This Aquent-sponsored webcast with Fred Geyer of Prophet will help you answer: Do you have an inventory of your growth investments? Can you identify waste? Do your investments change your customers’ buying behavior? Are your investments focused on customers’ barriers to buying? Do you have the right mix of marketing levers? Do you have a system to support “winners” and cut “losers”?

This Aquent-sponsored webcast with Fred Geyer of Prophet will help you answer:

Do you have an inventory of your growth investments?

Can you identify waste?

Do your investments change your customers’ buying behavior?

Are your investments focused on customers’ barriers to buying?

Do you have the right mix of marketing levers?

Do you have a system to support “winners” and cut “losers”?

Aquent is the Talent Agency For Marketing and Design Professionals We’re subject matter specialists, tuned-in to our global community of marketing and design experts. We help individuals and organizations increase their marketing potential through flexible staffing solutions and customized consulting services. Our agents are focused on a single marketing or design discipline ensuring both talent and clients a dedicated resource that speaks their language. We’re agents without borders – reaching all corners of the earth through technology, local touch points, and international presence. Contact us aquent.com 877 227 8368

We’re subject matter specialists, tuned-in to our global community of marketing and design experts.

We help individuals and organizations increase their marketing potential through flexible staffing solutions and customized consulting services.

Our agents are focused on a single marketing or design discipline ensuring both talent and clients a dedicated resource that speaks their language.

We’re agents without borders – reaching all corners of the earth through technology, local touch points, and international presence.

Contact us

aquent.com

877 227 8368

Making Marketing Smarter Amidst the Cuts Fred Geyer Partner, Prophet

But how should marketers respond? The troubled economy is putting enormous pressure on marketing budgets

Where to cut? What to cut? When to cut? How to cut? Reducing your marketing budget in the right ways presents quite a quandary...

Where to cut?

What to cut?

When to cut?

How to cut?

Assess Marketing Investments Along Six Value Levers Build Data, Metrics and Analysis, Process Capabilities Measure Impact on Sales Response Measure Impact on Sales Response and Brand Equity Measure Impact of Sponsorships Test and Learn Define and Institutionalize Common Metrics Develop and Implement New Marketing Processes Prophet has been helping clients answer these and other Marketing Accountability questions Build Capabilities Analyze Impact Improve Decision Making Processes & Metrics Representative Marketing Accountability clients

Assess Marketing Investments Along Six Value Levers

Build Data, Metrics and Analysis, Process Capabilities

Measure Impact on Sales Response

Measure Impact on Sales Response and Brand Equity

Measure Impact of Sponsorships

Test and Learn

Define and Institutionalize Common Metrics

Develop and Implement New Marketing Processes

Reducing & Reallocating Marketing Budgets in Difficult Times Five Tough Questions For Marketers

Do you have a complete inventory of your growth investments? Can you separate waste from effective spend? 1

Don’t be surprised if your marketing spend far exceeds your expectations Silos obscure spending in even the most sophisticated organizations The more-obvious: The less-obvious:

15% to 25% of marketing spend is typically wasteful and should be eliminated However, the clear producers need your support

How do you classify marketing investments? Conduct an Accountability Diagnostic

Do your marketing investments change your customers’ buying behavior? 2

For each group of customers... ... you want to focus on the key growth-generating behaviors

Prophet Marketing Investment Framework How do you know if your investments drive the desired behavior? Systematically assess the impact on behavior

Wasteful Spending Pattern 1 You overspend on attracting new customers when driving existing customers to buy more has more bottom-line impact

Wasteful Spending Pattern 2 Rewarding volume instead of loyalty

Are your investments focused on customers’ barriers to buying your brand? 3 Funnel stage Purchase rates Familiar Consider Aware Have Used Currently Use Loyal = 99.4 = 87.8 = 61.1 = 46.1 = 25.0 = 21.7 88% 70% 76% 54% 87%

Don’t be led astray by numerical efficiencies Understand barriers to growth and choose the marketing vehicles and messages to overcome them Highly-developed market... focused on building mass awareness because it seems more efficient Low market share... focused on closing sales because advertising looks too expensive MISMATCH! MISMATCH!

Familiar Consider Aware Have Used Currently Use Loyal = 99.4 = 87.8 = 61.1 = 46.1 = 25.0 = 21.7 88% 70% 76% 54% 87% Illustrative data A leading pain medication increased return on marketing investment by 45% It reallocated spend by focusing on the bottlenecks in the purchase funnel

Do you have the right mix of marketing levers among your investments? 4

Make the brand more available Provide temporary monetary incentives Change customer perceptions Slide ...so that customers buy more All marketing investments pull one or more of these levers...

But it is crucial to determine the right mix of investments Make the brand more available Provide temporary monetary incentives Change customer perceptions

Availability without strong brand perceptions reduces your ability to charge more Don’t Do

Strong brand perceptions without availability reduces your top line sales Before After 2000 $500M Sales, $56M EBIT 2007 $2.6B Sales, $1B EBIT Source: Coach Annual Reports 2008 vs. 2000

Inability to manage price incentives leaves money on the table Cuisinart 500 SmartPower Premier Source: Prophet comparison shop 7/4/08 Retailer Retail Price $104.49 $99.99 $79.99 (with food processor attachment) $67.49 $130.00 $69.86 (similar model)

Do you have a system to support “winners” and cut “losers”? 5

Supporting “winners” and cutting “losers” Consideration 1 System to debrief success & failure

Supporting “winners” and cutting “losers” Consideration 2 Maintenance versus growth

Supporting “winners” and cutting “losers” Consideration 3 Proven versus experimental Highly Aggregated Single Unit Level Mass Media Micro-Targeted Marketing Stimuli Sales Response Mass or Unaddressable Mixed-Media Chanel-Level Individual-Customer Level Geographic Markets Market-Level Field Tests Store/Channel Channel-Level Field Tests Individual Customer Level New/ Prospective Customers Market-Level Field Tests w/ Custom Tracking Channel-Level Field Tests w/ Custom Tracking Split Sample Testing Known Customers

Supporting “winners” and cutting “losers” Consideration 4 Direct and indirect impact

Supporting “winners” and cutting “losers” Consideration 5 Across the 4 Ps Product Price Place Promotion

We have no way of knowing when the economy will turn around Embracing marketing accountability is the smart thing to do

Slide Fred Geyer Partner, Prophet [email_address] + 1 (312) 879-1930 x 4814 www.prophet.com For more information, please contact:

Question & Answer

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