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- 2. 2 “Half the money I spend on advertising is wasted; the trouble is I don't know which half.”
- 3. John Wanamaker (1838- 1922): 3 “Half the money I spend on advertising is wasted; the trouble is I don't know which half.”
- 4. 4 “Corporate marketing is the last bastion of unaccountable spending in corporate America.”
- 5. Eric Schmidt (2006): 5 “Corporate marketing is the last bastion of unaccountable spending in corporate America.”
- 6. Marketing Productivity Analysis 6 “The use of productivity measurement in relation marketing function is relatively new. The central marketing can be expressed as the management consumer demand and the translation of this sales and profits. Marketing productivity analysis important tool in evaluating the performance of marketing department in carrying out this role. It the efficiency with which marketing inputs are generate target levels of marketing outputs.”
- 7. Marketing Productivity Analysis 7 “The use of productivity measurement in relation marketing function is relatively new. The central marketing can be expressed as the management of demand and the translation of this demand into profits. Marketing productivity analysis is an evaluating the performance of the marketing carrying out this role. It measures the efficiency marketing inputs are used to generate target levels marketing outputs.” Thomas, Michael J. (1984) “The Meaning of Marketing Productivity
- 8. Effective vs. Efficient: The Difference? 8
- 9. Effective vs. Efficient: The Difference? 9 Effective (adj.): Adequate to accomplish a purpose; producing the intended or expected result. Efficient (adj.): Performing or functioning in the best possible manner with the least waste of time and effort.
- 10. “Measuring Marketing Productivity” 10 Rust et al. (2004)
- 11. “Metrics for Making Marketing Matter” 11 Lehmann (2004)
- 12. 12 Framework for Marketing Performance Measurement Adapted from Lehmann and Reibstein (2006) What marketers and competitors do • Advertising • Price • Promotions • Distribution What customers think & feel Awareness Consideration Liking What customers do Brand purchases Direct Effect Feedback Effect
- 13. 13 Advertising Campaign Testing Adapted from Lehmann and Reibstein (2006) What marketers and competitors do • Advertising • Price • Promotions • Distribution What customers think & feel Awareness Consideration Liking What customers do Brand purchases Direct Effect Feedback Effect
- 14. 14 Brand Health Tracking Adapted from Lehmann and Reibstein (2006) What marketers and competitors do • Advertising • Price • Promotions • Distribution What customers think & feel Awareness Consideration Liking What customers do Brand purchases Direct Effect Feedback Effect
- 15. 15 Marketing Mix Modeling Adapted from Lehmann and Reibstein (2006) What marketers and competitors do • Advertising • Price • Promotions • Distribution What customers think & feel Awareness Consideration Liking What customers do Brand purchases Direct Effect Feedback Effect
- 16. 16 M5: Mindset Metrics and Marketing Mix Modeling Adapted from Lehmann and Reibstein (2006) What marketers and competitors do • Advertising • Price • Promotions • Distribution What customers think & feel Awareness Consideration Liking What customers do Brand purchases Direct Effect Feedback Effect
- 17. Return on Marketing Investment: Rearview Mirror Marketing ROI Marketing Expenditure Marketing Support Incremental Contribution Incremental Volume Costs Margins Model
- 18. Return on Marketing Investment: Front Dash Marginal Marketing ROI Marginal Expenditure Marketing Support Marginal Contribution Incremental Volume Costs Margins Model
- 19. A BRIEF HISTORY OF MARKETING MIX MODELING
- 20. It all began with… What do these three things have in common? (first drink is on me if you can guess!)
- 21. The Answer: SIR FRANCIS GALTON anthropologist, eugenicist, tropical explorer, geographer, inventor, meteorologist, proto-geneticist,
- 22. 1875: Is This Really Marketing Mix? 2 4 6 8 10 12 14 16 18 2 4 6 8 10 12 14 16 18 Galton’s work on inherited characteristics of sweet peas led to the initial conceptualization of linear
- 23. The First 100 Years 1875 Regression conceptualiz ed
- 24. The Birth of Data 1875 Regression conceptualiz ed 1923 A.C. Nielsen Company Founded
- 25. The Nielsen Factor Pioneer in Data Collection • Inaugurated a National Radio Index for broadcasters and advertisers in 1942 • Followed by a television ratings service in 1950 • Once TV ratings were available, people starting experimenting 25
- 26. Advertising, Goodwill and Demand 1875 Regression conceptualiz ed 1923 A.C. Nielsen Company Founded 1957 1962 Vidale/Wolfe observe relationship between sales and advertising Arrow/Nerlo ve Formalize Adstock Dorfma n/Steine r Theroe m
- 27. First Marketing Mix Model 1875 Regression conceptualiz ed 1923 A.C. Nielsen Company Founded 1957 1962 Arrow/Nerlo ve Formalize Adstock 1975 Little/Lodish Media Planning Calculus MDS Founded (1969) Little BRAND AID Marketi ng Mix Model Dorfma n/Steine r Theroe m Vidale/Wolfe observe relationship between sales and advertising
- 28. Advertising has a Carryover Effect 1875 Regression conceptualiz ed 1923 A.C. Nielsen Company Founded 1957 1962 1975 1979 Little BRAND AID Marketi ng Mix Model Broadbent Popularize s Adtsock Arrow/Nerlo ve Formalize Adstock Little/Lodish Media Planning Calculus MDS Founded (1969) Dorfma n/Steine r Theroe m Vidale/Wolfe observe relationship between sales and advertising
- 29. Two Dimensions of Adstock 29 Advertising Lag (Decayed Effect) Advertising Saturation (Diminishing Returns Effect)
- 30. Ten Years After 30 1980 IRI Found ed Nielsen Launches Home Video Index Guadagni/Lit tle Logit Mix Model 1983 1985 1986 1987 1989 IRI Acquire s MDS Duke’s Marketing Workbenc h IRI’s Infoscan Introduc ed MMA Founded Blattberg/Wisnie wski How Promotions Work
- 31. Marketing Mix Models – Before the Internet 31 TV x Print Radio Trade Sales
- 32. The Next 10 Years 32 1990 1999 10 Marketing Mix Modeling firms founded; numerous consultants and ad agencies start ROMI practices So what happened next?
- 34. MMM in a Digital World 34 Business Impact Direct Business Performance Sales & Trade Promotions Business Impact Marketing Paid Search Impressions Online Display Paid Search Clicks Social Media Search Volume Search Volume Indirect Business Impact Sales