In today's economic climate, Return on Investment (ROI) is more important than ever.  Companies are running so lean that every penny is being examined to determine just how much it is contributing to the bottom line - and that is just as it should be.

So it naturally follows that when a company is evaluating a local marketing solution they should be heavily focused on ROI.  

At Balihoo we think that there are several factors that contribute to the overall value of a local marketing program, and all need to be considered when calculating ROI:

1. Reduction in local production costs - This is the value that is most attributable to Ad Builders that allow a local affiliate to customize an ad template without the use of a creative resource.  By leveraging these tools affiliates can reduce their local production costs by up to 90%.
2. Increase in brand integrity - This is the secondary benefit of a good Ad Builder.  Because ads are templated and the customizations can be designed to be in compliance with brand guidelines, the brand can rest assured that their investment into developing their brand is not degraded through rogue local implementations.
3. Reduction in local execution costs - If the LMA solution allows for execution across all media types, the brand can leverage their scale to greatly reduce execution costs across different media.  The economies of scale reach across transactional mediums such as direct mail, e-mail, SMS, Newspaper Circulars all the way to negotiated traditional media costs on a local level.  If the LMA solution selected does not offer full execution across all media types, this element of the calculation can be eliminated.
4. Improved local marketing execution - A great LMA solution will help to guide the users through a combination of training, professional assistance and in application education to become a better local marketer.  While the first couple benefits of the ROI calculation are great opportunities to reduce costs or negative impact on branding, this element can have the biggest impact on a local marketer's business.  So much of marketing today is waste, and the marketing landscape keeps getting more confusing, which is adding to the waste.  If your LMA platform can help to remove some of the confusion, and direct your affiliates to more effective marketing techniques, the impact on ROI can be dramatic.
5. Affiliate adoption - The final component of the ROI calculation is determining affiliate adoption.  All of the factors listed above are dramatically impacted by how many of the local affiliates take advantage of the opportunities afforded to them through the LMA platform.  You can create the best program in the world, but if the program is not adopted, then it will have almost no impact on your business and will certainly not deliver ROI.  This is typically the largest missing piece of any LMA effort.  In order to drive adoption the brand must invest in training, useful templates, strong co-op programs, and education.  

By building a model with these factors, it is fairly simple to construct a well-defined and easily understandable ROI model for your LMA program.  If you are interested in some sample ROI calculators and the methodology behind them, please comment on this post and I would be happy to provide you with the information.