ROI measures efficiency not effectiveness

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.” Continue reading “ROI measures efficiency not effectiveness”

Chasing high ROIs can mean running your business into the ground

Jerry Daykin started a Twitter thread:  «ROI is a terribly misunderstood thing in media/advertising. Chasing high ROIs can mean running your business into the ground/minimising growth, and in fact a high ROI is often a sign you are underinvesting in a channel. ROIs aren’t static, they shift as your budgets do. »
Continue reading “Chasing high ROIs can mean running your business into the ground”

Even the simplest metrics require forensic analysis

Helen Edwards wrote a MarketingWeek article titled Even the simplest metrics require forensic analysis.

« You can have a bunch of metrics, each accurately assessing a single facet, but…  as essayist Nassim Taleb observes, in complex systems it is the interactions that really count, with the result that “the ensemble behaves in ways not predicted by its components.” » Continue reading “Even the simplest metrics require forensic analysis”