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Roi Of Conversation

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Roi Of Conversation

  1. 1. The ROI of Conversation A paper prepared by Phil OSBORNE and Robert AITKEN for PERFORMANCE MANAGEMENT: PERSPECTIVES and AGENDAS. An inter-disciplinary research colloquium 12 December 2007
  2. 2. markets are conversations <ul><li>the inspiration… </li></ul><ul><li>corporate communication appears contrived and artificial as the language of the 18th century French court </li></ul><ul><li>we can’t go on with suspicious minds … </li></ul>
  3. 3. overview <ul><li>traditional marketing communication performance metrics </li></ul><ul><li>the web2.0 environment </li></ul><ul><li>marketing management implications </li></ul><ul><li>marketing metrics implications </li></ul>
  4. 4. fundamental communication model more complex variations on this basic theme including the addition of feedback loops, though transmission models remain the dominant logic…
  5. 5. traditional metrics <ul><li>based on a linear model of communication, marketers strive to create the ‘perfect’ message and delivery through a noise free channel… </li></ul><ul><li>performance and associated metrics currently assess the efficiency of achieving this utopia </li></ul><ul><ul><li>signal vs. noise </li></ul></ul>
  6. 6. consequences of traditional approach Source: SRD Group, Customer Satisfaction Averages, New Zealand, 2006 44% of consumers say the majority of their Customer Experiences are “bland” Customer Satisfaction Averages, New Zealand, 2006
  7. 7. marketings disconnect…
  8. 9. Case study source: Fortune, 2005
  9. 11. some signals… (or is it noise?) <ul><li>18%: Proportion of TV advertising campaigns generating positive ROI </li></ul><ul><li>54 cents: Average return in sales for every $1 spent on advertising </li></ul><ul><li>256%: The increase in TV advertising costs (CPM) in the past decade </li></ul><ul><li>100%: The increase needed in advertising spend to add 1-2% in sales </li></ul><ul><li>90%: Proportion of people who can skip TV ads who do skip TV ads </li></ul><ul><li>80%: Market share of video recorders with ad skipping technology in 2008 </li></ul>
  10. 12. signals 2… <ul><li>117: The number of prime time TV spots in 2002 needed to reach 80% of adult population – up from just 3 in 1965 </li></ul><ul><li>14%: Proportion of people who trust advertising information </li></ul><ul><li>56%: Proportion of people who avoid buying products from companies who they think advertise too much </li></ul><ul><li>65%: Proportion of people who believe that they are constantly bombarded with too much advertising </li></ul><ul><li>69%: Proportion of people interested in technology or devices that enable them to skip or block advertising </li></ul>
  11. 17. new picture , new roles
  12. 18. customers doing it for themselves…
  13. 19. marketing management implications <ul><li>control / ownership / and power shifts </li></ul><ul><li>the noise is the message </li></ul><ul><li>marketing communication includes listening </li></ul><ul><li>Ignore at your peril! </li></ul>
  14. 20. measurement implications <ul><li>traditional firm initiated marketing messages are only a small (and reducing) part of communication mix </li></ul><ul><li>many of the new ‘messages’ are actually the noise in the traditional model </li></ul><ul><li>marketing managers require methods and metrics of tracking how these multiple messages enhance (or detract) from consumers understanding of the brand (value proposition) and the effect on performance… </li></ul><ul><li>community centric measures </li></ul><ul><ul><li>measure for awareness not management! </li></ul></ul>
  15. 21. inter-related messaging <ul><li>rather than measuring the first stone thrown (1_firm initiated communication) metrics must capture the effect of subsequent ‘ripples’ </li></ul>
  16. 22. some positives…
  17. 23. one size fits no one… mass production doesn’t work for messages either, why would it work for metrics?
  18. 24. references and resources <ul><li>The clutrain manifesto – full download available @ http://www.cluetrain.com/book/index.html </li></ul><ul><li>Shannon Weaver model </li></ul><ul><ul><li>http://www.shkaminski.com/Classes/images/Shannon-Weaver%20Model.gif </li></ul></ul><ul><li>New Zealand customer satisfaction slide liberated from </li></ul><ul><ul><li>http://www.slideshare.net/alainthys/a-little-less-conversation-slideshare </li></ul></ul><ul><li>Social Network graphics </li></ul><ul><ul><li>http://web2.socialcomputingmagazine.com/ </li></ul></ul><ul><li>Kryptonite locks material </li></ul><ul><ul><li>Alex Osterwalder </li></ul></ul><ul><ul><li>http://www.slideshare.net/Alex.Osterwalder/social-media-for-communicators-web20-iabc </li></ul></ul><ul><ul><li>Picture </li></ul></ul><ul><ul><li>http://www.wired.com/culture/lifestyle/multimedia/2004/09/64987?slide=2&slideView=2 </li></ul></ul><ul><ul><li>Video </li></ul></ul><ul><ul><li>http://nz.youtube.com/watch?v=t8XxcOj3Seo </li></ul></ul><ul><li>Influence Ripples </li></ul><ul><ul><li>http://blog.futurelab.net/2007/09/influence_ripples_social_media.html </li></ul></ul>
  19. 25. Full Details @ http://creativecommons.org/licenses/by-nc/3.0/nz/

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