The 2008 election ROI paradox and drumming gorillas

At the IDG conference in Seoul last month I had the pleasure to meet Bruce Haines of Cheil Worldwide, a British expatriate living in Seoul. Bruce is one of the smartest marketers that I've met in a long time. During his keynote, Bruce cautions marketers against trying to assess ROI in a vacuum devoid of the brand. As with any number, ROI figures can lie and can be easily manipulated.

Bruce cautions marketers against trying to assess ROI in a vacuum devoid of the brand.

The 2008 Election

Bruce used the example of the US election to prove the point. This was an example that that made a lot of the people in the room sit up and take notice. I wanted to dive into it a little deeper to show the point and open a discussion around ROI. It's something I've written about before, but this is an ongoing conversation, so let's look at the numbers.

Here is a breakdown of the actual election spending numbers. The dollar figures are the reported spending amounts from the Federal Election Commission. Final votes are from CNN.com.

Looking at the return (votes) on investment (dollars spent) McCain is clearly in the lead. He ended up spending approximately $3.50 less for each vote.

That, however, does not tell the whole story as we all know. The real return that matters is the brand that was built and ultimately winning presidency. Looking at the wrong checkpoints on the way to a goal can lead us astray.

Drumming Gorillas

Another example Bruce used to hammer the intangible value of branding is the Cadbury drumming gorilla ad. Here is the clip if you don't know what I am talking about.

If you look at the overall success of the campaign from a purely fiduciary standpoint, you could say it was not very successful. This article originally from Grocer Magazine shows that Cadbury's market share actually dropped to around 1%. Again it depends on what you're measuring. If you expect ad spending to increase market share, this would not have been a success. Factors that you don't see include increases in raw materials costs and consumers price increases.

The issue for us here today is how to measure cool.

What is not measured is that Cadbury is now seen as a "cool" brand according to Bruce. He mentioned that if you'd told him a year ago that Cadbury chocolate would be seen as cool he would have laughed. The issue for us here today is how to measure cool.

So here are some discussion starters, to bring this back to marketing:

• What % of your ROI metrics are custom to your business? What % are "industry standard"?
  
• As ROI is necessary to prove marketing value to higher ups, how do you deal with it?
  
• How do you define the right metrics to make sure you're spending the optimal amount of money executing the right strategies?
  
• How do you measure intangibles like "cool"?
  
• Similarly, brand is nearly impossible to measure, yet extremely valuable. How are you attempting to measure brand value?
  

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Comments

[Ged Carroll]

Interesting posting Matt, you're quite right. The interesting thing about the Cadbury Gorilla campaign in the UK is that market share figures change depending who you speak to (market growth over the year, versus negative growth over the initial period of time).

The campaign also helped them bridge a number of reputational issues (contaminated product etc) and set the brand clock back to zero.

[Matt Dickman]

Thanks for the comment Ged. I think what you said goes directly to my point. Numbers can be manipulated. My angle here was to show it worked, but in a non-financial way. I am 100% sure you could find numbers that show it a financial success given the environmental factors that existed.

I think it's about finding the metrics that show your business its true path toward success.

[Ron Larimer]

Other ways to look at this information from a business perspective include:

Obama may have spent $32.79 for each vote in excess McCain's. That may be acceptable cost per action if you are selling cars or houses, but spending 6x for each purchase may not be worth it more typical products.

Additionally, the election is a winner take all game (Similar to the $20 auction) AND there is no incentive to not spend every dollar raised on the candidates own race.

This is not analogous to a business driven project.

[Alan Wolk]

Really great post Matt. Makes a really important point about how not all ROI is measured on a spread sheet.

Did Bruce have anything other than his own anecdotal belief that Cadbury was now "cool" to back that up?

I find that even a quick poll type but of research helps sell those intangibles to numbers-oriented clients.

[Matt Dickman]

Ron -- Long time, no see. Hope all is well with you and thanks for the comment. You're right about the winner take all nature being unique, however I think the budgeting is very similar to how most companies operate. Spending the entire budget each year is imperative to gaining increases year-over-year. Making wise decisions based on an informed ROI model is key in business, not so much in elections.

[Matt Dickman]

Alan -- Bruce didn't have backup proof. The notion of "cool" was his impression of the brand on a personal level. That was also his point on the difficulty of measuring anecdotal beliefs. I think your idea of using a quick poll or other measurement tool can help to gauge change over time.

[Paul]

Matt - Another great insight! Thanks for posting this it made a huge impact in our discussion at work yesterday. Much appreciated.

[Matt Dickman]

Paul -- Now that's what I like to hear! Glad you liked it.

[Yianni Garcia]

The questions you raised about ROI are particularly relevant with social media marketing strategies that focus on building relationships and communities, hence delivering gradual results in the long term.

[Matt Dickman]

Thanks Yianni. Any questions that you think have not been asked? Anything you would like to see/learn?