Don't Let ROI Mean Removal of Innovation

Heavy Focus on Measurement Can Lead to Meaningless Talk, Bad Work

Posted by Ahmad Islam on 11.01.07 @ 11:14 AM

Ahmad Islam

Disclaimer: No ROI was injured or otherwise adversely affected during the creation of or as a result of this piece. In fact, at commonground, we are champions of ROI; daily striving to understand, measure and attain ever higher returns.

Now ... let's just cut straight to our Carrie Bradshaw moment here. When did ROI stop meaning Return on Investment and start representing Removal Of Innovation? Or Imagination even?

Far too often ROI is simply thrown around as jargon to imply "We're smart" or "We get results" or to parrot a client.

We're the generation that has seen ROI concepts strengthened. But we're also the ones who have fueled the quantum jump in which ROI often disappears as an applied metric and reappears as a generalized way to say things as simple as "How much money will we make off that?" (which admittedly doesn't sound as smart).

Sure, it's a natural linguistic evolution -- theory to practice to slang. But in this case ROI slang has consequences when an agency not only takes up that casual talk of "delivering ROI" but also struggles to map its work to ROI instead of delivering big ideas that build brands AND deliver results.

The fact that ROI clearly works often can prove to be a setup for meaningless talk and misapplication.

ROI, while an extremely helpful concept, can prove unhealthy to creative thinking and big ideas if misconstrued as the "be all end all" of your marketing efforts. Ultimately we must deliver results, but the road most traveled is not the only means of accomplishing that objective.

In an era when the emergence of a compelling new (supposedly measurable) medium is a common, seemingly weekly occurrence, this temptation to sacrifice creativity for measurability is understandable. But as agencies we are paid to deliver innovation, strategy and creativity and to bring those to life in ways that make robust connections between people, ideas and brands. Without that stuff, there's not much ROI to measure.

The "big-idea grave yard" that exists on every agency's shared hard drive grows larger and larger as clients and agencies run from ideas that truly stretch the imagination in favor of landing safely on the ideas that are the easiest to measure.

So, the next time you find yourself deep in ROI jargon, do two things. First, dispatch the slang with a real question about what exactly you're trying to discover or measure. Secondly, GET BACK TO THE BIG IDEA. In this case, you can have the best of both worlds.

(A note to our sponsors ... commonground is a big proponent of ROI. We simply believe that new ways of approaching a client's business should not be sacrificed to ensure ROI is easily achieved and measured.)

11 Comments

By drichards | CHICAGO, IL November 1, 2007 12:44:32 pm:

Ahmad, spoken like a true apostle of the Leo Burnett system (I, too, come out of that system so I hear you loud and clear). Actually, what you say is the senior management mantra of most major agencies. It's increasingly 'short-circuited' however with the advent of the "2 years and out" client CMO reality. They are on a short lease to deliver very short-term metrics (the classic ROI jargon) and the "innovative" vs. "tried and true" battle is gallantly fought by many agencies, but the 'paycheck' logic oft times emerges as the winner.

But...keep the Faith

Don Richards
Executive Vice President
JobPlex, Inc. / a DHR International company
10 S. Riverside Plaza
Suite 2250
Chicago, IL 60606
312/627-9301 X3092
drichards@jobplex.com
www.jobplex.com

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By Tom Martin | NEW ORLEANS, LA November 2, 2007 09:40:10 am:

Ahmad,
Agree that ROI focus can stifle innovation but I'm not sure it is the ROI focus or just properly setting the metric. Take homerun hitters in baseball. Quite often their batting averages as well as strike out count is lower/higher than say the lead off batter who tends to be a pretty consistent "get on base" guy. If one is to judge these hitters by batting average or strike outs -- then ROI looks bad. If however, the ROI is runs or RBIs -- now we're talking differently.

I think the key to keeping innovation without sacrificing ROI is to make sure Clients and Agencies clearly agree at the onset of a program -- is this a big idea kind of opp or a safe "get on base" kind of opp and set metrics accordingly.

Tom Martin
www.helpmybrand.com

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By dickharrison05 | Knoxville, TN November 2, 2007 10:28:46 am:

An agency or an individual creative has one responsibility: to generate results for clients. ROI, or whatever other metric is esatblished to quantify success, IS the "be all and end all." Innovation, originality and big ideas are tools -- though not the only tools -- which can be used to achieve that success. A tried-and-true approach that generates predictable results is often the best way to accomplish a client's objectives. Innovation for its own sake is self-indulgent, irresponsible and unprofessional. By the way, I'm not an account guy. I'm a creative with Clios and a One Show pencil.

Dick Harrison
BrainPosse

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By commonground | CHICAGO, IL November 2, 2007 10:47:09 am:

Gentlemen.....Couldn't agree with you more that at the end of the day agencies are responsible for delivering results for their clients. The point is simply that you can achieve those goals with out sacrificing the creativity and innovation that feeds many of the powerful ideas that move consumers AND business.
Setting metrics in partnership with your client is a critical part of the initial development process and something we advocate with all clients. The goal is simply to create programs that are driven by what is right for the business on all levels as opposed to settling for the safe solution for safety's sake. Sameness often breeds complacency and disinterest on the part of many consumer segments and that's not healthy for ROI regardless of how you define it.

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By Vince | Stamford, CT November 2, 2007 11:22:08 am:

Mr. Harrison is correct: ROI/results IS the "be all end all". Creative that is brilliant artistically but not brilliant commercially does the client no good. There is culpability on both sides. Too often, agencies assume that artistic brilliance builds the brand, while clients assume that a short terms sales surge means the brand has been "built". Lost in all this is the simple question: what is it that needs to be measured in this pursuit of "ROI". If all one is measuring is near-term sales spikes, then it is hardly likely that advertising of ANY kind -- tried-and-true or off-the-wall -- is going to have such an effect...or at least not nearly as strong an effect as taking all that creative and media money and putting it into below-the-line sales promotion. But if you're measuring impact of consumers' fundamental perception of the brand -- and if it is true that a perception change will lead to greater long term sales for the brand in question -- then that is the proper ROI model. And therefore you simply throw whatever creative into that model, mundane or whacky, and may the best outcome win. And if whacky wins, may the client have the stones to run it!

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By Renaissance | ATLANTA, GA November 2, 2007 11:45:56 am:

Ahmad,

You've made some good points here about not letting metrics overtake big ideas. This is a good reminder to CMOs, many of whom are trapped in their comfort zones despite being on the hot seat to advocate change. To most of us though, you're preaching to the saved.

In my history with brand and AA agencies, ROI was always a marketing consideration, but seldom at the forefront. Now metrics and ROI have become a huge part of marketing decisions and won't go away. The question is how to live with them.

Today I'm a Creative Director with a top-five DM and sales promotion agency, so ROI is at the core of everything I touch. I have never felt that big ideas and ROI were at odds. But I fully understand that now more than ever, big ideas must be 100% spot on to make the cut from an ROI standpoint.

The social conscience of America, fueled by the Internet, has also driven clients and agencies to bend over backwards to stay safe, avoid controversy and be politically correct. The higher the profile, the greater the scrutiny and push towards the center and tried and true. That's why more big ideas come from smaller clients and agencies that have less to lose instead of the bigs. That's why bigs do pro-bono work. (Memo to Commonground: Until you get huge, you stand a fighting chance of breaking through with a big idea or two!)

(Shout out to Don Richards! As I've said before, your help and career advice a decade ago have been invaluable to me. Many thanks once again.)

Mike Hyde
Creative Director
Aspen Marketing Services
Atlanta, GA
mhyde@aspenms.com

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By Calle | VILLA PARK, CA November 3, 2007 12:04:56 am:

I read in some comments that this be an article by or about a burnetter, of which I count myself having been hired by Leo Burnett himself before he died in 1971. However, I don't even have to read this post to know what I have always pontificated as true. "You can't measure your way to a breakthrough - or significant incremental success."

Plenty of companies say they need no help innovating, in act are counted among the top innovative companies, including Starbucks who delivered upon my doorstep a letter stating that they had other "specially designed data gathering and measurement resources in place." This as the rapid growth brand slipped into the death throws of becoming the mature earnings company Howard Shultz's memo so earnestly meant to shift. To that Global Strategy VP now introducing day old microwaved breakfast sandwiches al la McDonald's organizational model all I can say is "DOOHHHH!" Howard Schultz has a Palm Desert vacation home at Bighorn. But continue to think THIS way, and you never will. Howard got the home because he thought like a new product brand manager. A new product brand manager is a brand manager without a brand. They have to invent a brand or product to make or keep their job, Then they have to turn it over to someone else. And that's what's happened here. Good piece on ROI. Further, today, I was in a Starbucks, and heard to ad execs and a client toss the USP around. I asked had they ever heard of Rosser Reeves (the inventor of USP while a writer at Ted Bates). The answer, "no". Just more convenient banter. So sad.

Martin Calle
Chief Creation Strategist
www.CalleCompany.com

MADISON AVENUE BLOG (http://advertising-age.blogspot.com)

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By Grant | Raleigh, NC November 3, 2007 12:52:29 pm:

Seeking provable success metrics is noble and necessary. There is a tendency, as Ahmad cites, for clients to migrate toward measurable methods (especially direct mail and interactive media)just because they are more directly measurable than other methods. The caveat, however, is that measurability does not transalte into success. A strong DM response is 2-3%, and for interactive, a click-through rate of 1-3% is considered exceptional. What sometimes gets lost in this discussion is the converse formula - 97-98% of the time, the audience does not respond. The more important measures are conversion - the number of respondents who actually purchased, and net customer value - the net revenue value that a purchase delivers to the client after acquisition and operating costs are subtracted.

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By yorkhuang | SHANGHAI November 4, 2007 09:38:46 pm:

".... we're also the ones who have fueled the quantum jump ...."

I think you should know that a "quantum jump" is a movement from one quantum state to another, and is infinitesimally small - too small in fact, to be measured.

Congratulations may not be in order for your contribution to this change of state ......

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By gunther | Los Angeles, CA November 5, 2007 01:56:27 pm:

Good points, Ahmad -- this is precisely where the terms "media agnostic" and "media neutral" have the most relevance. Create great ideas and then choose select channels...perhaps some will be less appropriate than others, but through calculated risk, you can empower innovation to achieve the desired result(s).

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By ericjhenderson | New York, NY November 5, 2007 04:31:53 pm:

Yong: you have captured the intended sentiment of Ahmad's article... the quantum jump in this case being that (in this case ignoble) change from one state to another with no wholly detectable logic or trail. [To your point, our jump is a little easier to try to figure out.] So, far from seeking congratulations, at commonground we're not down with this particular quantum jump;so, we stay keen on confronting it and 'fessing up to any temptation to go down that path. It makes no sense to try to cheat to a more measurable, lower scale ROI by using an idea that maps only to measurability - vs. to the risk of actually achieveing conversation with a bunch of people.

Jorge Luis Borges beat us all to these points in "Del Rigor de La Ciencia" in which the cartographers kept enhancing the measurement capacity of the map of the province all the way up to the point of covering the province itself - in an exact one-to-one ratio. At some point, we're gonna have to just place our smartest bet.

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