… when you are talking about an outcome that is non-monetary.
Awareness of a cause is not a monetary outcome. Certainly you can save money on the promotion of the cause, but your end goal is awareness. It’s non-monetary. You either generated more awareness or you didn’t.
Election to office is a binary, non-monetary outcome. Either you won or you didn’t. The bribes you take in office might be a return on your investment, Congressman, but the outcome itself is non-monetary.
Subscribers to your email list is not a monetary outcome. The subscriber can have value downstream if you plan to monetize your list, but if your only goal is subscribers, then it’s a non-monetary outcome.
The only time that ROI applies is when your outcome involves dollar earnings and dollar expenditures.
(technically, for the math folks, you can have ROI without earnings if you are okay with -100% ROI, where you lose it all. 0 earned – x spent / x spent = -100% ROI)
You might also enjoy:
- Transformer les personnes, les processus et la technologie - Christopher S. Penn - Conférencier principal sur la science des données marketing
- How I Think About NFTs
- How to Measure the Marketing Impact of Public Speaking
- Marketing Data Science: Introduction to Data Blending
- Is Social Listening Useful?
Want to read more like this from Christopher Penn? Get updates here:
Get your copy of AI For Marketers
Thanks Christopher! Love that you point out that you can calculate ROI for anything so long as you’re comfortable in the red. Great post!
Good thoughts, I agree with the underlying premise of what you’re getting at. That said, the definition of a “return” doesn’t have to be monetary. The return you’re looking for could be awareness, subscribers, or an election…but it’s still a return, and there was still an investment of some sort to realize it.
Also would like to add…long time reader of your site and newsletter here. Always great stuff!
Good point, all too often ROI translates into a monetary equation. However the formula (e-s)/s = r applies to any action or effort and the quality/quantity of the benefit that accrues from it. The return or result is usually why the action or effort is conducted, and can be tangible, as is the case with money. More often “s” is effort, time, consideration, or care and the return is fulfillment that can only be measured subjectively. That is a wide gap, yet I believe that ROI can cover anything and everything in between.