Remember the Basic Economics of Marketing (ROI)

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.

This seems to be a common challenge faced by marketers – forecasting return on investment (ROI) BEFORE deploying marketing dollars. Yet I would argue that there are few if any cases in which ROI should not be the primary driver of marketing decisions.

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