire marketing mix".
Data sourced from Digiday; additional content by Warc staff