Engagement Is Vanity. Profits Are Sanity. | DMA

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Engagement Is Vanity. Profits Are Sanity.

It is surely one of life's larger ironies that while social media and digital marketing are lauded largely for their measurability, the fact is that most of the things they allow to be measured are, when all is said and done, largely worthless.

There. I've said it. Quite an admission for someone who spends his life creating and measuring the results of digital marketing campaigns, isn't it? But lest you think I'm having a mid-life crisis or, worse, a Jerry Maguire moment, allow me to explain.

'Engagement' is the marketing word of the year. This year, last year, and in fact any year you care to mention for the last decade or so. It is the holy grail for every commercial organisation, sought after by marketers and endlessly discussed and celebrated wherever the cognoscenti of the digital marketing world gather.

Unfortunately, while engagement is all well and good, it doesn't pay the bills.

Congratulations On The Engagement. It Isn't Marriage Though, Is It?

There are many measures of engagement out there. Perhaps too many. I'm sure we have all sat in many meetings where highly impressive KPIs have been thrown around: from 'likes' by the thousand to page impressions in the millions.

However, the fact is that many KPIs flatter to deceive, as they simply reflect the number of ephemeral, intangible and perhaps unsatisfactory touchpoints you have enjoyed with customers; which may make you feel good, but won't impress your accountant one tiny bit.

So let's be honest. You may have flirted on Facebook, perhaps even shared a quick Tumblr moment, but engagement can still leave you a long way from the all-important consummation: when you turn engagement into conversions and profit from the relationship.

So You've Scored? Now Take Your Relationship To The Next Level.

Automated software, when used correctly, makes it easy to score every customer interaction in order to assess their level of engagement. But what's a share really worth? Where's the true value when someone clicks on a link?

Well, it's easy enough to ascribe a value to all these KPIs. Two points for a click. Three points for a share. Then before you know it you're up to 25 points and can legitimately regard that prospect as a marketing-qualified lead and hand them over to your colleagues in Sales.

But wait, what do we really know at this point? A prospect may well have liked your content, read your press ad and opened your email; but, still, no money has changed hands. There’s no ROI. Yet.

Even if that prospect signs up for your newsletter or content funnel and starts retweeting on your behalf, you might feel good, but we're still in the land of vanity. Only when a sale is made do we enter the land of sanity, and even then, we still have to make sure we're measuring the true value of that sale.

Accurate ROI? Ask Your Accountant As Well As Your Sales Team.

Good news, you weren't just being led up the garden path. All that Engagement finally led down the all-important aisle that leads to the cash register. Sales are happy. Marketing's ecstatic. But what do your Finance Director and Accountant think of the actual ROI? After all, they're the ones that just paid for the reception.

It all depends on how you choose to measure ROI. Most businesses will expect that every marketing pound they spend will bring them ten pounds back; but while that may seem like a return of ten times the investment, the truth is rather more complicated. After all, sales are not the same thing as profits for most businesses.

Certainly, the Sales department will always know what margin every sale attracts, not to mention the average lifetime value of every new customer. Finance will know the operating costs of the business. Marketing will know the cost per lead, and can even decide whether to attribute ROI based on one campaign or channel, or to amortize the figures against the cost of everything from social media to exhibition stands over a five-year cycle.

Ultimately, however, the important thing is that all of these functions need to be in agreement over what success looks like, which can only really be seen on the bottom line of your accounts. So, returning to thoughts of Jerry Maguire for a moment, it's only when someone shows you the money - and in terms of actual, verifiable profit margin - that you can really understand the relationship between customer engagement and marketing ROI.

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