"There's no sense that people are pressured to provide an ROI," said Emily Green, an analyst at Forrester Research, Cambridge, Mass. "Actual ROIs are very anecdotal and apocryphal. People treat it like a trade show. They hope a couple of prospects will produce big sales."
So far, b enchmarks simply don't exist to define a successful Web marketing effort: The Internet equivalent of the 2% target response rate in direct marketing hasn3/8t yet been developed.
"The simple direct marketing model doesn't exist in the Web today," explained David Atkins, business development manager for database marketing company DBM Group. "In direct marketing if you send 100 pieces out and one comes back you got a 1% response rate. In the Web you don't kn ow how large your universe is. And unless people fill out a form, you don't know who they are."
Indeed, cybermarketers are just beginning to get a handle on the cost side of the ROI equation and are learning by pain.
The market research company International Data Corp., for example, recently studied 20 Web sites that had invested in electronic commerce. "They had no idea going in how much it would cost, said Michael Sullivan Trainor, research director for IDC's Internet Commerce group. "It ended up costing them four times more than expected in the programming time involved." Many business marketers say they aren't rushing to quantify cyberspace because the medium is too new and u npredictable.
Even Federal Express Corp., which has been a cyber darling for using its Web site to reduce customer service and shipping costs, doesn't look for a bottom-line return from its site.
"We have no hurdle rate we have t o hit before we invest further," said Robert Hamilton, Federal Express electronic commerce marketing manager. "The environment is too turbulent to set a hurdle rate."
Also tricky in getting a Web P&L is capturing total labor ho urs for a job that usually involves employees already on the payroll. Said Mark Hodes, VP-director of interactive measurement at True North Technologies: "You need to allocate your budget on a product-by-product basis. Now many bu siness-to-business companies are throwing their budget into one lump sum. The next cut is looking at new media by product."
Regardless of their inability to measure ROI, many business marketers say they can't afford not to have a Web site because that3/8s where customers go to find them. High-tech companies like Adobe Systems, for example, say they don't look to justify their Web site; having it is mandatory. Instead, they concentrate on using the site mor e effectively.
"We're still learning what are the right questions to ask, said Kevin Wandryk, Adobe's director of business development. "One of the things we want to find out a lot more about: When users come to a Web site, how much time do they spend?"
Most business marketers are concentrating on marketing, rather than financial, measures. Preferred measurement statistics include page views, banner click-throughs and leads and inquiries generated.
In some cases, marketers are deriving a simple cost per sales lead by dividing Web site costs by the number of sales leads. But some see that as simplistic: "Today a lot of companies are calculating the cost per lead. That's a very pa rochial way of looking at it," said Tom Jones, VP-marketing for Industry.Net, an online marketplace for manufacturers and suppliers. "They're looking at the Web as nothing more than an advertising vehicle. They're not looking at, `How much would you pay to have an interactive link with all your customers?' or `How much would you pay to have a faster way to get critical information on your products?' That is exactly what the Web can do."
At least one marke ter agrees wholeheartedly.
"We never had a tool in marketing that told you how long you looked at a brochure for a car," said Sal Abramo, electronic marketing manager for Hewlett-Packard Co.'s Medical Products Group. "How long y ou lingered on the headlight or the color of the car. How much is it worth to be aware that the color purple is clicked on most often for a laser jet?"