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Last week I found myself at the 2012 Telstra digital summit. An event that I, along with many of the other attendees were pleasantly surprised to find yielded plenty of legitimate insight. There were some seriously impressive presentations from the likes of Brian Solis, Robert Scoble and Shel Israel.

Inevitably, within the Telstra panel, the discussion turned to the slippery concept of return on investment (ROI) for digital campaigns. The statement was made by a Telstra employee that (and note the lack of quotation marks here) when someone asks you to present your proof of ROI for a project, it’s really just an indication that you don’t have the level trust that you need.

The comment slipped by relatively unchecked and discussion topics progressed unabated. However I think such a statement warrants just a little bit more of an exploration, largely because it’s complete and total BS.

If someone asks you to provide proof of ROI around the project, it’s because calculating that data is an fundamentally useful thing. For a professional to imply that a requirement to produce it is symptomatic of a lack of trust demonstrates not only a total disregard for the value of knowing your ROI, but a total ignorance towards the fundamental logistics behind how their salary mysteriously appears in their bank account each month.

Show your working out.

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Yes, we may have greater confidence in people with solid track records when it comes to delivering ROI, we may even give these people larger budgets and greater creative freedom. But these people should hardly be exempt from being required to demonstrate the how and why of their successes or failures.

Correct me if I’m wrong, but isn’t that just good business practice?

You might have developed the coolest, flashiest campaign this side of the equator. You might have celebrity brand advocates, blockbuster production value and catchy theme music pouring out of every piece of content, but unless you can join the dots and demonstrate how your boss (or client) has seen (or better yet, is going to see) a change in X proportionate to the money they spend, then you’re not producing a business campaign, you’re essentially producing art.

ROI and its different sources can be a pain to calculate, but it’s data that matters. For some organisations, the cost of calculating an exact figure for ROI might outweigh the benefits of having that figure. Perhaps you simply want an indicator that the ROI is putting you ahead, rather than behind.

Either way, if we can understand where the ROI in relation to a campaign came from and understand why it came at all, we provide ourselves with an incredibly powerful foundation on which to build future campaigns.

Do your homework.

Happy trails

– Matt