Measuring Marketing Through the Eyes of Finance
Marketers love to talk about accountability, measurability, performance, metrics, KPIs … the list goes on and on. They throw around things like reach and frequency, clickthroughs, open rate, impressions, etc. The old favorite "leads" has even evolved to include MQLs, SQLs and SALs to help define the sales funnel that's now a waterfall. Most, if not all, of these are lumped into that golden chalice of ROI. The problem is, all of these subject matters are about the "I": the investment. They can, for the most part, be bought and sold. But individually, they have no "R": no return.
It's because of this that marketers often feel so vulnerable and ill at ease when their counterparts in finance ask them, "What's the enterprise return on our marketing dollar?" If the answer isn't quick, credible and positive, the next question may well be, "What will happen if I don't spend that marketing dollar?" A logical, pragmatic finance guy knows a dollar in my hand today — even a marketing dollar — is better than nothing in my hand tomorrow, and if you can't tell me what I get for it, I'm keeping it, thank you.
By now, most marketers have learned that telling finance that they got impressions, clickthroughs, or, God forbid, likes, favorites and follows, isn't a conversation that ends well. The reason it doesn't end well is because, individually, none of those things are of any real importance to the business. Sure, they can be quantified the way you can quantify the number of rocks you can put in a bucket, but if you pay $1 for each rock and you can't justify why or whether you can get more than $1 for your rock, it doesn't make sense from a finance perspective. Worse than not making sense, it looks like a bad idea and, at the end of the day, you have a bunch of rocks you paid too much for because you can't define the value of them beyond the cost.