Andrew Willshire tweeted:
“ROI is often used as the metric of choice as though you should seek to maximise it, whereas that would result in under-investment and misallocation of budget. Much better to optimise on incremental revenue, but that’s often overlooked.”

I replied “Yup, that’s the essence of efficiency vs effectiveness” and quoted How Not to Plan: 66 Ways to Screw Up by Les Binet and Sarah Carter: “As you spend more on advertising, it often gets more effective (sales and profits generated go up), but less efficient (ROI goes down)… ROI…is a measure of efficiency, not effectiveness.”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s