Why B2B Marketing ROI Measures Lead To Failure

Time To Lose Control of Your Marketing

David Meerman Scott

Marketing and Sales Visonary

No one knows more about using the new Real-Time tools and strategies to spread ideas, influence minds and build business than David Meerman Scott. He's a marketing strategist, speaker, advisor to emerging companies, and author of ten books including three international bestsellers.

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Spreading Ideas and Telling Stories

For your ideas to spread, you’ve got to give up control. Make your information on the Web totally free for people to access, with absolutely no virtual strings attached: no electronic gates, no registration requirements, and no email address checking necessary.

B2B Marketing Callout

Think in terms of spreading ideas, not generating leads.

Yes, this advice will come as a shock to many marketers steeped in the tradition of direct mail advertising—a form of marketing that always requires disclosure of personal information via a toll-free phone call or business reply card (“BRC” in the lingo of direct mail gurus).

Marketers who learned the secret workings of BRCs, the ins and outs of buying contact lists, and the subtle coercion tactics required when creating “offers” naturally want to transfer these esoteric skills (some might even say “black arts”) to the Web. 

As a result, many folks create valuable and interesting information online and then do the exact wrong thing to distribute it— require viewers to provide personal information first.

This is a terrible strategy for spreading your ideas. (However, if your only goal is to build a mailing list, then the strategy may still be valid. But how many companies are in the business of just building a list?) When you make people give an email address to get a white paper or watch a video, only a tiny fraction will do so; you will lose the vast majority of your potential audience.

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Sales Leads Are The Wrong Goal

I’m often confronted with the issue of how to measure an online initiative’s results. Executives at companies large and small as well as marketing and PR people tend to push back on the ideas of digital content creation because they want to apply old rules of measurement to the new world of spreading ideas online.

The old rules of measurement used two metrics that don’t matter for spreading ideas, especially online:

  1. We measured “leads”—how many business cards we collected; how many people called the toll free number; how many people stopped at the tradeshow booth; and how many people filled out a form on our Web site, providing their email address and other personal information.
  2. We measured “press clips”—the number of times our company and its products were mentioned in mainstream media like magazines, newspapers, radio, and television.

While applying these forms of measurement might be appropriate offline, using them to track your success on the Web just isn’t relevant; they don’t capture the way ideas travel. Worse, the very act of tracking leads hampers the spread of ideas.

People know from experience that if they supply their personal information to an organization, they’re likely to receive unwanted phone calls from salespeople or to find themselves on email marketing lists. Most won’t bother.

In fact, I have evidence from several companies that have offered information both with and without a registration requirement that when you eliminate the requirement of supplying personal information, the number of downloads or views goes up by as much as a factor of fifty.

B2B Marketing

Focus on spreading your ideas. Make your information totally free, with no registration required.

That’s right—if you require an email address or other personal information, as little as 2% of your audience may bother to download your stuff. Obsessing over sales leads and press clips is likely to be counter-productive.

For decades, companies have offered Web content as lead bait. But the goal should be to get the word out about your organization, not to misuse the Internet for the sake of an outdated technique.

Similarly, measuring success by focusing only on the number of times the mainstream media write or broadcast about you misses the point. If a blogger is spreading your ideas, that’s great.

If ten people email a link to your information to their networks or post about you on their Facebook page, that’s amazing. You’re reaching people, which was the point of seeking media attention in the first place. But most PR people only measure traditional media like magazines, newspapers, radio, and TV, and this practice doesn’t capture the value of sharing.

This means it's time to forget about sales leads and ignore mainstream media. Instead, focus on spreading your ideas. Make your information totally free, with no registration required.

Here are some questions that can help you learn to measure the success of your content:

  1. How many people are getting exposed to your ideas?
  2. How many people are downloading your stuff?
  3. How often are bloggers writing about you and your ideas (And what are those bloggers saying?)
  4. Where are you appearing in search results for important phrases?
  5. How many people are engaging with you and choosing to speak to you about your offerings?

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Return On Investment Makes You Boring

Once you understand that the metrics of digital content are different from what marketers typically measure, you’ll need to think differently about ROI.

Again, I often get pushback on this idea from executives, who demand that their marketing ROI be measured in precise financial terms. It seems that business schools teach their students to obsess over measurement and insist that marketing results be treated in the same way you’d treat electricity use at company headquarters or revenue from the Canadian market.

These executives want to know exactly how much revenue each dollar spent on marketing is producing, and they want to see it in detailed campaign-by-campaign spreadsheets.

This trend is causing marketers to become too cautious and boring. Measuring ROI for everything means choosing techniques like direct mail programs, where you can measure exactly how many business reply cards are returned.

While that information is useful, lusting after it often prevents marketers from investing in efforts that could become viral content— solely because traditional measurement data are not available from those efforts.

For many executives, an obsession with ROI is just a convenient excuse to shy away from something new and untested. Yet that’s exactly what the best ideas for creating viral content are—new and untested.

Here’s the contradiction.

The same executives who insist on ROI measurements from marketing departments happily invest huge sums of money on other things whose returns are also incalculable from an ROI perspective, like the lobby of the building, the fresh coat of paint in the hallway, or even the accounting staff.

When CEOs and executives resort to ROI excuses, I ask, “What’s the return on investment of the army of landscapers who are constantly at work on the plantings around your corporate headquarters?” Usually, my question is met with embarrassment.

Take a chance. Make the assumption that if millions of people are sharing your ideas (that’s a number you can measure), then some percentage of them will buy your products.

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Make It Free

Search for the phrase “email marketing metrics” on Google and you’ll find nearly 400,000 hits plus dozens of paid advertisements.

This is a hot search phrase because people who want to manage an email marketing program for their organization—small business owners, consultants, people who work in marketing departments of large organizations, and nonprofit employees— often search for important email marketing benchmarks (things like click-through rates and the best days to begin campaigns).

With so many companies fighting over the high search positions for the phrase “email marketing metrics,” only one can be the top dog.

Meet MailerMailer (now known as Campaigner), the company that originally controlled the Number 1 position. MailerMailer sells an online tool that makes it easy to create, send, and track email campaigns. The tool is used by musicians, restaurants, software companies, event promoters, nonprofits, and other organizations. This small company is Number 1 because of its free Email Marketing Metrics Report.

Of course, it’s no surprise at all that the Number 1 spot for an important search term was garnered by a company that creates some very valuable information and offers it to anyone for free.

“We analyzed over 300 million opt-in email newsletters and campaigns sent by a sample of over 3,200 MailerMailer customers,” says Raj Khera, CEO of MailerMailer. “This free report reveals the most recent email marketing trends.”

For example, readers will discover which industries experienced the highest percentage of email opening rates and how frequently to send them to reach the most people. Chock-full of charts and graphs, the valuable data made available here for free would likely command a price of $10,000 (or more) if a consulting firm put it out.

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Twenty or One: Which Is Better?

The free Email Marketing Metrics Report has helped MailerMailer create viral content. “Our metrics are now quoted all over the Web, in places like eMarketer and Marketing Sherpa, and by ad agencies, companies, bloggers, reporters, analysts, and others who use it for data in their stories and reports,” Khera says. “We’ve seen over 500 blogs pointing to the data. There was a tremendous amount of industry recognition about the report.”

B2B Marketing

“When we opened it up and made the report available totally free, we found that twenty times the number of people downloaded it. Thousands of people were getting it...”

The Email Marketing Metrics Report was first released October 2004. “Initially we required registration to get the report [downloaders needed to supply an email address], and we got some initial interest, but not big numbers,” Khera says. “When we opened it up and made the report available totally free, we found that twenty times the number of people downloaded it. Thousands of people were getting it.”

Wow, stop and think about that.

Many companies put registration requirements on their most valuable information. But here is real evidence that, if you do, only a fraction of potential readers or viewers will request it.

As I mentioned earlier, other companies have cited to me that as few as one person in fifty will download something if personal information is required, compared to when the same information is offered totally free.

Clearly, having one of the most popular and most referenced sources of email marketing data is a huge marketing asset. When people read about email marketing metrics in a report from MailerMailer, they naturally consider purchasing MailerMailer products and services to help them with their email marketing programs.

Right in the report is a free trial offer for MailerMailer services. “We’re one of the top ten companies in the email marketing space,” says Khera. “The product promotes itself.”

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Are You Smoking Dope?

You may have noticed a fascinating parallel in the music industry.

For decades, selling music has been about exerting control over music copyright. Before the Web came along, it was fairly difficult to find illegal copies of music because you needed the physical record or tape. You had to either ask friends to make a copy or go to a dodgy part of town to find a cassette-tape or CD seller on a street corner.

When the Internet made possible the easy dissemination of music, the geniuses in the music industry clamped down in control mode—the only way they know how to market and sell.

They forced Naptser, a centralized music-sharing service that could have been a boon to the industry, to close. This closure forced illegal copying even further underground, where it is virtually impossible to monitor.

Today, many players in the industry patrol YouTube and other sites in order to say “no.” Instead of looking at the new medium of electronic information as an opportunity, they see it as a threat to the old way of selling. The music industry says: “Give away our music? No way! Are you smoking dope? Why would we do that?”

But if you step back and look at the ways musicians make money besides the recordings— concerts, endorsement deals, merchandise (such as $35 t-shirts), and “souvenir” packaging of the music (booklets included in a CD case, for example), not to mention royalties for the use of music in television, movies, and advertising—you start to suspect that clamping down with rigid controls may not be the best strategy.

Think about that: the music industry is trying to prevent the spread of their product!

If I were a music executive (or musician), I’d make much of my music available for free online, and I’d encourage people to share it. I would have the confidence that providing music for free would drive sales of my other products.

Many unsigned bands are prospering with this strategy through their Spotify channels or Web sites, and some are finding absolutely tremendous success.

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R.I.P. Sales Process

I want to turn our attention now to the issue of how organizations choose to embrace (or more likely resist) sharing ideas online.

The idea of customers and employees spreading “marketing messages” for an organization via blogs, forums, chat rooms, and other social media sites such as YouTube scares to death many marketers, corporate communications people, and company executives!

For decades, they’ve figured out ways to control their messaging, typically by clamming up and not saying much—except, that is, for a handful of authorized and highly trained spokespeople like the public relations director and the CEO.

Companies have used one-way communications, mostly advertising and press releases, to issue formal announcements and have generally forbidden rank-and-file employees from saying anything at all.

Before we go any further, let’s define the term “social media,” which most people have heard but which not everybody understands.

The term describes the way people share ideas, content, thoughts, and relationships online. Social media differ from so-called “mainstream media” in that anyone can create, comment on, and add to social media content. Social media can take the form of text, audio, video, images, and communities, and the technologies of social media include blogging software, podcast tools, wiki software, message boards, virtual communities, and networking tools.

As the tools of social media have enabled anybody (corporate insiders as well as customers and critics) to say anything about a company, many organizations have persisted in the old command-and-control methods of the past, enforcing rules and regulations that prohibit employees from communicating online. Just as bad, many organizations ignore what appears about their company on blogs, forums, and social media sites.

B2B Marketing

If we’re totally honest, we must know that we no longer control the sales process. Such a thing no longer even exists. Instead, our potential customers control what has become a buying process.

OK, let’s be honest.

Marketers and executives aren’t really scared of social media and the idea of viral content. They are scared of the unknown.

People are comfortable doing the same old rubbish year in and year out. They spend tons of money at tradeshows. They spam their customers with inane email campaigns that typically include “offers” such as free shipping or some sort of discount pricing. They invest in television commercials and yellow page ads. They pay PR agencies the big bucks to get a mention on page 60 of a local newspaper, a laundry-list inclusion in an analyst’s report, or a quote in the tenth paragraph of a story in a trade magazine that almost nobody reads. Then they say, “Woo hoo!” celebrating that they scored press “hits.”

Think about the last few products you purchased. Did you answer a direct mail ad? Go to a tradeshow to learn more? Turn to the yellow pages?

If you’re like most people, you didn’t do any of those things—you went online. So why are we marketing in the same old ways?

What works is creating information and entertainment ourselves and publishing it online— information that people want to share. And we should be encouraging our employees, customers, and other interested stakeholders to tell our stories and spread our ideas.

We should be celebrating blogs, forums, and the tools of social media, not clamping down on them.

If we’re totally honest, we must know that we no longer control the sales process. Such a thing no longer even exists. Instead, our potential customers control what has become a buying process.

We need to realize that today’s consumer skepticism means that to depend on million-dollar direct mail campaigns targeting the top sales prospects, big-budget advertisements that cast too wide a net, or message-driven PR campaigns directed at media insiders who reach fewer readers and viewers than they once did is to risk failure and irrelevancy.

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The HR and Legal Staff Don't Have The Answers Either

The real issue here is trust; the reasons company representatives give for not allowing people to participate in social media, like all that baloney about ROI, are just excuses.

Ultimately, human resources and legal departments are naïve and scared about what their corporate charges might do out in the wide world of the Web.

Since HR and legal people don’t usually understand social media themselves (and don’t use them for business in their jobs), they respond by just slapping on controls.

B2B Marketing

You can’t generate viral content if your employees are forbidden from accessing the sites to trigger one.

If you trust your employees, they might surprise you with the ways they promote your business on social media sites.

But if you don’t trust them, you end up with only the corporate dregs— workers who don’t mind submitting to an organization that won’t let them communicate the way people do today.

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It's All About The People

This debate about social media in the enterprise is just so damn silly. It seems crazy to me to try to regulate technology in the workplace when the real harm (or benefit!) comes from the people using that technology.

My recommendations to organizations are simple: Have guidelines about what you can and cannot do at work. Hold employees to a measurable standard for performance on the job. But don’t try to ban a specific set of social media technologies.

B2B Marketing

Rather than putting restrictions on social media (that is, the technology), it’s better to focus on guiding the way people behave.

Your guidelines should include advice about how to communicate in any medium, including face-to-face conversations, presentations at events, email, social media, online forums and chat rooms, and other forms of communication.

Rather than putting restrictions on social media (that is, the technology), it’s better to focus on guiding the way people behave. The corporate guidelines should inform employees that they can’t reveal company secrets, they can’t use inside information to trade stock or influence prices, and they must be transparent and provide their real name and affiliation when communicating.

As long as your employees get their work done in a satisfactory manner, there should be no need to regulate their minute-to-minute behavior.

You don’t regulate how often people can use the restroom, when they can chat with a colleague in the hallway about their kids, or whether they use a mobile phone for company calls while taking a cigarette break, so why regulate how they interact via social media?

If you have individual cases of people not getting their jobs done in a satisfactory manner, deal with that problem as the “people issue” it really is. If it persists after several warnings, fire the employee, but make sure your expectations were clear from the start.

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Social Computing Guidelines at IBM

Contrast the paranoid nanny-state organizations, which clamp down on their employees, with IBM, a company on the forefront of embracing employee use of social media.

IBM has developed a set of social computing guidelines for employee use of blogs, wikis, social networks, virtual worlds, and social media.

I think they are just fantastic. Here’s a taste:

“Whether or not an IBMer chooses to create or participate in a blog, wiki, online social network or any other form of online publishing or discussion is his or her own decision. However, emerging online collaboration platforms are fundamentally changing the way IBMers work and engage with each other, clients and partners. IBM is increasingly exploring how online discourse through social computing can empower IBMers as global professionals, innovators and citizens. These individual interactions represent a new model: not mass communications, but masses of communicators. Therefore, it is very much in IBM’s interest— and, we believe, in each IBMer’s own—to be aware of and participate in this sphere of information, interaction and idea exchange.”

This is the way of the future. My advice for bosses is to follow IBM’s pioneering example.

Get a group together and draft a set of social media guidelines for your company. Get them approved by the legal and communications departments, and then let all employees know about the guidelines to encourage social media participation.

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Stop Making Excuses

Excuses. I constantly hear excuses.

Marketing people have excuses for why they can’t create viral digital content. CEOs, company presidents, and other executives have excuses for why their particular product, service, or organization doesn’t have the potential to spread online. Authors and musicians offer excuses for why their books or music aren’t selling.

Often, the excuse comes to me like this: “But David, we’re a _______________. We can’t do that.”

You can fill in the blank with your organization’s excuse. I’ve already heard most of them: big company, small company, public company, venture-funded company, nonprofit, church, accountant, blood donation center, indie rock band, famous university, blah, blah, blah.

Sorry, but they’re all just excuses.

B2B Marketing

If you’re obsessed with ROI measurements that worked in an offline world, then you’re just making an excuse. If you worry about losing control of your message, then you’re making an excuse.

Another excuse I hear a lot these days comes from people pointing to polls and research reports that ask questions such as “Do you read blogs?” or “Do you use social media?” or “Do you go to video-sharing sites?” Often the data show rather small use compared to those who, say, use search engines or email.

This sort of data is misleading and dangerous to an organization’s overall marketing and PR efforts, dangerous enough that I’ve decided to close with this point.


Because these data are used by resistant executives to justify sticking exclusively to the methods that worked decades ago, like image advertising, direct mail, and the yellow pages.

I frequently hear CEOs, CFOs, and VPs of marketing say things like: “See, social media, blogs, and YouTube are not important, so we won’t do them here. They’re a waste of time.” Others say: “I don’t read blogs, so how important are they?”

These excuses miss 2 tremendously important points.

First, practically everyone uses Google and other search engines regularly, and the searches frequently return blog posts, YouTube videos, or other social media content high in the results.

So even though people may report “no” when asked if they use social media like blogs and video-sharing sites, nearly everyone has found this content via search.

Similarly, when people who are not regular users of social media ask their (non-social-media) networks for advice, they often do it via email.

Frequently the answers that come back include URLs to company and product pages. And those links from friends, colleagues, or family members often include blog posts and other social media content.

A mother may ask her friends a question like: “What’s the best baby stroller to buy?” The answer may include a link to a blog post or a site with an embedded video. Again, the person asking for advice probably didn’t even know she’d been sent to a blog or video-sharing site.

Many people who reach information via search don’t know what sort of “media” they’re enjoying! Don’t let your bosses diminish the hidden value of social media as search engine fodder and as valuable sources of information that people share with their networks.

A World Wide Rave—having others tell and spread your story for you—is one of the most exciting and powerful ways to reach your audiences. It’s not easy to harness that power, but any company with thoughtful ideas to share—and clever ways to create interest in them— can, after some careful preparation, become famous and find success on the Web.

The biggest requirement is that you change your behavior, so let me remind you of the most important strategies for successful marketing in a world of social media:

  • Stop obsessing over the old measurements of sales leads and marketing ROI.
  • Make your valuable online content free and registration-less.
  • Give away lots of good information (videos, photos, data, graphs, audio, blogs, e-books, and the like) to enthusiastic or curious people interested in your products and services.
  • Encourage an organizational culture of sharing

While this all seems simple enough, it’s practiced surprisingly rarely. But those who adopt these ideas usually win big.

Most importantly, you can only be successful if you lose control. Your challenge is to let go of your excuses and corporate inhibitions. Go out and create something interesting that people will be eager to share.

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