As an ex-direct marketer I don’t feel comfy unless I know exactly how much profit my marketing campaigns have made. To the penny.
Offline marketing is traditionally divided into above the line and below the line campaigns. Below the line involves un-glamorous media like direct marketing and cheapo Direct Response TV. Above the line is fluffy stuff like glossy magazine ads and big budget TV brand building.
You can always calculate ROI, cost per response and cost per sale below the line. But the profitability of above the line work is harder – if not impossible – to quantify. There’s a definite correlation between, say, a high visibility TV branding campaign and an increase in brand awareness. But you can’t really pin down its actual monetary value.
Interesting parallels online
Direct response campaigns like email marketing generate measurable returns. As does SEO, which visibly increases physical visitor numbers. Social media marketing is a different kettle of fish, similar to above the line marketing. You can tweet until you’re blue in the face but it isn’t always possible to relate your spend to actual income.
Having said that, Twitter and co are slowly coming into their own as far as relatively ethereal stuff like reputation management and brand building is concerned. I plan to hang fire until the medium’s first major financial coup is announced. Once I can see a crystal clear connection between social media marketing investment and return, I’ll consider joining the party.
Update for 2015 – These days I use Twitter networking – NOT marketing – to generate around 60% of new business.