A Digital Asset Management (DAM) system stores an organization’s images, videos, and other digital properties. A company will deploy a DAM primarily for marketing purposes, replacing manual methods for digital asset distribution.
Before deploying a DAM system, stakeholders should develop Return on Investment (ROI) metrics to justify costs. Cost savings and cost avoidance should be calculated to determine if a DAM solution is worthwhile.
Let’s review the reasons why an organization would deploy a DAM:
Re-use
Leverage existing digital assets so that new assets do not need to be produced.
Self-service
Provide a user-friendly platform for users to search, review, and download assets, so that support resources are not necessary.
Brand Enforcement
Restrict access to ensure that those assets available for distribution align to the company’s branding guidelines.
Security
Restrict access so that the assets available are only those authorized by the company for distribution.
Business Insights
Provide insights regarding asset usage and overall marketing strategy.
Each of these features provides opportunities for cost savings and cost avoidance. Companies can refine the formulas presented in this paper to develop an ROI relevant to their business.
Re-use
The ability to re-use assets for various marketing purposes significantly decreases costs. For a global company, asset re-use reduces the need for external markets to produce their own assets; markets spend a fraction of original production costs by customizing existing assets.
A simple formula can be created to calculate savings. An assumption can be made that costs to produce a new asset are eliminated for every x number of images downloaded. A simple survey can be distributed, asking asset users how often they customize existing assets versus producing them from scratch. For example, a company may determine that for every two hundred images downloaded, the production of a new asset is avoided.
Savings can be calculated as follows:
Total number of images downloaded: a
Number of downloaded images that replace a new production: b
Average cost of producing an asset: c
Therefore,
(a/b) * c = cost savings
Example: 1,000 images were downloaded (a). It is determined that for every two hundred images downloaded, the company eliminates the need to produce a new asset (b). The production cost of a new asset is $10,000 (c):
(1000/200) * $10,000 = $50,000
Although a DAM is not required for asset re-use, it simplifies the process of distribution and selection. Therefore, the company might further refine the cost savings to show that post-DAM deployment improved asset re-use capability by x percent. So, assuming 20% re-use capability, the revised savings for using the DAM would be:
20% * $50,000 (total re-use savings) = $10,000
Self-service
Companies that do not use a DAM system are likely to store re-usable assets in a mass storage application like Dropbox, Box, or Google Drive. Users navigating these applications have limited search and review capabilities. As such, these storage approaches often force users to contact support personnel for assistance in locating the assets they need.
We can assume that the complexity of locating assets is a function of the number of assets made available by the company. For companies that distribute a small amount of assets, say one hundred or less, this is not an issue. But for companies offering thousands or tens of thousands for assets, users can quickly get lost trying to locate what they need.
The company can formulate a savings function based on the number of assets they make available.
Let us assume that for every 1,000 assets stored in a mass storage application, 15 minutes of user support is required per day.
Our savings formula:
Number of assets available for download: a
Number of assets that require user support: b
Hourly amount of time required per day: c
Hourly cost for support resource: d
Support days per year: e
Therefore,
(a/b) * c * d * e = cost savings
Example: The company makes 5,000 assets available for download (a). It is determined that for every 1,000 images available, a support resource is required to assist users locating specific assets (b). The support resource spends fifteen minutes on average assisting users (c). The hourly resource cost is $25 (d). Number of support days per year is 200 (e).
(5000/1000) * .25 (15 minutes, or 25% of an hour) * $25 * 200 = $6,250 annual savings
Brand Enforcement and Security
DAM systems ensure that partners can access only the assets that conform to the brand guidelines defined by the company.
Although it would be difficult to quantify savings based on brand conformity, companies recognize that assets that do not conform present a deviation from the company’s current marketing strategy. This can trigger unexpected costs for the company; marketing material created with digital assets that do not follow branding guidelines must be located, retrieved, and corrected.
DAM systems also ensure that partners can only access the assets that the company wants to make available. Secure assets are often shared within the DAM for collaborative purposes. Unintended access to these assets could result in unexpected costs, confusion, or embarrassment.
The company may state that brand enforcement and asset security can be represented in a specific dollar amount in cost avoidance. It may be better simply to state the DAM acts as an “insurance policy,” protecting the company from costs that result from resolving brand enforcement and asset security issues.
If the company has experienced an actual setback because of one or both issues, it would be beneficial to demonstrate how those issues could have been avoided by using a DAM.
Business Insights
A DAM system can inform a company about marketing trends. DAM support teams regularly run statistics on number of users, number of downloads, user issues, and other valuable information. These statistics can provide analytical insight along these dimensions:
Asset content:
Which assets are being downloaded most frequently? Does this align to business expectations, or is the company encountering anomalies? For example, the company may be expecting that a certain set of assets would be widely downloaded and distributed because of a new advertising campaign. Is this happening? What other trends can be detected by examining the assets that users are actually downloading?
Geographic location of users:
Where are the downloads taking place? Are there regions that are doing more (or less) downloading than other regions? Are regions producing new assets that could be re-used by other regions?
Downloader roles and affiliations:
Who is doing the downloading? Users within the company? Agency users? Which agency is doing the most downloading? Should we be expecting other agencies to do more downloading?
Again, these insights may be difficult to quantify from a cost perspective. However, any insight that causes a company to change direction or adopt a new strategy can have a significant impact on costs. A statement reflecting that should be presented as part of regular cost savings reporting.
Conclusion
The savings that a DAM system generates justifies its costs. Developing a Return on Investment (ROI) plan for cost savings should be completed before DAM deployment. Savings are achieved primarily through asset re-use and support resource savings. Additional cost avoidance should be recognized through brand enforcement and asset security. DAM analytics can provide companies with an opportunity to achieve significant savings by identifying and responding to marketing trends.