The ROI (Return on Investment) is fundamental to measure the success of an action or communication campaign. After all, it evaluates the relationship between the amount invested and the result obtained by the organization.
In fact, this metric allows you to evaluate the health of your initiatives and also provides valuable inputs for structuring new marketing strategies.
But who has the responsibility to do this measurement: the agency or the client? That is the question that this article will answer.
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Why is ROI calculated?
The objective of calculating the return on investment is to compare how much a company has invested in an action with the profit generated. Therefore, ROI can be used for:
- Measure whether the capital is being applied in the right way in communication campaigns
- Verify the way in which each investment contributes to the growth and development of the company.
- Tracking possible losses.
- Identify projects that can be improved or terminated
Thus, the absence of such an evaluation can hinder or, at the very least, make it difficult to control stock performance.
That is, projects that generate losses can remain in operation, reducing the ability to map new business opportunities. At the same time, new initiatives are not perceived, going in the opposite direction of the assertiveness of investments and intelligent application of resources.
But, in practice, who should measure ROI?
Taking into account the information already mentioned, the impacts of not calculating the return on investment in communication become very clear. However, the question is: is it the communication agency or the brand that should measure ROI?
The answer? It depends.
When ROI is calculated by the brand
For the client, measuring the return on investment means having authority over their own projects.
The managers, who know each of the stages and results of communication planning, have the necessary information to delimit where, how, how much, and why to invest in various activities. And this includes publications, events, campaigns, press offices, among others.
“Although it is an essential metric for businesses, 35% of brands find it difficult to map out clear metrics for content marketing ROI and ranking 5th among the top challenges for B2B organizations.” Source: 2021 Edition of B2B Content Marketing, report by the Content Marketing Institute
So, if the decision is to do the monitoring “in-house”, it will be necessary to assemble a team with experience and invest in tools capable of bringing the necessary data quickly and consistently.
This model is valid for companies with a large volume of investment in communication or for those that rely on agencies without the capacity to measure results in a strategic way.
When is made by the agency
Agency measurement, on the other hand, has all the advantages of outsourcing:
- Reduction of operational costs
- Freeing up human resources
- Reduction of administrative burden
- Simplification of operational structures.
In this case, the client counts on a supplier qualified to define criteria, establish indicators, and objectives. Besides being able to correct routes more quickly.
Therefore, the relationship between client and agency needs to be one of complicity and trust, since the teams will have to work in total synchrony.
The investment here – besides vendor compensation, obviously – is in qualified immersions and constant, regular exchanges of information so that both teams are on the same page about objectives, goals, and metrics.
How to measure ROI?
Regardless of the model chosen, knowing efficient tools for calculating ROI is important in order to gather results from various channels, both traditional ones as well as social media.
Among these tools, we can mention Match Social, Knewin’s solution that tracks news published in online media when they are shared on social media, understands public sentiment, has a dashboard with likes, shares, and comments, and generates reports.
“47% of B2B companies do not measure the ROI of their communication actions. The justifications are that “there is no formal request to do this task”, “an easier way to do this is needed” and “the company doesn’t know how to measure it”. Source: 2018 Edition of B2B Content Marketing, a report by the Content Marketing Institute
What about the centimeter?
Another way to calculate the return on investment of communication is centimeters, also known as media valuation.
This metric consists of comparing the value of the space earned in the spontaneous media and an ad on the same platform, which is valid for printed materials, digital newspapers and magazines, TV and radio, and, of course, social media..
The objective of centimeters is to measure how much a news item would have cost the company if it were advertising.
To conclude: measuring the return on investment of communication campaigns bears fruit for companies, which know in depth the results of their activities and monitor the agencies’ deliveries.
On the other hand, it also brings benefits to the communication agencies themselves, which embrace a service that many organizations cannot perform internally.
Finally, whether for company or agency, ROI calculation executed with the right tools contributes to the well-being of strategies and profitability.
To find more information about communication and marketing strategies and the most suitable monitoring solution for your business, contact Knewin. We can leverage your brand’s results with our solutions.