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Measuring your Marketing Effectiveness for Budget setting public

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Measuring your Marketing Effectiveness for Budget setting public

  1. 1. Paul Laughlin, Managing Director, Laughlin Consultancy @LaughlinPaul Actionable Budget Marketing Strategy #MSMS2015 © Laughlin Consultancy Ltd, not to be used without permission.
  2. 2. Klondike Goldrush © Laughlin Consultancy Ltd, not to be used without permission.
  3. 3. Klondike Goldrush © Laughlin Consultancy Ltd, not to be used without permission.
  4. 4. Our digital goldrush ❖ How many Twitter Followers? ❖ How many Facebook Fans/Likes? ❖ Has your video ‘gone viral’ on YouTube? ❖ How many downloads of your latest app? ❖ How many site/blog visits? ❖ How many people saw your commercial? ❖ Are we being recommended? © Laughlin Consultancy Ltd, not to be used without permission.
  5. 5. What a business should measure ❖ Turnover is vanity… ❖ . . . Profit is sanity ❖ Return On Investment © Laughlin Consultancy Ltd, not to be used without permission.
  6. 6. Simple case SalesRevenue&MarketingCost(£) Marketing Spend (£) Sales Revenue Marketing Cost Base level of sales
  7. 7. SalesRevenue&MarketingCost(£) Marketing Spend (£) Sales Revenue Marketing Cost Base level of sales Revenue - Marketing Cost Net revenue view Value destroying Marketing
  8. 8. Revenue&Costs(£) Marketing Spend (£) Net Revenue (Revenue - Marketing Spend) Fixed & Variable costs Limitations of Net Revenue Profitable Marketing Loss-making Marketing
  9. 9. ROME © Laughlin Consultancy Ltd, not to be used without permission. ROME = ( Δ∆Revenue – Δ∆Costs) / Δ∆Marketing Spend From “Marketing Payback” Robert Shaw & David Merrick:
  10. 10. Two types of Marketing © Laughlin Consultancy Ltd, not to be used without permission. • Brand building • Awareness & Consideration • Maintaining Share of Voice • Social can be both (from LinkedIn ads to broadcast YouTube) ATL BTL • Targeted communications • Personalised & timed • Driving action, often to buy
  11. 11. Econometrics for ATL © Laughlin Consultancy Ltd, not to be used without permission. • Statistical technique(s) to help assess which of many possible factors are key drivers of sales results, combine them in a quantitative model and then use to predict the future • Business input needed on factors • Establish Base • Allow for ad-stock • Evaluate ‘halo effects’
  12. 12. Experimental Method for BTL © Laughlin Consultancy Ltd, not to be used without permission. Response' Data' (all'channels)' Contact' History' F2F/Service' Call'Centre' Website' Outbound' eMail/DM' Social' STEP'1' Data$Gathering$ STEP'2' Matching$Back$ Response' Contact' History' STEP'3' Considering$ rela5onship$ and$other$ drivers$ Brand$ Rela5onship$ Learning$from$ Econometrics$ Marketing attribution includes considering multi-media attribution & multi-channel view of value Targeted$$ +$ Contacted$ Untargeted$ +$ Contacted$ Targeted$$ +$Not$ Contacted$ Untargeted$ +$Not$ Contacted$
  13. 13. You need insight Customer Data Customer Research Customer Analysis Database Marketing Feel & Measure Target Marketing Converge Evidence © Laughlin Consultancy Ltd, not to be used without permission.
  14. 14. Marketing Attribution © Laughlin Consultancy Ltd, not to be used without permission. Incremental Modelled Financial Reporting Market Position Media Tracking
  15. 15. Budget Allocation step 1 ❖ Annual Marketing budget setting often done by: ❖ functional unit allocation ❖ share of revenue allocation ❖ share of voice allocation © Laughlin Consultancy Ltd, not to be used without permission. ❖ More important to ‘rightsize’ the budget ❖ Optimising ROME not qualitative metrics
  16. 16. Budget Allocation step 2 ❖ Optimal allocation across: ❖ Products/Markets ❖ Brands ❖ Purchase Funnel © Laughlin Consultancy Ltd, not to be used without permission. ❖ Compare ROME contributions of each ‘cube’ ❖ Consider evidence for media interdependencies
  17. 17. Positive Case Study
  18. 18. Diageo Marketing Measurement Impact on the Consumer Low High ROI(5year) 100% -100% Brand A Brand B Brand C TV Print Digital TV Print Digital TV Print Digital GB ————— DOWN Ireland UP Spain France Portugal UP NEW NEW Greece Australia South Africa Mexico DOWN UP Proven Effective Not yet proven Judged Effective Unsatisfactory (ineffective) 1. Dogs and Stars chart 2. Advertising effectiveness by brand
  19. 19. Credibility requires Accountability ❖ Use the language of profit ❖ Use ROME with Finance ❖ Converge attribution evidence ❖ Rigorous budget allocation © Laughlin Consultancy Ltd, not to be used without permission.
  20. 20. linkedin.com/in/paullaughlin paul@laughlinconsultancy.com +44 (0)7446 958061 Contacting me: customerinsightleader.com laughlinconsultancy.com @LaughlinPaul © Laughlin Consultancy Ltd, not to be used without permission.

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