Measuring your Marketing Effectiveness for Budget setting public

Paul Laughlin, Managing Director, Laughlin Consultancy @LaughlinPaul

Actionable Budget Marketing Strategy

#MSMS2015

© Laughlin Consultancy Ltd, not to be used without permission.

Klondike Goldrush


Klondike Goldrush


Our digital goldrush❖ How many Twitter Followers?

❖ How many Facebook Fans/Likes?

❖ Has your video ‘gone viral’ on YouTube?

❖ How many downloads of your latest app?

❖ How many site/blog visits?

❖ How many people saw your commercial?

❖ Are we being recommended?


What a business should measure

❖ Turnover is vanity…

❖ . . . Profit is sanity

❖ Return On Investment


Simple caseSa

les

Reve

nue

& M

arke

ting

Cost

(£)

Marketing Spend (£)

Sales Revenue Marketing Cost Base level of sales

Sale

s Re

venu

e &

Mar

ketin

g Co

st (£

)


Sales Revenue Marketing Cost Base level of sales Revenue - Marketing Cost

Net revenue view

Value destroying Marketing

Reve

nue

& Co

sts

(£)


Net Revenue (Revenue - Marketing Spend) Fixed & Variable costs

Limitations of Net Revenue

Profitable Marketing Loss-making Marketing

ROME


ROME = ( Δ∆Revenue – Δ∆Costs) / Δ∆Marketing Spend

From “Marketing Payback” Robert Shaw & David Merrick:

Two types of Marketing


• Brand building

• Awareness & Consideration

• Maintaining Share of Voice

• Social can be both (from LinkedIn ads to broadcast YouTube)

ATL

BTL• Targeted communications

• Personalised & timed

• Driving action, often to buy

Econometrics for ATL


• Statistical technique(s) to help assess which of many possible factors are key drivers of sales results, combine them in a quantitative model and then use to predict the future

• Business input needed on factors

• Establish Base

• Allow for ad-stock

• Evaluate ‘halo effects’

Experimental Method for BTL


Response'Data'

(all'channels)'Contact'History'

F2F/Service'

Call'Centre'

Website'

Outbound'

eMail/DM'

Social'

STEP'1'Data$Gathering$

STEP'2'Matching$Back$ Response' Contact'

History'

STEP'3'Considering$rela5onship$and$other$drivers$

Brand$Rela5onship$

Learning$from$Econometrics$

Marketing attribution includes considering multi-media attribution &

multi-channel view of value

Targeted$$+$

Contacted$

Untargeted$+$

Contacted$

Targeted$$+$Not$

Contacted$

Untargeted$+$Not$

Contacted$

You need insight

CustomerData

Customer Research

Customer Analysis

Database Marketing

Feel &Measure

Target Marketing

ConvergeEvidence


Marketing Attribution


Incremental Modelled

Financial Reporting

Market Position

Media Tracking

Budget Allocation step 1❖ Annual Marketing budget

setting often done by:

❖ functional unit allocation

❖ share of revenue allocation

❖ share of voice allocation


❖ More important to ‘rightsize’ the budget

❖ Optimising ROME not qualitative metrics

Budget Allocation step 2❖ Optimal allocation across:

❖ Products/Markets

❖ Brands

❖ Purchase Funnel


❖ Compare ROME contributions of each ‘cube’

❖ Consider evidence for media interdependencies

Positive Case Study

Diageo Marketing Measurement

Impact on the Consumer

Low High

ROI (

5 ye

ar)

100%

-100%

Brand A Brand B Brand C

TV Print Digital TV Print Digital TV Print Digital

GB ————— DOWN

Ireland UP

Spain

France

Portugal UP NEW NEW

Greece

Australia

South Africa

Mexico DOWN UP

Proven Effective Not yet proven

Judged Effective Unsatisfactory (ineffective)

1. Dogs and Stars chart

2. Advertising effectiveness by brand

Credibility requires Accountability

❖ Use the language of profit

❖ Use ROME with Finance

❖ Converge attribution evidence

❖ Rigorous budget allocation


linkedin.com/in/paullaughlin

[email protected]

+44 (0)7446 958061

Contacting me:

customerinsightleader.com

laughlinconsultancy.com

@LaughlinPaul


Measuring your Marketing Effectiveness for Budget setting public

Documents