So far, the last quarter of 2022 and the beginning of 2023 have not been kind to the global economy. The ripple effect is evident everywhere. Marketers face budget cuts and pressure to prove the value of their investment in marketing technology. Marketing heads must carefully assess and align the solutions they invest in with the organizational goals to maintain their credibility as technology decision-makers and buyers.
Proving the return on investment (ROI) of a digital asset management (DAM) solution can be challenging because business leaders do not see how solving the problems of managing creative assets can impact revenue. But ask any developer or designer, and they will vouch for how easy work has been with a DAM. Does DAM’s ‘ease-to-work’ value make it a wise investment? How do we measure its worthiness?
ROI is the net gain you make from an investment as a percentage of the cost of the investment. A back-of-the-envelope ROI calculation for DAM is the time and cost saved in managing a creative asset. It optimizes the expense of storing, managing, editing, retrieving, and distributing assets.
Considering how modern organizations depend massively on creative assets for the success of their digital businesses, DAM can help manage these assets productively in several ways throughout their lifecycle, thereby indirectly saving costs and boosting the bottom line.
What ROI does a DAM system deliver?
The lifecycle of a digital asset involves several stages, from conception to archival, with a complex creative workflow requiring coordination between multiple stakeholders. DAM can streamline this workflow, making it easier to track and manage assets creating efficiencies at every stage that incrementally add up to considerable savings when the system handles many assets.
Let’s look at the different ways in which DAM contributes to the bottom line:
Eliminates inefficiencies by streamlining the workflow
Acting as a single source of truth, DAM reduces collaboration time. System integration with other Martech brings transparency, removes duplication, and reduces resource wastage. Automation diminishes manual effort and raises alerts and notifications supporting uninterrupted work.
Metrics to consider: The annual cost of your current workflow before and after DAM to find how much you are saving.
You start by calculating the time it takes to complete each process and multiplying it by the employee wages involved at every workflow stage.
For illustration, consider three stages in a process, where a designer, a brand manager, and a marketer spend a couple of hours respectively in each stage. We would then need to add the respective employee cost for the number of hours to arrive at the cost for each task.
The formula for annual calculations would look like this:
Once you bring in DAM, the variables of time and employees involved would reduce. We also need to consider the cost of the solution, its implementation, and training charges.
ROI of optimized workflow = Annual savings /Cost of automation *100
Where annual savings = Manual annual cost – Automated annual cost
Saves employee time and protects assets
Real-time updates, intelligent tagging, and custom metadata ensure images are easy to find and are up-to-date. DAM prevents unauthorized access or usage of creatives, protecting them in storage and transit and preventing financial/reputational damage arising from the loss of assets. Bulk processing reduces the strain on bandwidth and storage.
Metrics to consider: The cost of time saved when searching for assets or processing them and the reduction in loss of assets (due to corruption, theft, misuse, or devaluation)
Here is a simple case:
|Time spent on total search (hours/week)||Employee cost (in $) (Average hourly pay)||Total search cost (in $)(Per 48 work weeks)|
|Before DAM||5 hours||40$||54840=9,600|
|After DAM||1.25 hours||40$||1.254840=2,400|
ROI of search time saved = Cost of search time saved /Cost of assets *100
ROI of reduced loss of assets = (Historical asset loss – Actual asset loss post DAM implementation)/Cost of assets *100
Increased revenue from better use and reuse of assets
DAM provides metrics on the usage of assets helping organizations identify assets that aren’t performing well, thus saving them money, time, and processing power. Duplicates don’t exist in DAM. Version control and auto asset transformation and optimization tools deliver the perfect image at speed to meet the demands of the job.
Metrics to consider: Asset usage and cost savings between repurposing an asset versus creating a new one.
For example, a new image could cost $100, but repurposing an existing one may need only $75. Another way to look at it is to use the same image for five different purposes by repurposing it for each use case. Compare the revenue (sales, subscriptions, maintenance) from each use versus the expense incurred on the image.
ROI of reusing asset = Benefit – Cost of Asset/Cost of Assets *100
Improved customer engagement and satisfaction
Digital assets are critical to a customer’s buying journey as they create the potential for engagement and lead generation. The distribution of high-quality, relevant, and suitable images just in time can drive customer engagement and retention.
Metrics to consider: The number of times an asset has been downloaded, shared, and distributed by customers, sales teams, and even agencies and other external parties.
ROI of customer engagement and satisfaction = Image usage rate / Cost of Asset *100
Minimal investment in hardware and software
Cloud DAM offered as a SaaS product is an affordable, scalable, and agile option for businesses to get access to unlimited storage, powerful automation, and robust security features without investing in hardware or software or spending time and other resources on its implementation.
Metrics to consider:
- SaaS pricing based on the number of users, features, assets, and other factors that influence the pricing model
- Cost of existing on-premise asset management system that includes the cost of storage, search, file transfer, number of staff needed for technical maintenance and support, and other factors.
ROI of Cloud-based DAM = Savings / Investment cost of a SaaS/Cloud solution *100
*Where savings is the difference between the cost of managing digital assets with and without a cloud-based DAM
Best Practices for Maximizing DAM ROI
Companies must consider maximizing ROI even before they start evaluating different DAM vendors. Users can adopt the following best practices before, during, and after DAM implementation to ensure they make the most of their investment:
- Define clear goals and objectives for DAM
Once you decide to invest in DAM, you must first study the kind of assets you own and process and arrive at a clean inventory to get a sense of the volume and the types of content a DAM system needs to handle. This exercise will also help you understand your current processes, identify the challenges, and define the different types of users and their goals.
Once these findings are available, it will be easier to spell out the organizational goals for DAM in terms of the problems you want to solve. Another pre-purchase best practice is to involve your stakeholders in the decision-making and seek their input in the goal setting, or identify power users who can share their insights on the existing processes.
- Choose a DAM solution that suits your business need
A DAM is a capital investment and needs careful consideration. It is best to choose a solution that is future-ready to assimilate new upcoming technological capabilities such as generative AI. Check non-functional elements like user-friendliness, the ability to integrate easily with other systems, or the latest security features.
At this point, cost is a critical deciding factor. A cloud-based DAM is probably the most cost-effective option with its pay-as-you-use payment model. Besides, it is easily scalable and minimizes the hassles of maintenance.
- Invest in governance and training and support for users
The success of a DAM depends on how well you have defined the rules before you configure it for your organization. This would include outlining the necessary elements such as taxonomy, metadata, user roles, and DAM workflows to maintain standardization and uniformity. Next would be to lay the rules of ownership and access for its users based on their roles.
Organizations must manage the change to ensure employees see value in the new system and adopt and leverage the tools (that they are unfamiliar with) to make their work easier and faster. Make the most of your vendor support and training, or arrange for sponsored training where such help is missing to ensure your employees understand all the functions.
- Continuously monitor and optimize DAM performance
Once in use, DAM must be monitored to verify if users are following the best practices. Regular maintenance will remove unused tags or metadata or update the system with the latest brand guidelines or content standards. User satisfaction surveys can reveal areas of improvement and help find new opportunities for improving DAM performance.
Establishing these best practices will help you maximize ROI, which is critical for justifying your investment in DAM. It becomes easier to get buy-in if one can also predict the payback period. However, it is challenging to arrive at an accurate time frame. One can only make an educated guess by considering the investment cost, average implementation time, and usage.
ROI - Presenting a business case for DAM
Marketers and creative designers don’t need to calculate the ROI of DAM to understand the value it delivers. However, to prove its worth as a profitable investment to the business, they must build a strong case for it. Quantifying the benefits and proving that DAM will continue to save costs, improve brand equity, prevent loss of assets, and increase productivity in the years to come can strengthen the case for DAM.
More importantly, one must recognize that new technological innovations promise to make DAM more than just a digital asset management tool. Powered by the cloud, AI, automation, analytics, and robust security features, DAM will lend itself to easy integration with other marketing tools and assume a wide range of capabilities giving it the status of a valuable business tool that manages not just digital assets but other marketing resources and workflows.
However, one must choose a DAM solution that meets the business objectives to get the best ROI. A small-sized company should consider a cloud-based DAM for its cost-effectiveness and elasticity while a mega multinational could opt for a fully loaded solution and still prove its ROI because it most likely needs all the features.
ImageKit is a cloud-based DAM solution offering a range of functions, including AI-infused tools. It has a wide range of automation and integration capabilities. If you want a Digital Asset Management system that will return positive ROI, it is ImageKit that you should consider.
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