A lesson from Milton Friedman on different kinds of money. When it’s not your money, who cares about dreary old ROI?
The late Milton Friedman had it down pat in a 2004 interview with Fox News:
There are four ways to spend money. You can spend your own money on yourself. When you do that, why you really watch out for what you’re doing, and you try to get the most for your money.
Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well then, I’m not so careful about the content of the present, but I’m very careful about the cost.
Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m going to have a good lunch!
Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it costs, and I’m not concerned about what I get.
And that’s government. And that’s close to 40 percent of our national income.
Yesterday I copied a great post by my old mucker Malcolm Auld. Today he sent me some choice quotes from corporate Digi-Morons:
Coca-Cola says it can find no correlation between “buzz” on Twitter and actual unit sales. Auto manufacturer Nissan admits it has no idea if social media helps it shift cars. MasterCard can’t tie its social investment to revenues. In fact, there remains little evidence social media does anything to boost brands’ bottom lines.
You’d think that would mean a crisis. That’s not the case.
“We don’t think about the ROI of social; we think about the cost of ignoring it,” said Nissan’s director of digital marketing, Erich Marx. “I’m not dismissing ROI – because it’s always important — but we’re not about to cut back or dismiss social media because we can’t define it,” he added.
Adam Broitman, MasterCard’s vp of global digital marketing, held a similar view. His company can’t draw a correlation between its social efforts and business metrics like sign-ups, but it doesn’t need to.
“At this point, I think of social media like air. We have no choice but to breathe it.”
The last bit is the most stupid thing I have read in yonks.
None of these smug buffoons is risking his own money on his own business.
If you, like me, do, then perhaps you can spare a little to get a lot more.
