In Silicon Valley, a startup that has $5,000 in revenue from customers is typically worth less than the startup that has zero revenue. Likewise, a startup that has launched and has 2,000 users is worth less than the startup that hasn’t launched yet and has zero users.
The reason for that is simple. When there isn’t a basis for measuring a company, your mind can still imagine just how amazing that company can be. It’s the difference between meeting someone and saying, “Wow, I bet a ton of people will love using this thing you’re building” and “Huh, you’ve been live for three months and you only have 2,000 people using this?”
When you can start to measure something, you can start to put it in a box and assign a tangible value to it, even if its inaccurate. We like to be able to put things into context and measure them against other things we’ve seen or had experience with.
This is why I’ve come to this conclusion:
The best thing about digital marketing is that you can measure it.
The worst thing about digital marketing is that you can measure it.
Digital marketing still gets a pittance of the marketing budget at most companies. Social gets a fraction of that, and mobile gets an even smaller fraction. And why? Because marketers want the proof that they should move more budget to digital because they think it should be possible to tangibly show that proof. But its not.
What’s the difference between someone sitting on their couch and seeing a preview for a new movie on their TV and that same person scrolling down their Facebook wall and seeing a friend of theirs post how much they loved that same movie? Which do you think is more “valuable”? I think most people would agree that having your friend say that a movie is good or bad is far more influential to your decision of whether to go and see it than the commercial for it. Yet today, I’d guess that marketers spend 100x more on the TV spot than they do on their social strategy for movie premiers. And I might be undershooting that multiple.
Why does this happen? Because supposedly you can show the ROI with digital.
The fact that you can measure aspects of digital should only be a bonus for why you’d focus more attention and budget there. I’m as big a believer in the power of measuring and analyzing digital activity as anyone. We like to say its why we have a “U” in Engauge. But we shouldn’t let measurement be the reason we don’t do digital. That’s crazy.
Yesterday at the iStrategy conference, Engauge’s Executive Creative Director, Adam Albrecht, made the comment that “TV is the invitation to the party”. His point was, no longer is non-interactive media “the party”. It used to be. But now we have this area called digital where marketers can interact with, converse with, learn from, and influence their customers, and that is where the real party is.
Today, marketers spend 85% or more of their budgets and attention on the invitation…because they think they can’t prove the ROI of digital yet. And that is a shame.