Nowadays, table stakes can be dependent on the accountability of the marketing. Companies are now expecting CMOs together with various marketing leaders to show them proof with quantities in order to prove that the marketing investments they are making are having a positive impact on the business.

Because of their quest to have evidence that is based on quantity, the most commonly used metrics by marketers today is the ROI or more specifically known as the marketing ROI. It has an alternative name which is return on marketing investment (ROMI). When it comes to marketing ROI, the measurement is done in a different manner, the definition is different and the purposes are not what people expect. This is why ROI Anarchy happens in the marketing sector. While the effort in connecting marketing to the revenue of the business and other outcomes is already proving to be a difficult job, ROI Anarchy makes it more complicated.

As what they always say, there is a light at the end of the tunnel. A recently published paper was authored by four gurus who are experts in marketing science and academic. This paper tackles the concept of MROI as well as the steps on how companies should use it in measuring and application.

According to them, there are three different variations of MROI that made it purpose confusing:

  • Calculation method. This has variations and is mostly based on various factors such as funnel conversion, a type of cost method and general marketing lift assessment. To make the problem harder, it uses either time frames – short and long term.
  • Some companies choose to be broad while some are granular. Others are focusing on a single marketing method while others are looking at it as one big picture.
  • Response curve level. MROI is measured using various levels on the response curve.

This is the reason why the authors have advised marketers to clearly the method used in measurement and what they have measured in a specific context in order to get the right answer when utilizing their marketing ROI calculator. This only means that short-term decisions should not be considered as the same as long-term ones.

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About Author: Christopher Williams