Andy fisher

Analytics Trends from the TrenchesNot Really Magic Secrets of real time Personalization and Attribution

2013 Merkle Inc. All Rights Reserved. Confidential#1The Customer Relationship Marketing AgencyPOSPhone SiteMobileTVRadio DisplayPrintSocialDirect mailEmailSearch

Integrating diverse capabilitiesThrough optimizing customer touchpointsLife sciencesNonprofit | | | Increased customer valueImproved media effectivenessImproved marketing ROI | | CRM OutcomesIntegrating diverse capabilitiesConsulting Technology Experience, creation & digital mediaData & analytics | | | Utilizing industry experience to drive strategyDelivered across multiple engagement typesConsulting | Marketing services | Agency of recordLife sciencesRetail banking &Consumer financeMedia & entertainmentTechnology& B2BNonprofitInsurance & wealth management | | | | | Retail | 2013 Merkle Inc. All Rights Reserved. Confidential#2Merkle Company OverviewBronze Stevie Award Business to Business Marketing Campaign of the Year- Business Services 13Ad Age A-List: Agency to Watch in 2012Largest privately-held agency in U.S., Ad Age 126th Largest CRM/Direct Marketing Agency, Ad Age 12Recognized by SmartCEO Magazine as a Future 50 Company 11NCDM Awards 04, 05, 06, 09, 10, 11Recognized by Forrester 03, 06, 07 &10Multiple MAXI Award Winner 10 11Multiple DMA Innovation Award Winner 10Distinctive experienceExtraordinary expertiseSustained 25% growth since 1989Awarded and recognizedRevenue in millionsPrivately held by current management since 1988150+ world class clientsManage over 140 marketing databasesManage 1.6+ petabytes of customer dataInform over $10 billion marketing decisions annually1,700+ Employees250+ advanced degreed statisticians300+ dedicated digital professionals 500+ marketing technology professionals100+ creative professionals

2013 Merkle Inc. All Rights Reserved. Confidential#We Wrote a Book for Analysts by AnalystsFocus on HOW you bring customer-centric data, infrastructure and analytics to digitalWhats Possible and not PossibleAnonymous/Known Profile DataChannel Specific Data Source issuesClient Examples70+ Analysts ContributedThe realities of making this happen Im here to share some of the Trends I saw with you

2013 Merkle Inc. All Rights Reserved. Confidential#4

3%14%3%5%5%5%15%5%5%40%30%40%30%Attribution: The Theory but how to handle non-addressable?Day 8-30Day 1-7Day 0-1New CustomerActual experienceCustomer clicks paid search, so search gets creditSearch over-attributedDirect Consumer clicked on search link. Rules: TV and DM exposure possible in last 7 days, so assign creditBetter but still not accurateRules Based ModeledModel-adjusted interactionMost accurate$

TV viewDirect mail sentNewspaper viewDisplay viewSocial visitWebsite visitPaid search clickMass and OfflineDigital

5100%

2013 Merkle Inc. All Rights Reserved. Confidential#5Historically non-addressable media has been valued with MMOTime

Input DataRelevant data collected to incl. paid media & external influencersData is transformed to account for 2 key concepts :Adstock media exposure has a lasting impact over timeSaturation there are upper limits for response (leads, apps, etc.)

Statistical Models

Statistical ModelsEconometric methodology based on statistical and economic theoryMost basic model is multiple regression using OLS (Ordinary Least Squares)Model sophistication rapidly advances to solve problems in data or estimationInvestment

Response Curves & OptimizationEstimated coefficients from model are used to simulate response at every input level, giving a response curveOptimizations are based on the concept of Marginal Return on Investment, which comes from the response curve 2013 Merkle Inc. All Rights Reserved. Confidential#6Trend 1: Top Down MMO and Bottom Up Attribution MergeDisplay$60Video$80Search$91Other$113LG 1 - $190Video 1 - $121Video 2 - $35Video 3 - $213Video 4 - $23Video 5 - $8Video 6 - $4Search 1 - $115Search 2 - $87Search 3 - $39LG 2 - $163LG 3 - $87LG 4 - $74LG 5 - $32LG 6 - $29LG 7- $11Remarketing - $12Guaranteed - $80Non-guaranteed - $30Auto / insurance - $18National media (TV & radio) $140Local media (TV & radio) $200Direct mail$180Digital$83

MixDigitalAttribution

Top downBottom upDigital Attribution and Marketing Mix Modeling are unified into one version of truth. $Sales 2013 Merkle Inc. All Rights Reserved. Confidential#7Reality CheckMMO + Attribution Media Mix Optimization together with Attribution One model Integrates Offline and Online Most vendors doing some form of this Historically the two are relatedBetter MathX-Channel expertsAttribution gaps Incrementality Decay Factors Interplay of media Data Scientists All channel data Data Viz Experts Hard to find

To do this well you needData Quality Cooke Data has Issues Idea 1: Leverage CRM data Idea 2: Leverage Panels/Good samples Idea 3: Statistical Identification/Fingerprinting Idea 4: Model Cookie Deletion Idea 5: First Party Data No Silver bullet Lack of Validation Rare in MMO Very rare in Attribution No agreed upon methodologyOpen IssuesSocial Challenges Predicitvity Models Sentiment Problems 2013 Merkle Inc. All Rights Reserved. Confidential#The future: MMO/Attribution becomes segment basedDisplay$60Video$80Search$91Other$113LG 1 - $190Video 1 - $121Video 2 - $35Video 3 - $213Video 4 - $23Video 5 - $8Video 6 - $4Search 1 - $115Search 2 - $87Search 3 - $39LG 2 - $163LG 3 - $87LG 4 - $74LG 5 - $32LG 6 - $29LG 7- $11Remarketing - $12Guaranteed - $80Non-guaranteed - $30Auto / insurance - $18National media (TV & radio) $140Local media (TV & radio) $200Direct mail$180Digital$83Measurement and Calibration by Segment

MixDigitalAttribution

Segment 1Segment 2Segment 3

Top downBottom upStarting in some verticals (i.e. Life Sciences). Huge opportunity for people here. 2013 Merkle Inc. All Rights Reserved. Confidential#9Personalization: If I solve for identity and experience, I can

Understand whom I am speaking with

Personalize and optimize the experienceAttribute the behaviors

Movers & Shakers

Family Matters

MaturePlanners

Passives

Loners 2013 Merkle Inc. All Rights Reserved. Confidential#Trend 2: Cross-channel personalization

AgentDigital MediaSearchSales force automation / call planning prioritized by agents segment and value mixServed Fixed Income X-sell offerIncreased bid amount on retirement planningIncreased Sales Force ProspectingCreative selectionSiteFor display, optimization output is directly fed to the Demand Side PlatformBid AmountsFrequency CapsCookieListSegment assignment codeNext BestOfferDecisioningOptimization FeedDMA & Daypart WeightsPlan & Buy AdjustmentsKeyword & creative weightsBid Amounts & Creative

For SEM, bidding engine weights are output of analytics correlating keyword to high-value segmentsFor site, real-time integration of segments into offer management system

2013 Merkle Inc. All Rights Reserved. Confidential#11Reality CheckMany people doing within channel personalization wellFar fewer are doing x-Channel personalizationCross Channel Infrastructure Data source across channels Enterprise segmentation Cross channel Technology Within-channel activation The technology is good enoughTo do this well you needOrganizational Silos Different Goals Different notion of customer Lack of incentive Different measurement approachesOpen IssuesThink this will become a large practice moving forwardBig opportunity for people in the room 2013 Merkle Inc. All Rights Reserved. Confidential#A few More Trends Worth Mentioning 2013 Merkle Inc. All Rights Reserved. Confidential#Trend 3: Consistent Segmentation Across the EnterpriseMultiple segmentations across media, site, CRM, research, etc all become one

StrategicTacticalBased on behaviorActionable; tied to databaseInforms tacticsBased on research Rich insight into attitudesInforms strategyRich ActionableStrategic PlanningValue PropositionProgram PlanningAddressable Media

Big opportunity from programmatic techniques to become the activation layer. 2013 Merkle Inc. All Rights Reserved. Confidential#14Trend 4: More Data in Connected CRM Platform (cDMP)Identifiable Platform (CRM)Targeting & PersonalizationcR

TV

Print

Radio

CC

DM

EM

Display

Search

Social

Mobile

Site

RetailAggregate Media PlatformDigital Data Management PlatformFirst, Second and Third Party Data SourcesIntegrated attribution and targeting accessible in real-timeAll anonymous and known digital exposures keyed to a universal user key (cookie level)Connected Recognition (cR) links known consumers (and their value) to their media interactions in the anonymous marketplace mass and digitalFoundational view of the prospect and customer including segmentation, contact history, and valueAll offline media interactions mapped to the individual/HH level including media research panel dataSegmentationMeasurement & AttributionConsumer Event Stream 2013 Merkle Inc. All Rights Reserved. Confidential#15Data ExplosionBig Data is complexNeed for multiple sourcesChange in whats valuableIncrease of data sources, digital, fragmentation, and overall volume of data in unlike any other time in the industryBig Data is driving big confusion; not always translating into insightsNo single provider of data can do it all - there are plenty of data sources out there, but no single source can have all the answersSmart Data is not a commodityIncreased focus on consumer preference and data privacyPrivacy

Trend 5: Fragmentation and Confusion in the Data WorldA POV: The industry needs validation services. 2013 Merkle Inc. All Rights Reserved. Confidential#Trend 6: Business Savvy Statisticians -> Data ScientistsHR Manager: I used to look for unicorns now I need purple unicornsAll good new for the analytics community. But it will change how we do business.Data ScientistsBig Data Tech: Hadoop, Hive, Pig, Python, Mongo, Data Viz, etcStat. Expertise: Modeling, Math, SAS, R, scientific, deep data source knowledge etcBusiness Acumen: Communication, Presentation, MBA, consulting etcAcademiaOrganization How to train? What department? Many Universities trying experiments Many self-taught How to hire/create? How to incent? Analysts rise in orgCMOsCTOsBusiness ModelThe Big Question Costs rise New models form Some exitOutsourcing wage gap closing What happens when these people manage traditional media buys? 2013 Merkle Inc. All Rights Reserved. Confidential#17

Andy FisherChief Analytics Officer

[email protected]? 2013 Merkle Inc. All Rights Reserved. Confidential#