Measuring ROI

Generally, the more intangible benefits that can be achieved using online audio and video, such as "Increase Frequency of Communications" or "Improve Consumer Experience," are cited by less than one-tenth of the audience as the most important factor to be considered in gauging the effectiveness of a Web-based communications event.

Survey Says...
A much different outlook on Webcasting ROI emerges, however, when the question is crafted in a slightly different way. Other questions posed to the same respondents in the same survey focused on what companies emphasize when they measure the ROI of deploying applications for specific purposes, such as employee training, executive presentations, and sales and marketing events.

As it turns out, when individuals more precisely define the way they use Web communications, the metrics they most frequently cite for measuring its benefits become less tangible. The issue of "reduced costs" simply begins to take a back seat when executives turn their attention to the payoff that should be associated with uses of the technology that are linked with specific communications objectives.

For both executive presentations and employee training, for instance, "increased productivity" is most frequently cited as the top factor used in measuring the return on investment from spending on Web communications technology. For sales and marketing-oriented applications, the key factor cited for ROI evaluation is "increased revenue." In each case, the issue of "reduced costs" ranked as either the second or third most frequently cited topic when the question of evaluating the effectiveness of the technology is linked to a specific, defined use for Web communications.

Deciphering the issue of communications, indeed, could emerge as a "Rosetta Stone" for unleashing new demand for Webcasting tools and services among those companies that, so far, have illustrated only lukewarm interest in the technology.

The biggest difference between those deploying Webcasting and those not exposed to the technology is their perception of the Internet as a viable tool for multimedia-enriched communications. Among those actually authorizing the deployment of Webcasts, the survey results show a significantly greater tendency to grade Web-based applications based on the communications objectives they help users achieve.

Of those respondents at companies that have deployed Webcasts, 20% said that the primary factor used in ROI analysis for online executive presentations is "Improved Understanding of Business Strategy." This is a factor more closely associated with the intangible benefits of improved communications within an organization than an identifiable boost to a company’s financial bottom line. Among survey respondents working at companies that have not deployed Webcasting, only 11% said that "Improved Understanding of Business Strategy" should be the primary factor in evaluating ROI from an online executive presentation.

Similar results emerge for another factor related to improved communications within an organization. Fourteen percent of those deploying a Webcast say the primary ROI factor for online executive presentations should be "More Frequent Internal Communications." Only 7% of those working at firms that have not deployed Webcasting cited this as the primary ROI factor for grading online executive presentations.

One of the ROI factors that changed most dramatically in these survey results was "reduced costs." Among executives working at companies not deploying Webcasts, "reduced costs" was the third most frequently cited factor for gauging the ROI of online executive presentations. Among those who actually deployed the technology, the factor of "reduced costs" ranked dead last in citations as a primary factor for gauging ROI from online executive presentations.

Telephone Line
It’s no easy task to transform users’ notions of a costly technology platform into a new outlook that views the technology as a viable, communications-oriented solution. But it can be done. Take the case of pre-divestiture Ma Bell and its promotion of long-distance telephone service.

For decades, AT&T priced long-distance telephone service at premium rates, and those fees shaped the image of long-distance as service only to be used in dire emergencies. Witness how characters in Hollywood movies made in the 1940s and 1950s often rush to the phone to take a call placed from across the country.

By the 1970s, however, AT&T had begun restructuring long-distance fees to more reasonable levels and launched promotional advertising encouraging people to "reach out and touch someone." Essentially, Ma Bell shifted consumers’ focus from the costs of long-distance to its ability to help individuals achieve their own personal communications objectives. In short, they re-crafted the value proposition. Who cares about the cost if you get the chance to talk to family and friends?

As long-distance service prices have tumbled in the past decade in particular, its use has become a non-issue in most organizations. You won’t catch a lot of companies contemplating the "ROI of Long Distance." Now, it’s just part of the basic infrastructure that companies make commonly available in order to make their employees more effective.