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Leveraging data scientists and why content ROI

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Intelligent Content Conference
March 30, 2017
ROI is the benefit to an investor resulting from an investment of some resource. This session will provide you with a guide to having a conversation on the value of content marketing in relation to capital investment.

Key takeaways:
Discover Data Scientists: your new best friends
Found: The missing link between engagement and revenue
Content Marketing Platforms: their role in finding your very own unicorn

Published in: Marketing
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Leveraging data scientists and why content ROI

  1. 1. @katrina_neal • #intelcontent Leveraging Internal and External Data Scientists and why its key to content ROI Katrina Neal Content Marketing Evangelist, LinkedIn @katrina_neal @katrina_neal • #intelcontent
  2. 2. @TwitterHandle • #intelcontent AGENDA @katrina_neal • #intelcontent How to talk ROI for [content] marketing How to measure the value of your content marketing How to leverage internal and external data scientists The role of Content Marketing Platforms
  3. 3. @katrina_neal • #intelcontent
  4. 4. @katrina_neal • #intelcontent
  5. 5. @katrina_neal • #intelcontent
  6. 6. @katrina_neal • #intelcontent
  7. 7. @TwitterHandle • #intelcontent AGENDA @katrina_neal • #intelcontent How to talk ROI for marketing @TwitterHandle • #intelcontent
  8. 8. @katrina_neal • #intelcontent Return on Investment (ROI) is the benefit to an investor resulting from an investment of some resource. In this formula, "Gain from Investment” refers to the proceeds obtained from the sale of the investment of interest Return on Investment Gain from investment – Cost of investment Cost of investment = ROI
  9. 9. @katrina_neal • #intelcontent 65% of CEOs think marketers live in Marketing la-la land
  10. 10. @katrina_neal • #intelcontent For Return on Marketing Investment (ROMI) the two key metrics are incremental net profit generated from the activity (the financial return), Versus the cost of campaign (the investment). Measuring the incremental net profit requires deeper investigation. Return on Marketing Investment Incremental Net Profit Cost of Campaign = ROMI x 100%
  11. 11. @TwitterHandle • #intelcontent AGENDA @katrina_neal • #intelcontent To calculate ROMI you need • Cost of Campaign • Incremental Sales • Retailer Margin • Variable Cost per unit • http://romi.ipa.co.uk/index.php/calculator
  12. 12. @katrina_neal • #intelcontent
  13. 13. @katrina_neal • #intelcontent Calculate the revenue you generated Incremental sales units [A] = 18 courses Average price paid per unit [B] = £299 Value of incremental retail sales [C] = A x B Value of incremental retail sales [C] = £5,382 Step 1 Return on Marketing Investment Actual A Incremental sales volume (units) 18 B Average price paid per unit £299 C = A x B Value of incremental retail sales £5,382 D Retailer gross margin (%) 0% E = D x C Retailer cash margin (£) £0 F = C – E Incremental sales revenue to manufacturer £5,382 G Variable cost per unit £102 H = G x A Incremental variable costs £1,836 I = F – H Contribution margin from incremental sales £3,546 J = I ÷ F Contribution margin (%) 66% K Cost of campaign £300 L = I – K Net profit generated by campaign £3,246 M = L ÷ K x100 Return on marketing investment (ROMI) 1082%
  14. 14. @katrina_neal • #intelcontent Calculate the actual contribution you generated. To do this you must take into account the incremental COSTS incurred. Variable cost per course (unit) was £102 = [G] Incremental sales units [A] = 18 courses Incremental variable costs [H] = [G] x [A] Incremental variable costs = £1,836 Incremental revenue [F] £5,382 Incremental Costs [H] £ £1,836 Contribution Margin [I] = [F] – [H] Contribution margin [I] = £3,546 Step 2 Return on Marketing Investment Actual A Incremental sales volume (units) 18 B Average price paid per unit £299 C = A x B Value of incremental retail sales £5,382 D Retailer gross margin (%) 0% E = D x C Retailer cash margin (£) £0 F = C – E Incremental sales revenue to manufacturer £5,382 G Variable cost per unit £102 H = G x A Incremental variable costs £1,836 I = F – H Contribution margin from incremental sales £3,546 J = I ÷ F Contribution margin (%) 66% K Cost of campaign £300 L = I – K Net profit generated by campaign £3,246 M = L ÷ K x100 Return on marketing investment (ROMI) 1082%
  15. 15. @katrina_neal • #intelcontent Subtract the cost of the campaign to calculate the actual profit it generated Contribution margin [I] = £3,546 Cost of Campaign [K] = £300 Net Profit Generated [L] = Contribution Margin [I] – Cost of Campaign [K] Net Profit Generated [L] = £3,246 Step 3 Return on Marketing Investment Actual A Incremental sales volume (units) 18 B Average price paid per unit £299 C = A x B Value of incremental retail sales £5,382 D Retailer gross margin (%) 0% E = D x C Retailer cash margin (£) £0 F = C – E Incremental sales revenue to manufacturer £5,382 G Variable cost per unit £102 H = G x A Incremental variable costs £1,836 I = F – H Contribution margin from incremental sales £3,546 J = I ÷ F Contribution margin (%) 66% K Cost of campaign £300 L = I – K Net profit generated by campaign £3,246 M = L ÷ K x100 Return on marketing investment (ROMI) 1082%
  16. 16. @katrina_neal • #intelcontent The ROMI is presented as a percentage to show the ratio of profit from the investment Return on Marketing Investment (ROMI) = L F Net profit generated by campaign [L] £3,246 Cost of Campaign [K] £300 ROMI = 1082% Step 4 Return on Marketing Investment Actual A Incremental sales volume (units) 18 B Average price paid per unit £299 C = A x B Value of incremental retail sales £5,382 D Retailer gross margin (%) 0% E = D x C Retailer cash margin (£) £0 F = C – E Incremental sales revenue to manufacturer £5,382 G Variable cost per unit £102 H = G x A Incremental variable costs £1,836 I = F – H Contribution margin from incremental sales £3,546 J = I ÷ F Contribution margin (%) 66% K Cost of campaign £300 L = I – K Net profit generated by campaign £3,246 M = L ÷ K x100 Return on marketing investment (ROMI) 1082%
  17. 17. @TwitterHandle • #intelcontent AGENDA @katrina_neal • #intelcontent To Calculate ROMI you need • Cost of Campaign • Incremental Sales • Retailer Margin • Variable Cost per unit • http://romi.ipa.co.uk/index.php/calculator
  18. 18. @TwitterHandle • #intelcontent AGENDA @katrina_neal • #intelcontent how to measure the value of your content @TwitterHandle • #intelcontent
  19. 19. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Pipeline marketing is what you’re doing, while content marketing, inbound marketing, lead nurturing, and growth hacking are how you do it.
  20. 20. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Attribution Models • Single Touch • Multi touch • Full Path @katrina_neal • #intelcontent
  21. 21. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Attribution Models Linear Time decay U-shaped W-shaped Full path Custom/ Algorithmic First Touch Last Touch Lead conversion touch
  22. 22. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent B2B or B2C? How many channels do you use? Do you have a sales team? How long is your sales cycle Do you nurture opportunities?
  23. 23. @TwitterHandle • #intelcontent AGENDA @katrina_neal • #intelcontent Single Touch Attribution • First Touch • Lead Conversion touch • Last Touch @katrina_neal • #intelcontent
  24. 24. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent First Touch Attribution
  25. 25. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Lead Conversion Touch
  26. 26. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Last Touch Attribution
  27. 27. @TwitterHandle • #intelcontent AGENDA @katrina_neal • #intelcontent Multi Touch Attribution • Linear • Time decay • U-shaped • W-shaped • Full path • Custom @katrina_neal • #intelcontent
  28. 28. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent JavaScript Tracking Code
  29. 29. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Urchin Tracking Module (UTM) Parameters utm_source =Google utm_medium =CPC utm_campaign =spring_sale utm_content =logolink utm_term =scuba+diving Optional Simply tags you add to a URL - supported out of the box by Google Analytics
  30. 30. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Linear multi-touch attribution model Each touchpoint is assigned the same amount of revenue credit Calculate the percentage by dividing the whole value of 1 by the total number of touchpoints along your buying journey
  31. 31. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Time decay If the sales cycle isn’t short, the early moments may not considered to be very important more concern is often given to nurturing initiatives
  32. 32. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent U-shaped The U-shaped multi-touch attribution model focuses on two key touchpoints 40% each but 20% of the revenue kudos is divided across the moments in the middle that occur between those two stages
  33. 33. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent W-shaped W-shaped multi-touch attribution modelling is similar to U-shaped, but it includes an additional key touchpoint
  34. 34. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Full path The full-path marketing attribution model is one of the most sophisticated attribution models available. A full-path model also includes the post-opportunity stage marketing initiatives and it incorporates sales activities into the mix as well
  35. 35. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Custom A custom multi-touch attribution model is built upon the basis of the full-path attribution model.
  36. 36. @TwitterHandle • #intelcontent AGENDA @katrina_neal • #intelcontent How to leverage data scientists @TwitterHandle • #intelcontent
  37. 37. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Internal Data Scientists
  38. 38. @katrina_neal • #intelcontent “Today, as a data scientist, I can build data crunching machines with complex algorithms for a few dollars per hour”
  39. 39. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Found: The missing link between engagement and revenue
  40. 40. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Algorithmic Attribution
  41. 41. @katrina_neal • #intelcontent Q: What is the probability that an Engagement Activity would result in an SQL? Q: Which activities would result in a Return Visit? Content as seen through a Bayesian Network Arcs: showing higher probabilistic relationships Nodes: variables
  42. 42. @katrina_neal • #intelcontent
  43. 43. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent External Data Scientists
  44. 44. @katrina_neal • #intelcontent Project Bulletproof Gaurav Nihalani Adam Yinger Miguel Leano Alex Chen
  45. 45. @katrina_neal • #intelcontent Guide vs. e-book? We tested a Sponsored Update Headline with a Call To Action (CTA): Download “Guide” vs Download “e-book” “Guide” outperformed “e-book” 95% increase in Click Through Rate (CTR)
  46. 46. @katrina_neal • #intelcontent Register vs. Join? We tested a Sponsored Update Headline with a Call To Action (CTA): “Register” vs “Join” “Register” outperformed “Join” 165% increase in Click Through Rate (CTR)
  47. 47. @katrina_neal • #intelcontent Quotes vs. Stats? We tested a Sponsored Update Headline: “Quote” vs “Stats” “Quote” outperformed “Stat” 30% increase in Click Through Rate (CTR)
  48. 48. @katrina_neal • #intelcontent Objects vs. People? We tested a Sponsored Update Image: “[Professional] Person” vs “Object” “Person” outperformed “Object” 160% increase in Click Through Rate (CTR)
  49. 49. @katrina_neal • #intelcontent Inmail vs. Inmail + Sponsored Content? We did a multi channel test: “Inmail” vs “Inmail + Sponsored Content” “Inmail + Sponsored Content” outperformed “Inmail alone” 72% higher Click Through Rate (CTR)
  50. 50. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Be a champion for experimentation
  51. 51. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent How you can run a simple A/B experiment on LinkedIn
  52. 52. @katrina_neal • #intelcontent
  53. 53. @katrina_neal • #intelcontent https://business.linkedin.com/marketing-solutions/ads
  54. 54. @katrina_neal • #intelcontent
  55. 55. @TwitterHandle • #intelcontent AGENDA @katrina_neal • #intelcontent Step 1 • First, create a campaign that you want to promote. Customize the creative, bidding, budget, etc. then create an exact replica of that campaign as a second campaign. @katrina_neal • #intelcontent
  56. 56. @TwitterHandle • #intelcontent AGENDA @katrina_neal • #intelcontent Step 2 • Once you have two campaigns that are exactly alike in every way, change one variable - for example, the targeting, the image or the headline text • Run against the two different audiences for at least two weeks • After two weeks, use an A/B significance test to monitor the results. @katrina_neal • #intelcontent
  57. 57. @katrina_neal • #intelcontent
  58. 58. @katrina_neal • #intelcontent Variation A: Control (the unaltered, original version) Variation B: Treatment (the optimized version which you expect to perform better)
  59. 59. @katrina_neal • #intelcontent Source: getdatadriven.com/ ab-significance-test
  60. 60. @katrina_neal • #intelcontent splittestcalculator.com This calculator is based on the two-sided Chi-Square statistic with Yates Correction. This calculator uses a confidence level of 95%
  61. 61. @TwitterHandle • #intelcontent AGENDA @katrina_neal • #intelcontent Step 3 • Make sure to also keep track of your A/B tests over time. Finally, glean the results from all of your tests (or design a long-term experiment) to gain insights about your target audience and the success of your campaigns. @katrina_neal • #intelcontent
  62. 62. @katrina_neal • #intelcontent Variation A: Control (the unaltered, original version) + 48% Variation B: Treatment (the optimized version which you expect to perform better)
  63. 63. @katrina_neal • #intelcontent https://offers.hubspot.com/ an-introduction-to-ab- testing
  64. 64. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Content Marketing Platforms @TwitterHandle • #intelcontent
  65. 65. @katrina_neal • #intelcontent Q: What is the probability that an Engagement Activity would result in an SQL? Q: Which activities would result in a Return Visit?
  66. 66. @katrina_neal • #intelcontent Q: What is the probability that an Engagement Activity would result in an SQL? Q: Which activities would result in a Return Visit?
  67. 67. @TwitterHandle • #intelcontent@katrina_neal • #intelcontent Understand commercial language Champion the evolution of your content attribution models Leverage data scientists and carry out your own experiments Explore the potential of Content Marketing Platforms TAKEAWAYS
  68. 68. @katrina_neal • #intelcontent Leveraging Internal and External Data Scientists and why its key to content ROI Katrina Neal Content Marketing Evangelist, LinkedIn @katrina_neal @katrina_neal • #intelcontent

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