M ARKE T ING ANALY T IC S
M ARKE T ING ANALY T IC S
ited by being point-in-time and backward
n chasing new measurement and
looking. Both of these approaches deliver
analytic initiatives to address ROI,
Is Not signiﬁcant value by ﬁlling important in-
too many marketers are missing the
formation gaps, however a great opportu-
more important goal of building
nity exists to combine the depth and im-
measurable and repeatable approaches to
mediacy of the data warehouse approach
with the causal analysis of mix modeling.
As a result, marketers are often build-
A few marketing innovators have
ing systems that assess efforts after the
already begun to implement this in-
fact, but do not provide the means to
tegrated vision. An OTC drug marketer
manage them. Instead, they should focus
has taken the ﬁrst steps, with encourag-
on building well-instrumented “marketing
ing results. They have consolidated their
effectiveness systems” to both under-
marketing information in an up-to-date
stand and control the impact of marketing
data mart, and overlaid causal models and
programs while continuously improving
only one step in forecasting tools. These tools support a
structured process of performance evalua-
A marketing effectiveness system,
building marketing tion, simulation and course correction.
as such, is not a technology solution.
This “system” of people, process, data
It is a structure in which information
effectiveness. and tools has empowered management to
feedback is built into marketing programs,
diagnose business performance in a more
customer touch-points and the business
timely and objective manner, forecast
process overall, with standing analytics
By sales, understand sales variance, validate
and processes to enable informed deci-
strategic actions, and manage budgets
sions and actions. John Nardone
and marketing tactics more optimally. The
More than a measurement or analyt-
and Ed See result is increased accountability and the
ics approach, a marketing effectiveness
Marketing Management freedom to focus on marketing innovation
system requires a coordinated effort that
with greater conﬁdence.
enables measurement, diagnostics, and Analytics, Inc.
Similarly, another CPG marketer has
the ability to anticipate the likely results
begun to re-align its organizational struc-
of different scenarios in order to make
ture and processes to react more quickly
to the more timely and provocative infor-
Through structured feedback loops, Many organizations are already mak-
mation being provided from their new sys-
causal models and scenario-planning ing progress by pursuing more complete
tems. A major airline has begun measuring
tools, marketers understand what is hap- and timely data, combined with better
the impact of its mass-marketing efforts
pening in their businesses, why it is tools and processes to interpret and act
against its customer-value segments, and
happening, and are able to act upon the upon it. In industries that have direct
a ﬁnancial-services provider is optimizing
information with predictable results. Ide- relationships with the end consumer,
the relationship between its mass-market-
ally, all stakeholders share consistent and companies are deploying data warehouses,
ing and direct-mail acquisition efforts, in
on-demand access to this information so campaign management and analytic sys-
real time. These examples represent the
that collaborative decisions can be made tems to help marketing teams understand
earliest impact of market-leading efforts.
quickly and efﬁciently. and manage customer value at the indi-
Such efforts will expand and accelerate in
To be sure, many challenges lie in vidual and segment levels. These systems
the next two years, providing signiﬁcant
measuring the right things, establishing require investment, but offer continuous
competitive advantage to the early leaders.
valid causal models, and making the orga- feedback into the marketing process.
For all the promise of the early suc-
nization’s decision processes and controls In industries that lack individual cus-
cesses, we’ve also seen the negative impact
clear and easy to operate. But if there is a tomer data, marketing mix and price-elas-
of poorly designed metric and measurement
sound change management process and an ticity modeling have become cornerstones
programs. Such programs are ineffectual
appropriate level of organizational maturi- that inform marketing-plan development.
at their best; at their worst they may en-
ty to support the effort, these challenges These analytic techniques provide valu-
courage perverse and destructive behavior.
can be addressed and overcome. able guidance, but they are usually lim-
12 THE HUB
How mature is your
For instance, we have observed how These examples underscore the need
Maturity models are used to quickly
one CPG marketer’s focus on marketing to approach the challenge of marketing
assess an organization’s capabilities
ROI at the expense of other measures has effectiveness carefully. Building a func-
and determine the most appropriate
stiﬂed innovation within their marketing tional marketing effectiveness competency
initiatives for advancement.
teams. Over time, brand managers became requires a comprehensive planning effort,
Exploration of seven diagnostic areas
increasingly risk averse as their performance but the beneﬁts are worth the effort. By
appraisals were inﬂuenced by changes in following a series of simple program steps, can accurately place organizations in
their brands’ annual ROI report cards. Only most organizations can achieve the re- the following marketing analytics ma-
after several years of tepid top-line growth quired alignment of people, process, data turity model (see Chart 1 on the left).
has management reduced the importance and technology and realize signiﬁcant
◆ Analytics Scope
of the ROI scores to encourage more ex- year-on-year improvement in their mar-
What is the focus of the analytics?
perimentation. keting effectiveness.
Are there true analytics or just re-
Another cautionary tale: One retailer
Five Steps to Success porting? What efforts are focused
systematically shifted resources over a
on advertising, the brand, the cus-
As marketers begin to undertake
period of years from brand-equity-based
tomer, sales and proﬁts?
enterprise marketing effectiveness initia-
advertising into pricing and promotional
tives, there are ﬁve keys to success:
marketing in an effort to increase market-
◆ Business Objectives and Impact
ing ROI. For the ﬁrst few years, the tactic
1. Understand the current state of your At what level do the marketing
seemed to work, as marketing ROI scores
marketing-decision processes. As the analytics and business objectives
increased. But it soon became clear that
ﬁrst step to building new marketing align?
while the efﬁciency of marketing-driven
effectiveness core competency, it is im-
sales had increased, the baseline sales were
portant to understand the current state ◆ Typical Metrics
falling fast. This marketer had won a short-
of how the organization actually oper- Are metrics clearly tied to desired
term ROI battle, but was losing the war.
ates to make and implement marketing business results? Are the causal
relationships between the measures
and outcomes clearly understood?
◆ Major Marketing Analytic Activities
Level 5 How are the analytics being used?
Are they used to justify decisions
ct tab ROI
after the fact, or are they used to
ea ed Mar ts :
Ef oun ing
drive decisions? Do the analytics
In rea sed neﬁ
se Ac ke
support forecasting? Supply/de-
In crea Be
mand chain integration?
◆ Organizational Participation
What skills and groups contribute
Level 3 to the process?
◆ Studies and Research
What data and information is
bought, tracked and used?
◆ Services and Tools Used
How is data managed? What tools
CHART 1 are used? Which services are bought
Level 1 and which are in-house?
Maturity Model ➜
organization’s c. We leverage our analytic models within our re-
1. Do you have all the information you need
marketing porting system so we can track against them in
to support your marketing decisions?
analytics a. I rarely feel like I have all I need.
helping you b. I feel pretty good about half the time. 7. Does your marketing system automatically
win in the report against key performance indicators
c. Most of the time, I have enough to make
at the brand, category and portfolio level?
a. No, no and no.
Take this quiz
2. For each reporting period, do you mobilize b. Some of the brand information is automated,
to ﬁnd out staff across marketing, research, IT and but the portfolio level is not.
ﬁnance to assemble data and create reports?
c. We automatically report against the cumulative
stand. a. That’s standard operating procedure. impact of our programs at the brand, category
and portfolio levels.
b. Some standard reports are automated,
but there is always a lot of custom work.
8. Can you relate brand metrics, consumer seg-
c. Most of the reporting is automated.
ment data and market performance over
3. Are you frustrated with data from multiple
a. Only with great effort. It is a custom analysis
sources that do not tie together?
a. Yes. We spend too much time on reconciliation.
b. We can overlay trend data, and that is some-
b. Sometimes, but we have learned to live times helpful.
c. We have models that link brand metrics and
c. Our systems are cross-validated. They usually tie. consumer segment data to market performance,
and can use them for all sorts of causal and
4. Do you ﬁnd that reports provide good
information, but are not timely enough
to effect programs in the ﬁeld? 9. Are your forecasts accurate?
a. By the time we read most programs, a. Deﬁne accurate?
they are already ﬁnished.
b. We usually get within an acceptable margin
b. Occasionally we get an early enough read of error, but there is the occasional disaster.
to impact a program in ﬂight.
c. Forecasting is an organizational strength.
c. We not only track programs continuously,
we have a process to act upon the data.
10. Does your marketing information allow you
to anticipate market and competitive moves
5. Do you skip analyses that you know before they happen?
would be helpful, because they are
a. I’m lucky to get accurate data on last quarter.
too time consuming or painful to do?
b. We have good current data, but it rarely
a. Happens all the time.
helps anticipate the future.
b. I avoid pulling in IT and ﬁnance,
c. We routinely run simulations to anticipate the
but sometimes have no choice.
potential impact of market, trade or competi-
c. It is easy to pull together data from tive actions.
throughout the organization.
Scoring: Give yourself one point for each choice #1, two
6. Does your organization understand how points for each #2, and 3 for each #3.
all of their data ﬁts together to represent If you scored 25 or above, consider your organization an
key marketing levers? innovative marketing leader.
a. We have a lot of data, but it is not integrated If you scored between 18-24, you are hanging with the
into a meaningful picture. pack, but have no competitive advantage in this area.
b. We have modeled some of the key data If you scored 17 or less, you are likely being trumped by
relationships, but our data is not reported your competition, though you probably won’t ﬁnd out
against them in an ongoing manner. about it for several months.
14 THE HUB
reality will require that organizations will
➜ decisions. What are its existing core sure that the key stakeholder groups buy
need to make accommodations. Good pro-
into the business case and the timing.
competencies? What are the key planning
gram management, with comprehensive
4. Determine key success factors for
in-process metrics, provides a way to ad-
Start by documenting key decision
each stage. It is critical to understand
just the programs based on reality.
processes. Capture how decisions really
the issues that will enable or impede suc-
Additionally, it’s important that
are made, not the idealized process that is
cess for each stage, and ensure that the
each stage in developing a marketing ef-
represented in binders or ﬂow charts. For
organization is ready to address them
fectiveness competency shows real and
each decision, carefully identify who the
before moving forward. Typical issues
meaningful impact — both from a business
decision maker is, and who are key inﬂu-
to examine include available leadership,
perspective and from a stakeholder and
encers. A useful structure to capture and
staff skills, technology capability, cul-
team perspective. If the program never
organize this information is RACI matrix
ture, change tolerance, etc. progresses to the next stage, there should
(responsible, accountable, consulted and
Once weaknesses in the key success
be measurable advantage gained for the
factors have been addressed, the orga-
level achieved. By working forward from
2. Envision an ideal end-state. With nization is ready to move on to the next
the current-state baseline, programs can
questions identiﬁed and the decision re- stage of the roadmap by implementing
be structured to insure progressive value
sponsibilities clear, capture the critical projects and programs to create the new
from readiness to operation.
questions that are typically asked by each capabilities.
One last key to success is always
player to inform the decision. Work back-
critical: You will need people with deep
5. Establish measures and metrics for
wards to identify the analyses that might
expertise in marketing and marketing
program success, and for managing
be done to answer the questions, and the analysis, and a strong data management
roll-out. For each stage, determine the
data needed to perform those analyses. competency. You need access to real-life
measures of success by which the effort
Articulate a vision for the ideal end- experience in applying data tools and
will be managed and judged. Along with the
state process and identify gaps vs. the technology to the unique demands of
end state business goals, in-process met-
current state. Are the required data sets marketing. And you will need help with
rics should be set for deployment readi-
available? Are the analyses being conduct- process design and training to best take
ness, roll out, adoption and compliance.
ed? Are they being delivered in a timely advantage of the new analytic capabilities
Because the steps in developing
way so that they can impact the decision as they become available.
these sorts of programs are often sequen-
process? Through this process, identify With that kind of support in place,
tial, it’s important to ensure that each
gaps in process, data, and analytics, and and the appropriate organizational com-
successive step has been adopted across
important barriers to closing the gaps. mitment, you can establish a marketing
the full organization and that the true ef-
effectiveness capability that is a true
3. Set realistic goals. With a current- fectiveness is gauged before moving for-
competitive advantage. ■
state assessment complete and gaps ex- ward. All programs are plans, and as such,
posed, organizations can often become
quite aspirational. When they have iden-
tiﬁed signiﬁcant opportunities for im-
provement, they may want to address all EVPs John Nardone and Ed See lead MMA’s Avista line, a
the issues at once and leap directly to a new line of consulting, analytic and online services that go be-
fully developed ideal state. yond ROI measurement to provide on-demand marketing decision
Unfortunately, this is rarely possible. support.
Marketing organizations have to build Mr. Nardone’s experience includes brand management roles
capabilities in an orderly way, and many at P&G and Pepsico, and pioneering internet marketing and CRM
development steps will have signiﬁcant efforts at Modem Media. Mr. See led major software development
prerequisites that cannot be leap-frogged. efforts for IBM, and led business transformation practices as a
It is critical to set clear and reachable Partner at Andersen Business Consulting and as a Global Manag-
short-term goals, while working toward ing Director at BearingPoint.
a more comprehensive, long-term vision. Avista by MMA leverages an integrated marketing database,
Roadmap a series of progressive custom-built econometric models and analytic reports to im-
milestones or stages and articulate the prove decisions on strategy, plan development, and ongoing pro-
anticipated costs and beneﬁts of achiev- gram management. Avista Consulting and Avista Data Solutions
ing each goal state. Each step should have insure that marketers have the right organization, process and
explicit business value so that if the ef- data to achieve their marketing effectiveness goals. For further
fort never progresses beyond that stage, information, please visit www.mma.com
the effort stands on its own merit. Be