I got my 5th invitation today to join the 6 Degrees of Separation group on Facebook.

I decided to investigate it. I’m seriously intrigued (as we all should be) by the social networking phenomenon and how it will impact the marketing world in the months and years ahead. Clearly there’s a viral potential for ideas and applications within social networks that is unprecedented.

Yet, I’m still waiting and watching for case studies that demonstrate the marketing ROI on these initiatives. There is no doubt these concepts draw eyeballs… and can be sticky (at least for short bursts of time). But is anyone other that the app developers making money?
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If you’re not doing ROI calculations before and after your marketing initiatives, you certainly should.  Let me remove any excuse for not doing this…

I’m surprised by how easy it is for marketers to overlook this important calculation as they weigh their creative options and plan their campaigns.  So, let this first act as a simple reminder not to undertake anything marketing-related this year without at least considering your anticipated return… and the return you got the last time you did something similar.

Sometimes it’s admittedly difficult to arrive at solid ROI forecasts in the marketing arena.  Your investment in PR… in word-of-mouth… brand-building….  That’s not to excuse those who turn a blind eye all-together to ROI relative to these activities, but there is no denying that it can be tough.

But when it comes to direct marketing and pay-per-click advertising, you’re insane if you aren’t being diligent about ROI.

This is why I’ve taken a couple of my own ROI calculators and published them here for you to use whenever you like. Bookmark the page. Send it to your colleagues. And never again accept another DM or PPC marketing proposal without a clear calculation of ROI (along with the underlying assumptions).
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I have just completed a three-month study testing the effectiveness of SEO and Google Adwords against radio advertising in generating quote requests for a consumer insurance product.  The test was contained to a market area of one city and surrounding areas.

The local radio budget was $13,000/month, and the campaign ran for approximately three months on three stations selected by the company’s ad agency as being representative of the target demographic. To allow the radio a fair chance to establish frequency, I began tracking the search marketing comparison at the start of the second month of radio advertising and am reporting on exactly two months of radio results data ($26,000 invested over the two months – not counting the cost of producing the ad).

The Adwords budget for the same local market increased over the period of the study from approximately $400/month to approximately $750/month. And the total SEO budget was approximately $2,000/month.
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You’ve heard the old saying.  “I know half of my marketing budget is wasted.  I just don’t know which half.”

I’ve said it before… I hate that saying. But I guess it wouldn’t still echo in the conversations of marketers if, once upon a time, there weren’t some truth to it.

If a remark like that rolls off your lips these days however, odds are, you’re just too lazy to figure out what’s not working.
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If you’ve ever been involved with a start-up, you know the paranoia you feel with respect to competition – especially if you’re trying to live up to your business plan’s claim of the “first mover advantage.” Multiply the anxiety if, heaven forbid, your competition is a large and well-established company.

Here and now, I’m going to challenge the idea that competition is more bad than good for innovators and start-ups – and while I’m at it, I think I’ll dispute the notion that a first mover advantage is necessarily a good thing.

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I got a call recently from a friend whose company has developed a new consumer software application. He had been presented with an opportunity to buy banner ad exposures on a newspaper web site.  “The price,” he said, “seems pretty amazing.” (In a good way.)

The newspaper had offered him banner ads on their site at a price of $0.02 per exposure. So, he would pay 2 cents every time the banner was presented to a site user.  This seemed so cheap, he was suspicious. My reaction was the opposite.

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