What is the Return on Investment (ROI) of an ad campaign? How do you go about measuring it? Which attribution models work best for your sales process?

These are some of the things I was working on this afternoon which led me to ponder the following relationship. As you start to think of the ROI question, it sounds very straight forward.

Return on Investment = (Gain – Investment) / Investment

Then you begin to realize that there are a lot of different ways to define each of these. And what about the interplay between the various ad campaign investments? Where does it end?

It’s not until you work it through further that it becomes clearer once again.

Check out this fun but discussion-provoking presentation on social media and measuring its impact on bottom line.

“Meaningless statistics went up 2% last week.”

Thanks to John Favalo, Managing Partner at the B2B Group of Eric Mower and Associates, for referencing this smirk-evoking quote at a recent conference. I unfortunately missed where it came from and haven’t been able to find the original source.

Isn’t it interesting how numbers can add perceived importance to something even though they may be irrelevant? In my recent post on strategy vs. tactics, I talked about the importance of having a big picture view, whether you’re a traveler or marketer. This is just as important in web analytics.

Now don’t get me wrong. Online marketing has truly benefited from measurement tools. These range from Google Analytics, a free yet robust web analytics service, to competitive intelligence tools such as Hitwise, and marketing automation software from the likes Marketo and Eloqua. The question is, what to do with all the data?

The key is measuring what you need to measure, getting the data you need to make the important decisions. Granted, it isn’t always easy to know what important means. But if your strategy is clear, it becomes a whole lot easier.