It’s Time to Consider A Better Metric: Investment on Return
Recently I read Umair Haque’s e-book, Betterness, and was deeply affected by the themes and insights discussed within. It was heartening to read as his cri du coeur more eloquently and powerfully articulated sentiments I have been feeling recently.
The book is a call to arms and manifesto for a paradigm shift in the way business, and society as a whole, values and defines wealth. The underlying premise is that by focusing almost exclusively on a financially-driven definition of wealth, we have not only forsaken a more holistic approach to the matter, but have not done a particularly good job of even achieving the financial definition outside of those that are part of the now famous 1%.
I work in the advertising industry, so it’s quite easy for anyone reading this to ask if, before adding my rousing “here, here!” to Haque’s criticism, I have looked in a mirror lately. Indeed, we Madison Avenue-types are the very engine of the more, bigger, faster, cheaper, now society that Haque decries. I get that. But I say the following not to assuage my own feelings of guilt, but to put forth the notion with an attempt to foment conversation around the following:
How can we develop ideas that are measured not by the three dreaded letters: ROI, but rather by the inverse – IOR: Investment on Return?
What do I mean by Investment on Return?
First, let’s define the term ‘return.’ I don’t mean product sales, gross or net profits or even social media-influenced terms such as ‘follows’ or ‘likes.’ Ultimately all those things are the results of actions taken by people. Not consumers or target audiences or demographics, but people. The goodwill and patronage of people is the return on investment that brands seek to attract.
So, what sort of investment are brands making on this ‘return?’ On people? Let’s again get clear on what we are talking about, this time pausing to reflect on what we mean by ‘investment.’
Traditionally, brands have viewed returns purely in the financial sense, and so view investment similarly. “How much money are we spending and how much are we making in return?” is the traditional viewpoint of ROI. But if now we decide to view return as equaling people, we need to view investment as something more than money as well.
Investment could mean all sorts of outlay once you step back from the myopic prism of the purely financial. It could mean emotional investment, educational investment, informational investment, social investment, community investment, time investment, political investment, advocacy investment, environmental investment –and the list could be endless if you think about it.
You get the idea, though.
Do some of those things require a financial outlay?
Yes, but that is secondary to the deeper human investment these other forms carry.
You may point to the charitable and philanthropic work that many companies do – and those certainly have meaning. But I think there is a difference between donating $1 from every sale to a worthwhile cause, or selling your product in the color that represents support for a specific disease research – both of which are good things – and thinking about how you are investing in the very people that make your company a success.
How many companies measure that as they do ROI?
So, what role does the agency play in this?
We don’t make the products people buy, but we do play a significant role in the way people perceive brands. And now we must ask ourselves, in the current era in which we live, how much longer will simply touting the more, bigger, faster, cheaper, now approach be tolerated by people? How much longer will they be satisfied with nothing more than that from the companies to which they are giving their money?
If you believe, as Haque does, and as I do, that that time is nearing an end, then you must ask yourself the following question: How am I helping to position my client to succeed in the future? Not in a ‘how can we fudge this,’ ‘how can we merely change the perception,’ ‘how can we fool folks for another couple of years,’ sort of way, but in a way that truly shapes the very business of our clients? In a way that doesn’t just hype the notion of whiter teeth, fresher laundry and shinier floors, but in a way that clearly states that the brand is based on the fundamental premise that making an investment on the return is a critical pillar of their business.
The truth is, brands that live by the Betterness ethic know that being committed to people and making a profit are not mutually exclusive. Companies as diverse as Stonyfield Farms, Interface Carpets and TOMS shoes have all found ways to make compelling products that consumers want to buy, while also making a positive impact on the lives of dairy farmers, managing a gentler carbon footprint and providing footwear to impoverished children, respectively.
This sort of approach should be a boon for agencies as well as powerful stories can be built on such foundations. The ad industry need only look to the 2012 Cannes Lion Grand Prix-winning effort from Chipotle to see how rich this territory can be.
As is regularly pointed out, ours is a world in which the individual increasingly has greater voice and the collective public have shown a willingness and ability to publicly punish those brands who do harm. So why couldn’t a brand start an initiative like Apps to Empower?
It would (and will) be the wise company that invested (and invests) in the idea of IOR.
- by AWSC
- posted at 9:00 am
- January 7, 2013