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Measuring and Managing ROI

Measuring and Managing ROI. WFA/ISA Global Advertiser Conference Mar 5 2008. Agenda. Why worry? The 5 keys to effective marketing management People Objectives Measurement Optimization Monitoring What’s in it for me?. The first signs of a slowdown?. Marketing is under the microscope.

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Measuring and Managing ROI

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  1. Measuring and Managing ROI WFA/ISA Global Advertiser Conference Mar 5 2008

  2. Agenda • Why worry? • The 5 keys to effective marketing management • People • Objectives • Measurement • Optimization • Monitoring • What’s in it for me?

  3. The first signs of a slowdown?

  4. Marketing is under the microscope Budgets are shrinking CEOs are demanding ROI

  5. Or as the finance department says: • Why am I spending this money? • Can I do it with less? • What does it actually do to my business?

  6. Marketing effectiveness can double the improvement in ROI + 30% Strategic Resource Allocation Marketing Effectiveness Marketing Driver Optimization Campaign Effectiveness Mgt Marketing Return on Investment Media Buying Costs Marketing Efficiency Marketing Materials - 15% Marketing Services Mgt

  7. Increased focus on short-term sales drivers Source: Donnelly Marketing; Accenture; Zipatoni, via Promo; IBM Strategy & Change analysis

  8. The evolving landscape offers major challenges and opportunities Challenges Opportunites • Ever increasing pace of decision making required • Increased consumer power and avoidance • Difficulties in managing a vast volume of data • Balancing short-term responses with longer term value creation • Relentless pressure for accountability and quarterly profit generation • Improved technology allows course correction faster than ever • Ability to target audiences of one, with relevant messages • Data mining and analytics improved over the last decade • Web 2.0 allows marketers to create a dialogue with consumers • Digital marketing opportunities allow new remuneration models and increased accountability

  9. Marketers require marketing effectiveness frameworks that deliver • Speed of insight: Leverage technology to enable faster reaction to competitive/underperforming activities • 360 view of business: Alignment around objectives, consolidate all data to ensure programs are coherent • Ongoing RoI capability: From ‘piecemeal’ analytics to cost effective monitoring of MROI • Actionability: Make analytics relevant by putting them in the hands of decision makers

  10. The 5 keys to marketing effectiveness • People • Senior support from CEO/CFO • Objectives • Identify incremental and brand building efforts through multiple KPIs • Measurement • Quantify business drivers in financial terms • Optimization • Invest behind highest performing initiatives • Monitoring • Track and course correct on an ongoing basis

  11. High level overview Web Platform Data Integration Client Internal • Sales • Financials • CRM / Promos Client External • Retail Audit • Brand tracking Agency • Flowcharts • Competitive spending • Consumer insights Creative • Creative content Environment • Seasonality • Macro trends Benchmarks • Spending • Ratios • Effectiveness RoI Measurement

  12. Measurement example: Healthcare India Business Context Temperature Consumer Promotions Trade Promotions Pricing / Promotions Marketing TV Advertising Print Advertising Radio Internet Celebrity Endorsement Distribution Pricing Marketing Competitors

  13. Urban communities are more responsive to marketing but rural produces greater ROI ROI 4.2 3.1 0.2 3.8 1.3 1.4 0.9 1.1 1.2 2.3 3.6 0

  14. Reallocating communications spend improved profit by 18% TV w/ endorsement Print (Urban) Promo (Rural) TV : No endorsement Radio (Rural) Short-term incremental sales Promo (Urban) Print (Rural) Internet (Urban) Long-term brand building

  15. Monitoring: Marketing Console • Shield the complexity of measurement: • Monitor business performance: Track performance against all objectives and KPIs in real time • Evaluate Marketing effectiveness: Understand business drivers, their importance and profitability in the short and long term • Optimize spending allocation: Simulate, and optimize the business outcome of alternative spending scenarios

  16. What is in it for you? • Having the right process and tools in place will connect the CEO/CFO and CMO • Measurement is complex but allows you to understand the financial outcomes of decisions • Bringing this together in a marketing console allows you to balance both short-term sales drivers and longer-term brand building initiatives • Track ROI on an ongoing basis to adjust and course correct

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