The New ROI

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There are two things we know about online advertising today. First, that it’s once again growing at a very healthy clip: according to the recent IAB Revenue Report, the Q1 ’04 total of $2.3 billion represents a 54% increase over the same period in ’03. Second, we know that things are playing out differently this time: growth is being funded by major marketers who – finally – are starting to reallocate budgets toward online. Unlike the VC-funded dotcoms that drove the online gold rush of the late 90s, today’s online advertisers bring a more balanced perspective to the task. They look at online as a staple in their marketing diet, not as some kind of rare, flaming dessert dish. They have the right outlook, they’re gaining the support of upper management and they have loads of quality advertising options on today’s evolved, high-speed, works-pretty-darn-well Internet. From where I sit, all they lack is the right catch phrase. So I’m volunteering one.

RETURN ON INTEGRATION. Write it down.

The old notion of ROI – return on investment – has been used as a club against our fledgling medium, alternately challenging its lack of marketing power and suppressing its price. Each and every online ad or campaign has had to demonstrate its immediate, direct and unique impact on the bottom line.

We’re starting to see some remarkable thinking in the boardroom. Marketers have funded several IAB Cross Media Optimization Studies (XMOS) and have demonstrated that an online component in the marketing plan drives better overall performance, much like “Intel Inside” or that Platformate stuff that Shell used to put in its gasoline.

But it goes beyond just realigning the media mix. Recently Yahoo! teamed with Pepsi on the successful launch of Consumer Direct, a service that cross-pollinates the AC Nielsen Homescan panel with Yahoo! visitors to measure how an online campaign can drive offline sales. While it may not necessarily trip the floodgates for packaged goods marketers, it’s yet another clear permission signal for integrating online into the overall mix… MARKETING mix, that is.

In appraising the real value of the online channel, marketers are looking beyond the narrow choices of this advertising medium vs. that one. As packaged goods, financial, pharmaceutical, automotive and other marketers make this leap, they see the many ways online makes their marketing plans more cohesive, impactful and – well – integrated. Soon the debate won’t be about whether to take money out of television; it will be the ways in which online reinvents couponing, promotions, rebates, customer information distribution, relationship management and a raft of other tools they use every day.

You see, the Internet isn’t just an element to be integrated into the marketing mix; it’s actually the agent of all marketing integration. A marketing campaign without the Internet is like an office network without any Ethernet cable. So as marketers look to truly measure their ROI – return on INTEGRATION – they need to acknowledge and embrace the centrality of the Internet in making it so. Appropriate funding will surely follow.

Send your comments and questions directly to Doug Weaver

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