Roi Of Conversation

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The ROI of The ROI of ConversationConversation

A paper prepared byA paper prepared byPhil OSBORNE and Robert AITKENPhil OSBORNE and Robert AITKEN

for for

PERFORMANCE PERFORMANCE MANAGEMENT: MANAGEMENT:

PERSPECTIVES and PERSPECTIVES and AGENDAS.AGENDAS.

An inter-disciplinary research An inter-disciplinary research colloquiumcolloquium

12 December 200712 December 2007

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markets are markets are conversationsconversations

the inspiration…the inspiration…

corporate corporate communication communication appears appears contrived contrived and artificialand artificial as the as the language of the language of the 18th century French 18th century French courtcourt

we can’t go on with we can’t go on with suspicious minds …suspicious minds …

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overviewoverview

• traditional marketing traditional marketing communication performance communication performance metricsmetrics

• the web2.0 environmentthe web2.0 environment

• marketing management marketing management implicationsimplications

• marketing metrics implicationsmarketing metrics implications

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fundamental fundamental communication modelcommunication model

more complex variations on this basic theme more complex variations on this basic theme including the addition of feedback loops, including the addition of feedback loops, though transmission models remain the though transmission models remain the

dominant logic…dominant logic…

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traditional metricstraditional metrics

based on a linear model of based on a linear model of communication, marketers strive to communication, marketers strive to create the ‘perfect’ message and create the ‘perfect’ message and delivery through a noise free delivery through a noise free channel…channel…

performance and associated metrics performance and associated metrics currently assess the efficiency of currently assess the efficiency of achieving this utopiaachieving this utopia

signal vs. noisesignal vs. noise

Slide # Slide # 66Source: SRD Group, Customer Satisfaction Averages, New Zealand, 2006

44% of consumers say the majority of their Customer Experiences are “bland”

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Customer Satisfaction Averages, New Zealand, 2006

consequences of traditional consequences of traditional approachapproach

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marketings disconnect…marketings disconnect…

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Case studyCase study

source: Fortune, 2005

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some signals… (or is it some signals… (or is it noise?)noise?)

18%: Proportion of TV advertising campaigns 18%: Proportion of TV advertising campaigns generating positive ROIgenerating positive ROI

54 cents: Average return in sales for every $1 spent 54 cents: Average return in sales for every $1 spent on advertisingon advertising

256%: The increase in TV advertising costs (CPM) in 256%: The increase in TV advertising costs (CPM) in the past decadethe past decade

100%: The increase needed in advertising spend to 100%: The increase needed in advertising spend to add 1-2% in salesadd 1-2% in sales

90%: Proportion of people who can skip TV ads who 90%: Proportion of people who can skip TV ads who do skip TV adsdo skip TV ads

80%: Market share of video recorders with ad 80%: Market share of video recorders with ad skipping technology in 2008skipping technology in 2008


signals 2…signals 2… 117: The number of prime time TV spots in 2002 117: The number of prime time TV spots in 2002

needed to reach 80% of adult population – up from needed to reach 80% of adult population – up from just 3 in 1965just 3 in 1965

14%: Proportion of people who trust advertising 14%: Proportion of people who trust advertising informationinformation

56%: Proportion of people who avoid buying products 56%: Proportion of people who avoid buying products from companies who they think advertise too muchfrom companies who they think advertise too much

65%: Proportion of people who believe that they are 65%: Proportion of people who believe that they are constantly bombarded with too much advertisingconstantly bombarded with too much advertising

69%: Proportion of people interested in technology or 69%: Proportion of people interested in technology or devices that enable them to skip or block advertisingdevices that enable them to skip or block advertising






new picture , new rolesnew picture , new roles


customers doing it for customers doing it for themselves…themselves…


marketing management marketing management implicationsimplications

control / ownership / and power shiftscontrol / ownership / and power shifts

the noise is the messagethe noise is the message

marketing communication includes marketing communication includes listeninglistening

Ignore at your peril!Ignore at your peril!


measurement measurement implicationsimplications

traditional firm initiated marketing messages are traditional firm initiated marketing messages are only a small (and reducing) part of only a small (and reducing) part of communication mixcommunication mix

many of the new ‘messages’ are actually the many of the new ‘messages’ are actually the noise in the traditional modelnoise in the traditional model

marketing managers require methods and marketing managers require methods and metrics of tracking how these multiple messages metrics of tracking how these multiple messages enhance (or detract) from consumers enhance (or detract) from consumers understanding of the brand (value proposition) understanding of the brand (value proposition) and the effect on performance…and the effect on performance…

community centric measurescommunity centric measuresmeasure for awareness not management!measure for awareness not management!


inter-related messaginginter-related messaging

rather than rather than measuring the first measuring the first stone thrown stone thrown (1_firm initiated (1_firm initiated communication) communication) metrics must metrics must capture the effect of capture the effect of subsequent ‘ripples’subsequent ‘ripples’


some positives…some positives…


one size fits no one…one size fits no one…

mass production doesn’t work for mass production doesn’t work for messages either, why would it work messages either, why would it work

for metrics?for metrics?


references and resourcesreferences and resourcesThe clutrain manifesto – full download available @ The clutrain manifesto – full download available @ http://www.cluetrain.com/book/index.htmlhttp://www.cluetrain.com/book/index.html

Shannon Weaver modelShannon Weaver modelhttp://www.shkaminski.com/Classes/images/Shannon-Weaver%20Model.gifhttp://www.shkaminski.com/Classes/images/Shannon-Weaver%20Model.gif

New Zealand customer satisfaction slide liberated fromNew Zealand customer satisfaction slide liberated fromhttp://www.slideshare.net/alainthys/a-little-less-conversation-slidesharehttp://www.slideshare.net/alainthys/a-little-less-conversation-slideshare

Social Network graphicsSocial Network graphicshttp://web2.socialcomputingmagazine.com/http://web2.socialcomputingmagazine.com/

Kryptonite locks material Kryptonite locks material Alex Osterwalder Alex Osterwalder http://www.slideshare.net/Alex.Osterwalder/social-media-for-communicators-http://www.slideshare.net/Alex.Osterwalder/social-media-for-communicators-web20-iabcweb20-iabcPicturePicturehttp://www.wired.com/culture/lifestyle/multimedia/2004/09/64987?slide=2&slideView=2http://www.wired.com/culture/lifestyle/multimedia/2004/09/64987?slide=2&slideView=2VideoVideohttp://nz.youtube.com/watch?v=t8XxcOj3Seohttp://nz.youtube.com/watch?v=t8XxcOj3Seo

Influence RipplesInfluence Rippleshttp://blog.futurelab.net/2007/09/influence_ripples_social_media.htmlhttp://blog.futurelab.net/2007/09/influence_ripples_social_media.html


Full Details @ Full Details @

http://creativecommons.org/licenses/by-nc/3.0/nz/http://creativecommons.org/licenses/by-nc/3.0/nz/

Roi Of Conversation

Business

communication metrics

traditional metrics

video http

picture http

marketing messages

proportion of people

new messages

linear model of communication