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MARKETING MIX CHALLENGE: DECLINING DOLLARS / GROWING PLATFORMS MEDIA CHANNELS BUDGET 100% 80% 60% 40% 20% 0% 2002 2006 2012 #C360 MEASURING SUCCESS REQUIRES FACT-BASED LEARNING QUANTIFYING MARKETING RETURNS IS NOT SIMPLE SOCIAL MEDIA TRADITIONAL DIGITAL MASS • REACH GRANULAR • TACTICAL #C360 THE SOLUTION • MARKETING MIX IS STEP 1 • GRANULAR DATA + COSTS + CLIENT DETAILS = FORWARDLOOKING, PRESCRIPTIVE OPTIMIZATION • MAGNITUDE OF RESULTS ARE SURPRISING #C360 REI – A UNIQUE CORPORATE CULTURE BIKING KAYAKING SKIING ECOFRIENDLY CUSTOMER SATISFACTION #C360 FACT-BASED INSIGHTS = OPTIMAL RESULTS ROI 59% 1 2 3 #C360 MEASURE EVERY TACTIC IN A MEANINGFUL WAY NON-BRANDED BRANDED DIGITAL PAID PAID SEARCH TV RADIO PRINT COMPARATIVE SHOPPING ENGINE UNPAID #C360 MEASURE ALL SALES CHANNELS BOTH TRADITIONAL AND ONLINE TRADITIONAL RETAIL STORE SALES COMPLETE TACTIC PERFORMANCE DIGITAL REI.COM SALES BY DMA #C360 FIND THE TRUE SOURCE OF AN INCREMENTAL PURCHASE AND OVERCOME THE “FALLACY OF LAST TOUCH” EXAMPLE #1 Marketing mix models would correctly give credit to TV EXAMPLE #2 Assigning credit by tracking click thru patterns would incorrectly give credit to Search Marketing mix models would correctly give credit to Display Because there is no way to directly track clicks from display to retail, credit would be “lost” KEY PROPERLY CREDITED IMPROPERLY CREDITED #C360 3-STEP PROCESS TO ANALYZE CURRENT BUSINESS PERFORMANCE MARKETING MIX MODEL- METHODOLOGY ALIGN SALES WITH MARKETING STEP 1 SALES DIRECT MAIL TV TIME #C360 3-STEP PROCESS TO ANALYZE CURRENT BUSINESS PERFORMANCE MARKETING MIX MODEL- METHODOLOGY STEP 2 SALES DIRECT MAIL TV ATTRIBUTE SALES TO ACTIVITIES OCCURRING WHEN SALES INCREASED Print TV DIRECT MAIL Online Core #C360 3-STEP PROCESS TO ANALYZE CURRENT BUSINESS PERFORMANCE MARKETING MIX MODEL- METHODOLOGY STEP 3 ANALYZE RESULTS EXPLAIN CHANGE VS. YEAR-AGO CALCULATE ROI #C360 CUSTOM OPTIMIZATIONS IDENTIFY BEST POSSIBLE INVESTMENT MARKETING MIX MODELS MARKETING COSTS AND PRODUCT MARGINS OPTIMIZED PLAN TV PRINT ONLINE BY ACTIVITY BUSINESS RULES BY WEEK BY BRAND BY CHANNEL #C360 OPTIMIZATION: SAME BUDGET, BETTER RESULTS Current Spend Optimal Spend 40,000 40,000 35,000 35,000 30,000 TV Online 25,000 20,000 15,000 10,000 5,000 Add $500k Gain 12,000 units INCREMENTAL IMPACT INCREMENTAL IMPACT Cut $500k Lose 2,500 units 30,000 TV Online 25,000 20,000 15,000 10,000 5,000 0 250 500 750 100 0 125 0 SPEND IN CHANNEL ROI = $1.25 150 0 0 250 500 750 100 0 125 0 SPEND IN CHANNEL 150 0 ROI = $1.42 #C360 CONTINUOUS IMPROVEMENT = IMPROVED PERFORMANCE REFINE MODELS MORE GRANULARITY NEW TACTICS #C360 MAKE STRATEGIC SHIFTS IN YOUR TIMING #C360 MAKE STRATEGIC SHIFTS IN YOUR MARKET RADIO MARKETS DIGITAL MARKETS TV MARKETS ALL TACTICS MARKETS CHICAGO MADISON MILWAUKEE SAN FRANCISCO BOISE AUSTIN BOSTON ATLANTA SAN DIEGO SEATTLE SALT LAKE CITY MINNEAPOLIS #C360 ACCOUNT FOR DIFFERENCES ACROSS SALES CHANNELS BUDGET 2.9% REVENUE RETAIL SALES (2.5%) 14.7% ONLINE SALES (8.7%) #C360 HOW TO IMPLEMENT • KNOW NOT ONLY WHERE MARKETING DOLLARS WENT, BUT WHERE THEY SHOULD GO • INCREASE PRECISION WITH MORE GRANULAR DATA AND MAKE MORE SUCCESSFUL STRATEGIC DECISIONS • CONTINUOUSLY REFINE/IMPROVE BASED ON THE CHANGING ENVIRONMENT #C360 WHAT DID YOU THINK? RATE THIS SESSION USE THE MOBILE AGENDA: 1. SELECT SURVEY 2. FIND THE LINK FOR YOUR SESSION USE YOUR PC OR IPAD: 1. NIELSEN.COM/C360 2. ACCESS THE ATTENDEE ONLY LINKS