What does... "ROMI" actually mean?

Romi? That's neither the name of the new agency dog nor the new intern. No, it's an acronym that currently enjoys almost as much attention as the two mentioned above, but spreads far less joy. The first time they heard it, the agency representatives at the client meeting probably actually thought they were talking about a person who was new to the marketing team. The second time, they may have understood ROI and wondered what that was all about: Return on investment was previously only something that bankers, investors or financiers talked about, but not their client's marketing people? But the third time they realized - thanks to live googling - that it was serious. After all, the M in ROMI stands for marketing, so it had to have something to do with them.

Make everything provable

So now ROMI is making the blood run cold in the veins of many an agency and customer. Suddenly, calculation is the order of the day! With the Return on Marketing Investments the factor that determines how much is left over for the cause - i.e. the profit - after deducting all marketing expenses. And by deducting all expenditure, we mean EVERYTHING. That means everything that is remotely related to marketing: Development, consulting, agency and production costs as well as all media spendings (incl. Google) and - not to forget - catering and travel expenses of the agencies. That adds up to quite a sum. This is now deducted from the income that was hopefully generated for the company through such measures. The result of this subtraction is then divided by the sum. The result of this division is then the ROMI. Simple, isn't it? It is 5.5 in very good cases or just 1.0 or even less in bad cases. This means that the company has received back a factor of 5.50 or just a factor of 1 for every marketing franc invested. "But you can't calculate like that" or "Marketing expenditure is not a cost, it's an investment" are the exasperated exclamations of the agency representatives before they get into their fat cars in the visitor's parking lot under the suspicious eyes of their clients and drive off in resignation. Instead of memorizing the formula, both sides complain afterwards. Not only about rising fuel and electricity prices, but also about the fact that advertising measures are now subject to ever stricter controls.

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* Benno Maggi is co-founder and CEO of Partner & Partner. He has been eavesdropping on the industry for over 30 years, discovering words and terms for us that can either be used for small talk, pomposity, excitement, playing Scrabble, or just because.