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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

Measuring and Managing ROI

WFA/ISA Global Advertiser Conference

Mar 5 2008

agenda
Agenda
  • Why worry?
  • The 5 keys to effective marketing management
    • People
    • Objectives
    • Measurement
    • Optimization
    • Monitoring
  • What’s in it for me?
marketing is under the microscope
Marketing is under the microscope

Budgets are shrinking

CEOs are demanding ROI

or as the finance department says
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?
marketing effectiveness can double the improvement in roi
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

increased focus on short term sales drivers
Increased focus on short-term sales drivers

Source: Donnelly Marketing; Accenture; Zipatoni, via Promo; IBM Strategy & Change analysis

the evolving landscape offers major challenges and opportunities
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
marketers require marketing effectiveness frameworks that deliver
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
the 5 keys to marketing effectiveness
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
high level overview
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

measurement example healthcare india
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

urban communities are more responsive to marketing but rural produces greater roi
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

reallocating communications spend improved profit by 18
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

monitoring marketing console
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
what is in it for you
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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