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Uniform blog/A Fresh Look at Martech ROI: The Opportunity-Cost Perspective
A Fresh Look at Martech ROI: The Opportunity-Cost Perspective
A Fresh Look at Martech ROI: The Opportunity-Cost Perspective
Insights from Gene De Libero, Principal Consultant of Digital Mindshare LLC, presented at Digital Experience Assembly (DXA) 2025
Why Traditional ROI Models Fall Short
At Digital Experience Assembly (DXA) 2025, digital strategy expert Gene De Libero, founder of martech strategy consultancy Digital Mindshare and advisor to enterprise CMOs on marketing technology investments, observed that "economic pressures have buyers demanding measurable ROI."
This insight from one of marketing technology's leading voices highlighted a critical challenge facing today's marketing leaders. The standard ROI formula, which divides returns by investment, works well for straightforward financial decisions but often fails when applied to complex marketing technology.
The problem isn't the formula itself but how we define "returns." Most approaches narrowly focus on directly attributable revenue while ignoring significant value sources. This exploration proposes a more holistic view that considers what economists call opportunity costs: the value of what you miss by not investing.
A Simpler Way to Think About Martech Value
Instead of getting lost in attribution models, consider four fundamental ways marketing technology creates value:
- New Possibilities: What can you do with this previously impossible technology?
- Speed Advantages: How much faster can you execute marketing initiatives?
- Risk Reduction: What potential problems does this technology help you avoid?
- Growth Support: How does this technology help you scale without adding proportional resources?
When balanced against the actual costs, these elements provide a more complete picture of technology's value.
Uncovering Hidden Value
New Possibilities
The most significant value from marketing technology often comes from enabling entirely new capabilities. For example, a customer data platform might allow you to create segments that were previously impossible, leading to more relevant communications and better customer experiences.
To quantify this value, ask yourself: "If we had this capability last year, what additional revenue or cost savings would we have generated?" For instance, if better targeting had improved campaign performance by 15% on campaigns that generated $1 million, that's a $150,000 value from this new capability.
Speed Advantages
Time-to-market creates enormous value that traditional ROI models rarely capture. When a competitor launches a campaign in two days while yours takes two weeks, you lose twelve days of potential market impact.
To understand this value, consider: "How much sooner could we launch campaigns or respond to market changes with this technology?" Then estimate the value of that time saved. Launching four weeks earlier and typically generating $100,000 per week from a major campaign is $400,000 in accelerated value.
Speed is a strategic advantage as well as an efficiency gain.
Risk Reduction
Marketing technology can substantially reduce organizational risks, from compliance violations to security breaches to market disruptions. This risk reduction has real financial value and should be factored into investment decisions.
Ask: "What costly problems might this technology help us avoid?" Then estimate the likelihood and potential cost of those problems. Suppose a content management system with built-in compliance features reduces your exposure to regulatory issues that historically cost your industry an average of $500,000 per incident, with a 20% annual occurrence probability. In this case, that's a $100,000 annual risk reduction value.
Prevention has quantifiable value, not just theoretical benefits.
Growth Support
Technology that supports scaling without proportional resource increases offers tremendous value as your business grows. This scalability factor rarely appears in traditional ROI calculations despite its significance.
Consider: "Without this technology, what additional resources would we need to support our expected growth?" If you anticipate 30% business growth, typically requiring three additional marketing team members at $100,000 each, that's $300,000 in avoided costs.
Future-proofing has present value worth including in investment decisions.
A More Accurate Cost Assessment
Just as traditional models undervalue returns, they often oversimplify costs as well. A complete assessment includes:
Direct Costs: Beyond just the price tag on subscription fees, you'll need to account for implementation services and the inevitable training expenses that follow any new tech adoption.
Integration Costs: Connecting new solutions with your existing tech stack often costs more than expected, both in initial development resources and the ongoing maintenance that keeps everything talking to each other smoothly.
Organizational Costs: Perhaps the most overlooked aspect is how new technology ripples through your teams. From productivity dips during the learning phase to the sometimes painful process of redesigning workflows, these human factors can make or break your ROI.
Being upfront about this complete cost picture helps you avoid those midnight budget conversations and sets more realistic expectations from the start.
Uncovering True Value
Start by bringing your marketing teams, tech leads, and business unit heads together in the same room. Have them map out tangible ways your new technology will drive value, whether through faster customer response times or unlocking new revenue streams. The magic happens when different perspectives collide around specific examples that matter to your business.
Don't fall into the trap of pinpoint forecasting when estimating benefits. The most seasoned transformation leaders work in ballpark ranges that embrace uncertainty. Your executive team doesn't need decimal-point precision—they need to understand whether you're talking about a million-dollar opportunity or a ten-million-dollar one, with a clear view of what might shift those numbers in either direction.
On the cost side, go beyond the obvious. Your finance team might track the license fees, but your operations people know where the hidden costs lurk—from systems integration to productivity dips during adoption. Making these visible upfront prevents the "approved but doomed" syndrome many initiatives suffer from.
You can calculate net impact with a complete picture of both value and costs. But don't stop there—identify which assumptions would dramatically change your outcome if they proved wrong. These critical few deserve extra scrutiny before you commit resources.
A Real-World Example
To illustrate this approach, consider a mid-sized retail company evaluating a new customer data platform:
New Possibilities: The CDP would enable cross-channel personalization previously impossible with their siloed systems. Based on industry benchmarks and limited tests, they estimate a 10-20% conversion improvement on campaigns representing $2 million in annual revenue, a value range of $200,000-$400,000.
Speed Advantages: The platform would reduce campaign deployment time from 3 weeks to 1 week. With 15 major campaigns annually and each week of market presence worth approximately $30,000, this acceleration represents $450,000 in time-to-market value.
Risk Reduction: Their current manual data handling processes create regulatory compliance risks and occasional customer data errors. Industry data suggests similar companies face incidents costing $250,000 on average every 2-3 years—value: $100,000 annually in reduced risk exposure.
Growth Support: The company projects 40% growth over two years. Without automation, this would require three additional marketing specialists at $90,000 each. The platform prevents this need, providing $270,000 in scale value.
Costs:
- Direct: $180,000 annual subscription plus $150,000 implementation (amortized over three years) = $230,000 first-year cost
- Integration: $100,000 development plus $30,000 annual maintenance = $130,000 first-year cost
- Organizational: Two months of 25% productivity reduction for a 6-person team plus training = $60,000 one-time cost
Net Value: Total Value: $1,020,000-$1,220,000 Total First-Year Cost: $420,000 Net First-Year Value: $600,000-$800,000
This analysis provides a more complete picture than a traditional ROI model that might focus solely on attributed campaign revenue improvements.
Start Simple, Then Refine
This opportunity-cost perspective doesn't require mathematical sophistication or economic expertise. Start with the value categories that matter most to your organization, use reasonable estimates based on your experience, and refine your approach over time.
The goal isn't perfect precision but better decision-making through a more complete understanding of value. By considering what you gain and avoid losing, you'll make more informed technology investments and communicate their value more effectively to stakeholders.
Remember what Gene De Libero emphasized: senior executives don't want to make bad technology decisions. This approach helps ensure they don't—by illuminating the complete value picture rather than just a narrow slice of directly attributable returns.
Applying this perspective will give you a more nuanced understanding of how technology creates value for your organization, ultimately leading to better investment decisions and stronger financial results.
Watch Gene’s presentation here.
