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    Andy fisher Andy fisher Presentation Transcript

    • © 2013 Merkle Inc. All Rights Reserved. Confidential 1 Analytics Trends from the Trenches Not Really Magic – Secrets of real time Personalization and Attribution
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 2 The Customer Relationship Marketing Agency POS Phone Site Mobile TV Radio Display Print Social Direct mail Email Search Integrating diverse capabilities Through optimizing customer touchpoints Life sciencesNonprofit| || Increased customer value Improved media effectivenessImproved marketing ROI| | CRM Outcomes Integrating diverse capabilities Consulting Technology Experience, creation & digital mediaData & analytics| | | Utilizing industry experience to drive strategy Delivered across multiple engagement types Consulting | Marketing services | Agency of record Life sciencesRetail banking & Consumer finance Media & entertainment Technology & B2B Nonprofit Insurance & wealth management | | | || Retail |
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 3 Merkle Company Overview • Bronze Stevie Award “Business to Business Marketing Campaign of the Year- Business Services” „13 • Ad Age A-List: “Agency to Watch in 2012” • Largest privately-held agency in U.S., Ad Age ‟12 • 6th Largest CRM/Direct Marketing Agency, Ad Age ‟12 • Recognized by SmartCEO Magazine as a Future 50 Company „11 • NCDM Awards ‟04, ‟05, ‟06, ‟09, ‟10, „11 • Recognized by Forrester ‟03, „06, ‟07 &‟10 • Multiple MAXI Award Winner ‟10 ‟11 • Multiple DMA Innovation Award Winner „10 Distinctive experience Extraordinary expertise Sustained 25% growth since 1989 Awarded and recognized Revenueinmillions • Privately held by current management since 1988 • 150+ world class clients • Manage over 140 marketing databases • Manage 1.6+ petabytes of customer data • Inform over $10 billion marketing decisions annually • 1,700+ Employees • 250+ advanced degreed statisticians • 300+ dedicated digital professionals • 500+ marketing technology professionals • 100+ creative professionals $148 $180 $211 $223 $255 $303 $320 $365 $50 $100 $150 $200 $250 $300 $350 $400 2006 2007 2008 2009 2010 2011 2012 2013E
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 4 We Wrote a Book – for Analysts by Analysts Focus on HOW you bring customer-centric data, infrastructure and analytics to digital What‟s Possible and not Possible Anonymous/Known Profile Data Channel Specific Data Source issues Client Examples 70+ Analysts Contributed The realities of making this happen I‟m here to share some of the Trends I saw with you…
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 5 3% 14% 3% 5% 5% 5% 15% 5% 5% 40% 30% 40% 30% Attribution: The Theory – but how to handle non-addressable? Day 8-30 Day 1-7 Day 0-1 New Customer Actual experience Customer clicks paid search, so search gets credit Search over-attributed Direct Consumer clicked on search link. Rules: TV and DM exposure possible in last 7 days, so assign credit Better but still not accurate Rules Based Modeled Model-adjusted interaction Most accurate $ TV viewDirect mail sent Newspaper view Display view Social visitWebsite visit Paid search click Mass and Offline Digital 5 100%
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 6 Historically non-addressable media has been valued with MMO Time 0 50 100 150 200 250 300 350 0 5 10 15 20 25 30 Time TV 0 200 400 600 800 1000 1200 0 5 10 15 20 25 30 Time Direct Mail 0 50 100 150 200 250 0 5 10 15 20 25 30 Time Radio Input Data • Relevant data collected to incl. paid media & external influencers • Data is transformed to account for 2 key concepts : 1.Adstock – media exposure has a lasting impact over time 2.Saturation – there are upper limits for response (leads, apps, etc.) 0 10 20 30 40 50 60 1 3 5 7 9 11 13 15 17 19 21 23 Revenue Time Sales Decomposition TV Direct Mail Radio Print Base Statistical Models Base 51% Print 14%Radio 8% Direct Mail 11% TV 16% Segment 1 p i t p itit i xy 1 - 100 200 300 400 500 600 Segment 1 Segment 2 280 298 73 73 42 46 62 49 87 71 Revenue TV Direct Mail Radio Print Base Statistical Models • Econometric methodology based on statistical and economic theory • Most basic model is multiple regression using OLS (Ordinary Least Squares) • Model sophistication rapidly advances to solve problems in data or estimation Investment 0 20 40 60 80 100 120 140 160 180 200 0.0 24.0 48.0 IncrementalRevenue Investment Amount Print Radio Direct Mail TV 0 20 40 60 80 100 120 140 160 180 200 0.0 24.0 48.0 IncrementalRevenue Investment Amount Print Radio Direct Mail TV Response Curves & Optimization • Estimated coefficients from model are used to simulate response at every input level, giving a response curve • Optimizations are based on the concept of Marginal Return on Investment, which comes from the response curve
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 7 Trend 1: Top Down MMO and Bottom Up Attribution Merge Display $60 Video $80 Search $91 Other $113 LG 1 - $190Video 1 - $121 Video 2 - $35 Video 3 - $213 Video 4 - $23 Video 5 - $8 Video 6 - $4 Search 1 - $115 Search 2 - $87 Search 3 - $39 LG 2 - $163 LG 3 - $87 LG 4 - $74 LG 5 - $32 LG 6 - $29 LG 7- $11 Remarketing - $12 Guaranteed - $80 Non-guaranteed - $30 Auto / insurance - $18 National media (TV & radio) $140 Local media (TV & radio) $200 Direct mail $180 Digital $83Mix Digital Attribution Top down Bottom up Digital Attribution and Marketing Mix Modeling are unified into one version of truth. $ Sales
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 8 Reality Check MMO + Attribution • Media Mix Optimization together with Attribution • One model • Integrates Offline and Online • Most vendors doing some form of this • Historically the two are related Better Math X-Channel experts Attribution gaps • Incrementality • Decay Factors • Interplay of media • Data Scientists • All channel data • Data Viz Experts • Hard to find To do this well you need Data 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 methodology Open Issues Social Challenges • Predicitvity • Models • Sentiment Problems
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 9 The future: MMO/Attribution becomes segment based Display $60 Video $80 Search $91 Other $113 LG 1 - $190Video 1 - $121 Video 2 - $35 Video 3 - $213 Video 4 - $23 Video 5 - $8 Video 6 - $4 Search 1 - $115 Search 2 - $87 Search 3 - $39 LG 2 - $163 LG 3 - $87 LG 4 - $74 LG 5 - $32 LG 6 - $29 LG 7- $11 Remarketing - $12 Guaranteed - $80 Non-guaranteed - $30 Auto / insurance - $18 National media (TV & radio) $140 Local media (TV & radio) $200 Direct mail $180 Digital $83 Measurement and Calibration by Segment Mix Digital Attribution Segment 1 Segment 2 Segment 3 Top down Bottom up Starting in some verticals (i.e. Life Sciences). Huge opportunity for people here.
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 10 Personalization: If I solve for identity and experience, I can … Understand whom I am speaking with Personalize and optimize the experience Attribute the behaviors Movers & Shakers Family Matters Mature Planners Passives Loners
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 11 Trend 2: Cross-channel personalization AgentDigital Media Search Sales force automation / call planning prioritized by agent‟s segment and value mix Served Fixed Income X-sell offer Increased bid amount on “retirement planning” Increased Sales Force ProspectingCreative selection Site For display, optimization output is directly fed to the Demand Side Platform Decisioning Optimization Feed For SEM, bidding engine weights are output of analytics correlating keyword to high-value segments For site, real-time integration of segments into offer management system
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 12 Reality Check Many people doing within channel personalization well Far fewer are doing x-Channel personalization Cross Channel Infrastructure • Data source across channels • Enterprise segmentation • Cross channel Technology • Within-channel activation • The technology is good enough To do this well you need Organizational Silos • Different Goals • Different notion of customer • Lack of incentive • Different measurement approaches Open Issues Think this will become a large practice moving forward Big opportunity for people in the room
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 13 A few More Trends Worth Mentioning…
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 14 Trend 3: Consistent Segmentation Across the Enterprise Multiple segmentations across media, site, CRM, research, etc all become one Strategic Tactical • Based on behavior • Actionable; tied to database • Informs tactics • Based on research • Rich insight into attitudes • Informs strategy Rich Actionable Strategic Planning Value Proposition Program Planning Addressable Media Big opportunity from programmatic techniques to become the activation layer.
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 15 Trend 4: More Data in Connected CRM Platform (cDMP) Identifiable Platform (CRM) Targeting & Personalization cR TV Print Radio CCDM EM Display Search Social Mobile SiteRetail Aggregate Media Platform Digital Data Management Platform First, Second and Third Party Data Sources Integrated attribution and targeting accessible in real-time All 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 digital Foundational view of the prospect and customer including segmentation, contact history, and value All offline media interactions mapped to the individual/HH level including media research panel data Segmentation Measurement & Attribution Consumer Event Stream
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 16 Data Explosion “Big Data” is complex Need for multiple sources Change in what’s valuable Increase of data sources, digital, frag mentation, and overall volume of data in unlike any other time in the industry “Big Data” is driving big confusion; not always translating into insights No single provider of data can do it all - there are plenty of data sources out there, but no single source can have all the answers “Smart Data” is not a commodity Increased focus on consumer preference and data privacy Privacy Trend 5: Fragmentation and Confusion in the Data World A POV: The industry needs validation services.
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 17 Trend 6: Business Savvy Statisticians -> Data Scientists HR Manager: I used to look for unicorns – now I need purple unicorns All good new for the analytics community. But it will change how we do business. Data Scientists Big Data Tech: Hadoop, Hive, Pi g, Python, Mongo , Data Viz, etc Stat. Expertise: Modeling, Math, S AS, R, scientific, d eep data source knowledge etc Business Acumen: Communication, Pre sentation, MBA, cons ulting etc Academia Organization • How to train? • What department? • Many Universities trying experiments • Many self-taught • How to hire/create? • How to incent? • Analysts rise in org •CMOs •CTOs Business Model The Big Question • Costs rise • New models form • Some exit •Outsourcing wage gap closing • What happens when these people manage traditional media buys?
    • © 2013 Merkle Inc. All Rights Reserved. Confidential 18 Andy Fisher Chief Analytics Officer 410.794.7036 alfisher@merkleinc.com Questions?