Localization ROI – A Roundup
“Round up the usual suspects!”
Just as the software market has a vast number of segments, there are a vast number of articles on the return on investment (ROI) of software localization projects. You have everything from mobile apps to websites, to traditional desktop/laptop and enterprise apps, to “as-a-Service” offerings. For each of these, projecting or calculating ROI is often a black art, measured in different ways by different companies. Rather than just give one point-of-view, it is important to heed what is being said across a broad spectrum. So we thought we’d highlight various opinions from peers across the translation and localization industry. Here’s our roundup of some of the usual suspects:
Global by Design: “What’s the ROI of web globalization?” — Let’s start with the heretical viewpoint. John Yunker’s 2014 article begins with the example of Apple’s Tim Cook, who reportedly told an investor meeting that “I don’t consider the bloody ROI” when considering the cost of making Apple devices accessible to the blind. For Yunker, it’s not the cost that’s important. It’s whether you want to offer your products or services in a market or not. Once you have decided you are going to work in a market, then do it right. The caution Yunker issues is that ROI arguments are often made to lowball projects — to barely conform with the needs of a foreign-language market — and such penny-pinching often “can in fact be dangerous.” We tend to agree. If you are going to undertake a translation project, don’t use ROI as an excuse to low-ball the project and undermine the final quality of your efforts.
Milengo: “Website Localization ROI: Proving it to the Boss” — This 2011 article is a fairly good nuts-and-bolts description of what’s required for web project ROI, and focuses on calculations such as the site’s Source and Target Event Conversion Rates: S(ECR) and T(ECR). Even then, it shows that some estimations of ROI will be subjective. Again, we’d agree. There are standard measurements for clickthrough rates, traffic monitoring by country, and so on. Yet you may have to develop tailored metrics for your own key performance indicators (KPI).
Smartling: “Seeking Quick ROI? There’s a Localized App for That” — A 2013 article by Nataly Kelly (formerly of Common Sense Advisory) offers concrete examples for the app market, such as from an experiment by David Janner that showed how downloads for a localized game grew from 3,000 a month with 76% of the traffic coming from English-language markets, to a rate of 23,000 per month, with 90% of the traffic coming from non-English-language audiences. In another study by Distimo, localizing an iPhone app resulted in 128% more downloads per country, and 26% more revenue per country added. While these specific examples provide confidence, the unsaid concern is that “Your Mileage May Vary” (YMMV). There are a myriad of other factors that can be involved beyond the simple cost of app translation/localization, including whether you properly budgeted marketing and advertising costs to make sure people knew you just released your new app or game in a native market. Always keep in mind the addage from Common Sense Advisory, “Can’t Read, Won’t Buy.”
SimulTrans: Localization Return on Investment — Another blog from 2013, this one from SimulTrans, digs a bit deeper into broader software market projects, citing how translation costs can vary significantly depending on language (Spanish may be far less expensive to translate than Japanese), and how you might even incur significant re-engineering costs if you had not considered internationalization in the architecture of your software from the get-go. Overall, the spending on localization for SimulTrans’ customer base turned out to be about 19.5% of localized product revenue; this included not just the cost of external translation services, but also internal program management, engineering and testing. They also have some tips on how to attain savings through translation memory, automation and simplification, limiting documentation, and focusing on selected foreign language markets where anticipated product revenues are highest. They too end their recommendations by warning about cost-cutting in the wrong areas, “overburdening unqualified reviewers, delaying release dates, and ultimately resulting in a poor-quality final product.”
Computer Technology Review: Modernize Translation and Localization Processes to Delier Global SaaS Offerings — Judd Marcello, also of Smartling, took a different viewpoint in 2015, looking specifically at the Software-as-a-Service (Saas) market. Here, the argument was more rhetorical, and less analytical: “providers today really can’t afford not to translate.” The main takeaway from this article is that not only linguistic translation needs to be considered for SaaS offerings, but also “an international monetization structure.”
Whether mobile apps, websites, traditional applications, or software-as-a-service, it certainly behooves you to think about the costs involved, and balance those costs against the revenue opportunities of new markets. With the wide panorama of possibilities in the software market today, there is no single algorithm to easily calculate ROI. Even if there were, it could not take into consideration your own company’s mission and philosophy and your team’s vision and passion. Hopefully from these examples, and others you can find on the Internet, you can come up with your own formula for success! Let us know if you find any gem of wisdom you’d want us to include in a future round-up.
If you have any strong opinions on the subject, or want to drill down on the topic with us in more depth, please feel free to email us at projects@e2f.com.