As a blogger, I pride myself on good research, creative content and being relevant. For this week’s Kroma blog, I was asked by my boss to write on the ROI (Return On Investment) of digital design. Inside I thought, “Uh oh. That doesn’t sound like as much fun as what I’ve written on, oh . . ., up until NOW!” But, I thought, “Ok, maybe it will be a great time to brush up on this ROI thing and learn something that will help our clients understand it.” Hours of research later, late nights with coffee stains on my shirt, bleary eyed, frustrated, and nowhere close to a final blog copy here I am; empty.
What I have learned is that the ROI idea is huge, very ethereal to a lot of people and it’s very relative to the object of its assessment. Just what is the return value? In fact, there are bloggers out there who say that ROI is such a broad idea that we sometimes ask the wrong question: What is the ROI of such and such? When the real question should be: Did such and such turn out to be worth doing?
In Social Media and ROI: Some clarity. (Again.) Olivier Blanchard says, “ROI went from being a simple financial calculation of investment vs. gain from investment to becoming any number of made-up equations mixing unrelated metrics into a mess of nonsense . . . They measure nothing. Their aim is to confuse and extract legal tender from unsuspecting clients, nothing more. Don’t fall for it.” Wow, well that just instills confidence, doesn’t it?!
I think the main thing I learned on this ROI quest was that value is relative. What return we get, depends. (Don’t you hate it when you ask someone something and all they can say is “It depends.”) It depends on what you expected of the investment as to the value it gains. It depends on the formula you use to calculate the ROI. (Apparently there are various calculations. Very confusing!) There’s also the value that isn’t inherent to the outcome i.e. not monetary but still valuable. All in all, there really isn’t a clear cut way to determine the ROI of anything unless you determine what it is you are looking to calculate in the first place. So, it just depends.
If you aren’t much clearer on ROI, you’re in good company. Let’s commit to this: know your product, see the value as more than a monetary input or outcome, and determine ahead ”What is value?”