Running a Firm
Internet ROI: What Plus What Equals What? E-mail
Written by Bob Scott   
Thursday, 05 November 2009 04:08

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Joe RotellaMany have discussed return on investment for Web sites. Joe Rotella, chief technology officer of Delphia Consulting, put together a series of measurements designed to make financial sense out of Web performance. However, ”Is Your Web presence Working 10 Ways to Measure Your Web ROI,” presented at last month's CCH User Conference, he cautioned repeatedly that “your mileage may vary.”

 

Rotella defined his subject as Internet presence, which includes Web sites, email and social media. And he commented that he found that most previous articles about Internet ROI have “no meat to the bone. I decided. ‘I’m not going to do that.’”

The measurements stemmed from length discussions with two accounting firm market people , who gave estimates about the value of various elements of their Web presence, estimates that were often highly divergent. Rotella, who said ROI goes beyond financial return, also defined what he saw as attributes of good sites. That includes self-service and sites that answer users’ questions.  Ge noted the difference in measuring the hard costs of building and maintaining sites along with the soft costs, such as internal labor. But costs are not the problem. Calculating value also involves determining which goals the most important and “what success looks like.”

The calculations came from discussions with Katie Tolin, marketing director, Rea & Associates of New Philadelphia, Ohio, and Eric Majchrzak, marketing manager, of Freed Maxick & Battaglia of Buffalo, N.Y.

The calculations started with valuing hits, which the three placed at $2 to $3 each. They valued the ability of Internet services to introduce a company to prospects at $25 to $250 each, for example a monthly value of $875 “to get a new body in their building in front of a presenter.” Conversion of prospects was calculated in terms of a 5 percent to 10 percent rates of converting prospects. Rotella’s formulas also put a value on project profitability, which he said can be touch to judge. Client retention was also put into the formula as was the ability to cross sell prospects. Rotella also put the value of talent acquisition and talent retention into the mix. Besides putting a measurement on it, along with such questions as “How many employees are likely to bolt from a firm? How important the Web is to the employee?" Rotella factored in those questions. The value of media mentions were also taken into account.

What Rotella ended up with in factor the value of each unit and applying those to the number of hits or exposures, or other measurements. The final value that Rotella derived from all this was more than $400,000. Both participants said their Web sites couldn’t be worth that much.  Rotella took the measurements further and factored in costs and estimated the return over two years. He found the return at 117 percent in the first year and 272 percent in two years.

 


Bob Scott
About the author:
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  
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