Thursday, December 20, 2012

return on investment (ppp)

[local news story] 'New Mexico True' campaign has 3-to-1 return
"The New Mexico Tourism Department said their latest campaign has tripled its return on their investment."
no ...
it is at best 3.6-to-2.5 return
it is at worst 3.6-to-3.7 return
a state tourism department's marketing campaign cannot generate return on investment because there was no investment ... the department purchased a marketing campaign ... it was an expenditure ... the investment is in the tourism department itself ... the investment is the department's budget.
"Back in April, they hired a Texas firm to do the work on the "New Mexico True" campaign.  It cost around $1.2 million dollars and the Department says they have seen $3.6 million dollars returned in state and local taxes."

"Monique Jacobson from the Tourism Department is asking the State to double its budget for next year to $5 million dollars."

budget = 2.5 mil
campaign = 1.2 mil
$3.6 mil returned in state and local taxes.
the only question is whether or not the 1.2 mil cost of the campaign was included within the department's budget ...

if it is, then they made 1.1 mil on investment of 2.5 mil:
ROI (nm tourism dept) = (3.6-2.5)/2.5 = .44
... they made 44 cents on every dollar invested ... not 3 dollars on every dollar invested as the article claims.

if it is not, then:
ROI (nm tourism dept) = (3.6-3.7)/3.7 = -.03
... which is negative ... meaning, they did not bring in enough taxes to cover the department's cost to the state.
return on investment = (gain from investment - cost of investment) / cost of investment
The purpose of the "return on investment" metric is to measure per period rates of return on dollars invested in an economic entity.
whenever government (or media coverage about government) uses the term ROI, they are preparing you for public-private partnerships ... (they are building the public lexicon) ... only under fascism does government partner with business to make money off the public (ie. return on investment).
Public-Private Partnerships – when private industry provides public services for profit. The original taxes for the services remain in place, but a duplicative “service for FEE” structure is added. It is FASCISM, and it should NOT be considered as a solution to the State’s budget woes. It promotes monopolies and destroys small business. If the stakeholder is not a shareholder, he has no voice.
under the us constitution, the government derives its powers from the consent of the governed ... it does not say government above the people ... we are not subjects or slaves ...

specifically, it says:
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed…”

the power structure is bottom up, not top down.
... "It's like losing a war to Hitler. And they say in advance: what would it be if you lost
a war to Hitler? Well I don't know. We didn't.  We never lost one. But you want to try? To
most of them they say: No. But looks like they want to try on this one." (Pete Domenici)
Eye on New Mexico - March 6, 2011