Everyone has a different idea about how to measure the financial return from a marketing investment. Many experts claims it’s an inexact exercise at best and the numbers tend to get particularly hazy for word-of-mouth campaigns. But academic researchers at Goethe-University in Frankfurt, Germany who recently completed a study say they’ve come up with a good way to measure how social capital becomes economic capital in a simple word of mouth (WOM) campaign.
Return on investment. In recessionary times, accurate measurement of ROI with respect to marketing dollars has become the holy grail. At its purest level, one part of the equation for return on investment regarding marketing expenditures can be measured by total sales. While not many people will debate the total revenue figure, there is plenty of disagreement about how to measure marketing costs. Should it include only media? Or should the figure be fully loaded with salaries and benefits that accrue to the marketing, public relations and customer service departments?