Why Most ROI Models Are Wrong
People don’t like ads. Any measurement of advertising ROI that fails to take this into account is fundamentally flawed. This is because the cost of running a campaign is no longer just financial. Advertising — particularly bad advertising — is actually shrinking the overall marketing ecosystem.
Irritated consumers are walling themselves off in places where they cannot be reached. Every bad ad sends more of them behind the wall by showing contempt for their intelligence and making them regret having given up a few moments of their day to hear what a brand has to say.
A good ad, on the other hand, can build trust and nurture their willingness to grant us a finite and precious resource: A few fleeting moments of attention.
In this atmosphere, producing advertising that people actually like is a form of conservation.
The Attention Mines
Mining is a useful metaphor for our situation. Measuring ROI is like weighing the value of the silver you’re able to find against the cost of the effort required to extract it.
Doing this will give you a tidy number by which you can judge the profitability of your mine.
What this approach does not do, however, is take into account the harm you have done to the environment — the tons of toxic, contaminated earth left behind (known as tailings) that are a by-product of the process. There’s a cost associated with marketing’s tailings, and almost no current ROI models account for it, even though it shows signs of threatening a number of current business models. Examples abound:
• Ninety-two percent of DVR users skip all television ads, according to Forrester Research.
• According to eMarketer, 69.8 million Americans used an ad blocker in 2016. In 2017, that number will grow by 24 percent to 86.6 million people.
• PageFair reports that by the end of 2016, ad blockers were installed on more than 615 million devices worldwide. The number clearly will continue to spike.
• Pew Research Center’s Internet and American Life Project found 68 percent of Americans do not approve of their online behavior being tracked for advertising purposes.
• A study by InSkin Media and Rapp Media found that retargeting ads deter 55 percent of people from making a purchase while making only 10 percent of people more likely to buy.
Flattening Your Customers
Increasingly, the very act of plying our craft either provokes those we are trying to persuade or causes them to erect barriers against us. A clue as to why? When we plan a campaign, we stop using the word “people” and start talking about “consumers.” The difference is not trivial. It instigates the process of flattening-out human beings into two dimensions. A consumer is simply someone who buys things. And the shriveling of our humanity goes on from there.
Even as we call people “consumers,” far too often we begin treating them as something less — they become merely potential sales and, unsurprisingly, do not care for the style of communication that comes with the designation.
If you think I overstate the degree of humanity that has been drained from most advertising, I invite you to try the following experiment: Walk up to a stranger on the sidewalk and speak to them in the same way that a typical ad would — a mattress commercial, for example. One of four things will almost certainly happen:
- The person will narrow his eyes and ask why you are yelling at him;
- The person will avert his glance, begin to edge away from you and possibly even cross to the other side of the street;
- The person will fish his phone from his pocket and place a call to the authorities; or
- The person will punch you in the throat.