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Marketing Analytics
 

Marketing Analytics

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    Marketing Analytics Marketing Analytics Presentation Transcript

    • Jim Nail Ed See John Nardone Principal Consultant Chief Operating Officer Chief Client Officer Forrester Research MMA MMA July 20, 2005
    • Project Methodology • Developed research questions for an online survey jointly with MMA Technologies and the ANA to research how the market leverages marketing analytics • Fielded a quantitative online questionnaire that surveyed approximately 143 US marketers • Conducted 10 follow-up qualitative interviews with opt-in respondents from various industries (i.e., consumer electronics, home goods, food and beverage, financial services, etc.) • Synthesized both quantitative and qualitative data This is who we surveyed: By revenue range: By marketing and advertising budget:: $5 Billion or more 29% $200 Million or more 24% $500 Million to $5 Billion 32% $50 Million to $200 Million 18% $25 Million to $500 Million 24% $15 Million to $50 Million 17% Less than $25 Million 9% Less than $15 Million 36% Don’t know 7% Don’t know 5%
    • The story last year . . . . . . the findings this year • Measurement is the hardest 50% are dissatisfied part of marketing • Defining “marketing ROI” 51% are dissatisfied is the first barrier • Good measurement creates new 46 - 56% are challenges: rapidly responding and dissatisfied changing established practices • Market mix modeling will 23 – 41% use rapidly gain adherents various models • Measurement will move to 18% expect to external, third-party organizations increase use
    • Marketing Can’t Deliver a Key Metric with Confidence How important is measuring Senior management is confident If marketing spending were marketing’s impact on total in the forecasts of how marketing cut by 10% I would be able to sales? activities will impact sales forecast the impact on sales. Don’t know Don’t know Don’t know 3.0% 5.2% 0.7% “Confident” Not Agree Agree important 23.0% 15.6% 19.6% Does not agree 43.7% Does not agree Somewhat Important 63.0% Somewhat important 61.5% agree 18.2% Somewhat 16.3% agree 30.4% “Competent” (On a scale of 1 to 6, 1-3 equals “Not important,” 4 equals “Somewhat important,” and 5-6 equals “Important”) (On a scale of 1 to 6, 1-3 equals “Does not agree,” 4 equals “Somewhat agree,” and 5-6 equals “Agree”) Base: US Marketers Source: Forrester Consulting study commissioned by MMA Technologies
    • Confident marketers use all kinds of models 53.3% Predictive models for direct response 36.9% 50.0% Customer lifetime value models 41.5% 46.7% Brand equity models 30.8% 46.7% Recency, frequency, monetary value models 29.2% 43.3% Confident Marketing mix models 46.2% Competent 40.0% Media mix models 40.0% Customer equity models 33.3% 23.1% Models predicting a customer’s 26.7% most likely next purchase 32.3% 26.7% Portfolio marketing spending models 27.7% 0% 10% 20% 30% 40% 50% 60% Base: US Marketers Source: Forrester Consulting study commissioned by MMA Technologies
    • “Confident” marketers involve finance, strategic planning Confident Competent 93.5% 79.70% 77.4% My company’s 76.5% marketing staff 70.0% 64.7% 54.8% 49.3% My company’s 54.8% 58.8% market research staff 43.3% 39.7% 54.8% 43.5% My company’s 45.2% 42.6% financial staff 30.0% 32.4% 41.9% 31.9% My company’s 45.2% 33.8% strategic planning staff 36.7% 30.9% 9.7% 7.2% 12.9% My company’s IT staff 10.3% 20.0% 27.9% Involved 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Helpful Future Base: US Marketers Source: Forrester Consulting study commissioned by MMA Technologies
    • …and outside measurement specialists Confident Competent 29.0% 30.4% 19.4% Advertising or direct 29.4% marketing agency 26.7% 33.8% 29.0% 27.5% 19.4% Media agency 25.0% 20.0% 17.6% 19.4% 8.7% Marketing 29.0% measurement specialist 16.2% 30.0% 16.2% 19.4% 15.9% 22.6% Research company 22.1% 26.7% 11.8% 13.3% 14.7% Management 6.5% 8.8% consultant 6.5% 8.7% 0% 10% 20% 30% 40% Involved 0% 10% 20% 30% 40% Helpful Future Base: US Marketers Source: Forrester Consulting study commissioned by MMA Technologies
    • Confident marketers lead in deploying data technologies Completed deployment Rolling out Data mining, Confident 53.3% 6.7% modeling, and predictive analytics Competent 32.3% 9.2% 46.7% Customer relationship Confident 10.0% management (CRM) 35.4% Competent 16.9% 36.7% Customer data Confident 26.7% warehouse or data mart Competent 41.5% 20.0% 26.7% Marketing Confident 6.7% automation or campaign management Competent 13.8% 3.1% 16.7% Marketing planning and Confident 6.7% resource management 10.8% Competent 0.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Base: US Marketers Source: Forrester Consulting study commissioned by MMA Technologies
    • Thank you Jim Nail +1 617/613-5796 jnail@forrester.com www.forrester.com Entire contents © 2005 Forrester Research, Inc. All rights reserved.
    • Is marketing ready for a seat at the “C” table? Only 25% of marketers said they Marketing can’t effectively justify its developed budgets based on spending knowledge of the spending Marketing does not know how to best required to meet corporate goals allocate spending in a fragmented and evolving marketplace Marketing measurements are too Only 15% of marketers agreed or often focused on delivery rather than agreed completely that they could effectiveness forecast the impact of a 10% budget cut Marketers don’t have confidence in their ability to manage their investments to meet objectives. Only 1 in 4 marketers said senior And management does not have management is confident or very confidence either. confident in forecasts of marketing impact on sales CONFIDENTIAL - PAGE 12 Copyright © 2005 Marketing Management Analytics
    • Getting to the table…learning from other industries Discreet and sequential levels. Levels are characterized by Benchmark current state capabilities demonstrated through repeated behaviors. Identify the desired target state Behavioral characteristics are assessed by specific Build targeted initiative and diagnostics. programs to get there CONFIDENTIAL - PAGE 13 Copyright © 2005 Marketing Management Analytics
    • Why is a capability maturity model appropriate for marketing? Level 5 Benefits Profitability Pros Increased marketing ROI Increased accountability Define metrics around Increased effectiveness Level 4 brand equity, marketing Customer performance and Converts customers Level 3 Manage the business Efficiency Experts against those metrics in a consistent and repeatable Level 2 way. Brand Builders Level 1 Agency Hostage CONFIDENTIAL - PAGE 14 Copyright © 2005 Marketing Management Analytics
    • • Measurement confused with analytics Level 1 Level 1 Agency • Oral tradition rather than documented norms. Agency Hostage Hostage • Use of measurement is limited to a few members of the organization. • Measurements are used to justify decisions that are already made. • Brand health measured inconsistently and without causals. Level 2 Level 2 Brand Brand • Brand efforts are “goodness” measures- not effectiveness measures. Builders Builders • Linkage between equity movement and sales anecdotal. • Agency performance comp often related to brand measures. Level 3 Level 3 • Analytics measure past performance, with insights informing future plans. Efficiency Efficiency • Analytics part of planning processes, but often not operationalized throughout the year. Experts Experts • Analytic skills on staff, most frequently in research organization. • Organization has visibility to key customer touchpoints across the enterprise. Level 4 Level 4 • Marketing goals directly aligned to business objectives. Customer Customer Converts Converts • Marketing leadership participates in all key business strategy decisions and directions • Analytics identify customer value for targeting. • Some analytics and data integration are on- demand. Level 5 Level 5 • Marketing process is defined, structured, and valued as a corporate asset. Profitability Profitability • Use of analytics is institutionalized, consistent, and demanded. Pros Pros • Data for decision making is available on a continuous and ongoing basis. • Analytics are current, and as near real-time as possible. • Marketing decisions include stakeholders from key organizations. CONFIDENTIAL - PAGE 15 Copyright © 2005 Marketing Management Analytics
    • How does the industry map against it? 61% of marketers are at level Level 5 one or two. Benefits Profitability Pros Increased marketing ROI Increased accountability 2% Increased effectiveness Level 4 The study found that most Customer companies collect a LOT of Converts 12% data…but fewer have meaningful metrics. Level 3 Efficiency Predictably, levels 4 and 5 Experts are dominated by direct 25% marketers. Level 2 Brand Builders However many direct 32% marketers fail at brand Level 1 building and sit at level 1 or 2 Agency Hostage 29% CONFIDENTIAL - PAGE 16 Copyright © 2005 Marketing Management Analytics
    • () & Marketers at level 1 and 2 have less access to specialized analytic resources. ! quot; # More advanced marketing organizations ! quot; # have broad cross-functional participation Use of a variety of models to create quot; # actionable metrics is a key differentiator of more advanced marketers $ Less advanced marketers have more % limited access to data and analytic tools & and technologies ' CONFIDENTIAL - PAGE 17 Copyright © 2005 Marketing Management Analytics
    • & * & & - + , . -& & . + / & & 2 + 0 / + 1 + 1 + & & CONFIDENTIAL - PAGE 18 Copyright © 2005 Marketing Management Analytics