ThinkVine Boosting Media Value


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The presentation describes ThinkVine's digital media strategy.

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ThinkVine Boosting Media Value

  1. 1. A  Breakthrough  Approach     to  Marke0ng  Mix  Op0misa0on    in  Today’s  Consumer-­‐driven  World     4  October  2012   ©  ThinkVine.    All  Rights  Reserved.  
  2. 2. The  Marketplace  is  Changing  Rapidly     More     More   diversity                   fragmented   among   media   consumers   consump0on   More                       More   marke0ng   ways     op0ons   to  buy     ©  ThinkVine.    All  Rights  Reserved.  
  3. 3. The  Demand  for  Marke0ng  Accountability  is  Rapidly  Increasing   “Corporate  marke,ng  is                                 the  last  bas,on  of   unaccountable  spending.”   -­‐  Google  Chairman   Eric  Schmidt     ©  ThinkVine.    All  Rights  Reserved.   3  
  4. 4. The  Changes  are  Crea0ng  New  Challenges  for  Marketers   What  size   How  do  we   budget  do     best  allocate   we  need?   the  budget?   How  do  we   What  are  the   efficiently   short-­‐  and   …   reach  target   long-­‐term   segments?   effects?   ©  ThinkVine.    All  Rights  Reserved.  
  5. 5. Marketers  Are  Struggling  to  Meet  the  Challenges   65%   of  CMOs  told  IBM  they  are   54%     of  marke9ng  execs  told  BCG         “underprepared”  for  the  growth   they  do  not  have  the  tools   in  channel  &  device  choices,  63%   required  to  make  trade-­‐offs   said  it  for  demographic  shiOs   across  media  vehicles       >50%   picked  “measurement,  analysis   9%   of  marke9ng  execs  informed               and  learning”  and  “integra9ng   the  CMO  Council  that  they                   cross-­‐channel  marke9ng”  as  #1   have  a  highly  evolved,                                 and  #2  challenges  in  a  Unica  poll     integrated  marke9ng  model       ©  ThinkVine.    All  Rights  Reserved.  
  6. 6. A  Revolu0on  in  Marke0ng  is  Underway     Planning   From  Annual  to  Agile   Branding  &   From  Mass  to  Engaged   Communica0on   Execu0on   From  Siloed  to  Integrated   Analysis   From  Historical  to  Forward-­‐Looking   Organiza0onal   From  Cabals  to  Collabora0ves   Behaviour   ©  ThinkVine.    All  Rights  Reserved.   6  
  7. 7. A  ThinkVine  Marke0ng  Mux  Op0misa0on  Success  Story     •  Business  Goals   •  Acquire  new  customers  with  high  life9me  value   Financial   •  Find  the  op9mal  spend  level  and  the  ROI  of  tac9cs   Services   •  Discoveries     •  Using  ThinkVine  soOware  the  company  discovered   •  A  significant  shiO  from  tradi9onal  media  to  digital  would  meet  goals   •  The  effect  of  each  marke9ng  tac9c  on  acquisi9on  volume  and  its  ROI   •  The  likely  effects  of  new  marke9ng  tac9cs  at  scale   •  The  shiO  to  digital  would  affect  brand  awareness  in  future  years   •  Ac0ons   •  Made  shiO  to  digital,  beat  customer  acquisi9on  targets  in  first  year   •  Adjusted  mix  in  second  year  to  beXer  balance  short-­‐  and  long-­‐term     •  Began  integra9ng  detailed  digital  data  into  planning   ©  ThinkVine.    All  Rights  Reserved.   7  
  8. 8. Marke0ng  Mix  Today   Op0misa0on  Requirements   •  Agile    What  people   •  Accurate,  objec9ve  historical   Value  people   want   analysis  and,  more  importantly,   receive   forecasts  of  “Boardroom  Metrics”   Analyse  the                 Measure     •  Volume,  Sales,  ROI,  CLTV,  etc.   past,  present              Marke9ng  ROI   •  AXribu9on   and  future     •  Mul9dimensional  views   Forecast     •  All  marke9ng  tac9cs   Sharing  business   marke9ng     •  Consumer  segments   insights  across     outcomes   •  Geographies   the  enterprise   •  Reliable,  ac9onable  informa9on   Analyse     •  Collabora9ve  process   Achieving  goals     impact  across     •  Flexible  and  up-­‐to-­‐date  models   with  rela9vely     channels   •  Low  total  cost  of  ownership   low  investment   ©  ThinkVine.    All  Rights  Reserved.   8  
  9. 9. Marke0ng  Mix  Op0misa0on  Op0ons   Regression-­‐based  Mix   Agent-­‐based  Mix   ©  ThinkVine.    All  Rights  Reserved.   9  
  10. 10. Marke0ng  Mix  Op0misa0on  Op0ons   Regression-­‐based  Mix   Mathema9cal  approach.  Consultant/agency   or  internal  teams  do  as  a  project.  Technical   capabili9es  and  marke9ng  exper9se  vary  by   company  and  analyst   Historical  analysis  with  some  granularity   “teased  out”  of  the  top-­‐down  model.  Only   “sees”  large  amounts  and  variances   Forecasts  extend  history.  Validity  is  bounded   by  %  change.  Granularity  is  oOen  constrained.   No  consumers  or  new  tac9cs  in  the  forecast   Forecasts  are  typically  one  number.  Accuracy   has  a  short  half-­‐life   Fixed  form  equa9ons,  changes  are  effec9vely   new  projects   No  collabora9on  capability.  No  saved  plans,   typically  no  saved  forecasts   5-­‐6  figure  project  price  plus  add-­‐on  for   simulators  and  updates   ©  ThinkVine.    All  Rights  Reserved.   10  
  11. 11. Marke0ng  Mix  Op0misa0on  Op0ons   Regression-­‐based  Mix   Agent-­‐based  Mix  (ThinkVine)   Mathema9cal  approach.  Consultant/agency   Complex  systems  approach  newly  applied  to   or  internal  teams  do  as  a  project.  Technical   marke9ng  by  using  data  about  consumer   capabili9es  and  marke9ng  exper9se  vary  by   behaviour.  The  soOware’s  simula9on  capability   company  and  analyst   and  the  marke9ng  exper9se  vary  by  company   Historical  analysis  with  some  granularity   Historical  analysis  with  significant  granularity  for   “teased  out”  of  the  top-­‐down  model.  Only   all  types  of  marke9ng  developed  boXom-­‐up,   “sees”  large  amounts  and  variances   including  on-­‐line  and  off-­‐line  aXribu9on   Forecasts  extend  history.  Validity  is  bounded   Forecasts  via  forward-­‐looking  scenarios  that   by  %  change.  Granularity  is  oOen  constrained.   make  extensive  use  of  custom  consumer   No  consumers  or  new  tac9cs  in  the  forecast   response  data  for  all  marke9ng  types  and  levels   Forecasts  are  typically  one  number.  Accuracy   Forecasts  are  mul9-­‐dimensional  with  significant   has  a  short  half-­‐life   granularity.  High  accuracy  over  long  periods   Fixed  form  equa9ons,  changes  are  effec9vely   Ongoing  data  updates,  periodic  recalibra9on  if   new  projects   needed  as  part  of  subscrip9on   No  collabora9on  capability.  No  saved  plans,   Built-­‐in  collabora9on  func9onality.  Plans  and   typically  no  saved  forecasts   forecasts  are  saved  in  the  soOware   5-­‐6  figure  project  price  plus  add-­‐on  for   5-­‐6  figure  annual  subscrip9on  fee   simulators  and  updates   ©  ThinkVine.    All  Rights  Reserved.   11  
  12. 12. Organiza0onal  Profiles  Influence  the  Decision  Regression-­‐based  Mix   Agent-­‐based  Mix  •  Familiarity  with  regression  is   •  Organiza9on  is  open  to  change,  uses   important  to  organiza9on   analy9cs  for  compe99ve  advantage  •  Marketplace  is  changing  slowly   •  Marketplace  is  changing  rapidly  •  Only  use  a  few  types  of  marke9ng,   •  Use  many  types  of  marke9ng,   don’t  plan  to  try  new  things   experimen9ng  with  new  things  •  Limited  or  no  segmenta9on   •  Segmenta9on  is  important  •  Minimal  compe99on   •  Ac9ve  compe99on  •  Plans  are  made  once  per  year  and   •  Plans  are  updated  throughout  the   rarely  adjusted   year  based  on  results  •  Collabora9on  with  &/or  second   •  Collabora9on  with  &/or  second   opinion  of  agency  isn’t  important   opinion  of  agency  is  important  •  Okay  with  9me  lag  for  new  projects   •  Want  to  run  scenarios  themselves     to  get  updates   •  Want  to  synchronize  and  integrate  •  Internal  or  low-­‐cost  source   planning  and  execu9on   ©  ThinkVine.    All  Rights  Reserved.   12  
  13. 13. Mix  and  Digital  Cross-­‐Channel  Adribu0on  Have  Different  Roles     ThinkVine  MMO   Digital  X-­‐Channel  Adribu0on   Focus   Strategic  planning   Tac9cal  execu9on   Objec0ve   Marke9ng  budget  op9miza9on   Campaign  conversion  op9miza9on   Emphasis   Achieve  key  goals   Realize  incremental  gains   Method   Effec9veness  via  behaviour  simula9on   Efficiency  via  itera9ve  execu9on   Forecasts   Short-­‐  and  long-­‐term  sales  forecasts   2-­‐8  week  campaign  forecast   Breadth  across  all  tac9cs,  consumer   Advantages   Depth  within  digital   segments  and  channels   ThinkVine  can  integrate  detailed  digital  (and  social,  etc.)  data  to                                         create  a  “virtuous  circle”  that  improves  both  planning  and  execu,on     ©  ThinkVine.    All  Rights  Reserved.   13  
  14. 14. A  ThinkVine  Marke0ng  Mix  Op0misa0on  Success  Story   •  Business  Goals   •  Increase  market  share  in  very  compe99ve  category   Consumer   •  Reverse  decline  in  brand  awareness   Services   •  Discoveries     •  Using  ThinkVine  soOware  the  company  discovered   •  Erosion  in  brand  recogni9on  was  crea9ng  an  ever-­‐higher  hill  to  climb   •  Compe9tor’s  television  blitz  had  further  eroded  brand  recogni9on   •  The  right  budget  level,  mix  and  9ming  could  quickly  pay  back   •  Ac0ons   •  Won  Board  approval  to  increase  and  shiO  budget   •  Increased  television  adver9sing  focused  on  innova9on  with   corresponding  digital  content  to  facilitate  path-­‐to-­‐ac9on   •  Achieved  objec9ves  within  six  months,  got  “second  tranche”  funding   •  Began  digging  deeper  into  the  effects  of  pricing  in  the  mix   ©  ThinkVine.    All  Rights  Reserved.   14  
  15. 15. ThinkVine  Marke0ng  Mix  Op0misa0on  Sogware  Agent-­‐based  Modelling  (ABM)  Overview   “Regression  wasn’t  invented  for  marke,ng  mix;  it  was  applied  to  it.”   Is  agent-­‐based  modelling  new?   ABM  has  been  around  since  the  1940’s   with  roots  in  the  hard  sciences   Very  good  at  understanding  how  many   moving  parts  influence  an  outcome   Used  extensively  by  Boeing,  WHO,  DoT   ©  ThinkVine.    All  Rights  Reserved.   15  
  16. 16. ThinkVine  Marke0ng  Mix  Op0misa0on  Sogware  Agent-­‐based  Modelling  (ABM)  Overview   Why  hasn’t  agent-­‐based  modelling  been   applied  to  marke9ng  un9l  now?   Lack  of  need  –  yesterday’s  marketplace   was  less  complex,  more  homogeneous   Lack  of  compu9ng  power  –  simula9ons   are  computa9onally  intensive  to  run   Lack  of  data  &  applied  IP  –  about   consumer  response  to  marke9ng   “ThinkVine’s  marke,ng  mix  op,misa,on  soJware  harnesses  the  advantages  and                  advancements  of  ABM  to  address  the  growing  complexity  in  today’s  marke,ng  landscape.”   ©  ThinkVine.    All  Rights  Reserved.   16  
  17. 17. ThinkVine’s  Sogware:  “Sim  City  for  CMOs”     ThinkVine’s  marke9ng  mix  op9misa9on  soOware  enables  you  to  simulate  the  •    results  of  your  marke9ng  plans  in  a  marketplace  where  a  representa9ve     popula9on  of  simulated  people  consume  media  and  purchase  products  the            way  real  people  do                                             Sales   Marke0ng  Ac0vi0es     •  It  combines  demographic,  consumer  behavior  and  market  data  with  your  data   and  advanced  analy9cs  to  deliver  the  forward-­‐looking  informa9on  you  need  to   maximize  results  –  accurate  forecasts  with  rich,  mul9dimensional  informa9on   by  consumer  group,  type  of  marke9ng,  product,  channel  and  geography   ©  ThinkVine.    All  Rights  Reserved.   17  
  18. 18. Find  the  Op0mal  Investment  Level  to  Meet  Your  Objec0ves   ROI  and  Gross  Margin  by  Total  Marke0ng  Investment   Max  ROI   2011   What  If?   $100  MM   $145  MM   Spent   Budget       Max  Margin       What  If?       $300  MM   Budget        •  The  soOware  enables  your  team  to  easily  run  “What  If?”  scenarios.  You  can  find   the  op9mal  investment  levels  to  meet  various  strategic  and  tac9cal  objec9ves.     ©  ThinkVine.    All  Rights  Reserved.   18  
  19. 19. Iden0fy  the  Marke0ng  Plan  Most  Likely  to  Deliver  the  Best  Results   Comparison  of  2012  Marke0ng  Plan  Alterna0ves   +8.8%   185   +4.7%   +2.9%   Units  (MM)   +1.8%   178   -­‐1.2%   175   173   170   168     2012   2012   2011   2012   2012   2012   $180  MM   $185  MM   $180  MM   $180  MM    $175  MM   $180  MM   Budget   Budget   Spent   Budget   Budget   Budget               Shig  $5  MM   Shig  $5  MM     Same  Mix         Cut  $5  MM     Shig  $5  MM   Print  to   Print  to  Digital     as  2011   in  Print   Print  to  TV   Digital   Add  $5  MM  TV    •  The  soOware  enables  fast,  objec9ve  comparisons  of  marke9ng  plan  alterna9ves.                   You  can  vary  spending  levels,  9ming,  mix  of  tac9cs  and  consumer  groups  targeted.     ©  ThinkVine.    All  Rights  Reserved.   19  
  20. 20. Discover  Which  Marke0ng  Tac0cs  Will  Yield  High  ROI   ROI  by  Type  of  Marke0ng  Ac0vity  •  The  soOware  analyses  and  predicts  how  marke9ng  tac9cs  influence  purchases.        •  You  see  granular  informa9on  about  how  each  performs  in  the  context  of  the  overall  plan.     ©  ThinkVine.    All  Rights  Reserved.   20  
  21. 21. Learn  What  Works  Best  by  Consumer  Segment     Marke0ng  Tac0c  Effec0veness  By  Consumer  Group  50+  Affluent   TV   50+  Other   Radio   Print  <30  Affluent   Digital  Ads   Search   Other  <30   Mobile   0%   10%   20%   30%   40%   50%   60%   •  The  soOware  reveals  how  well  marke9ng  tac9cs  work  alone  and  in  combina9on  by   consumer  group.  You  can  tune  your  mix  to  efficiently  reach  segments  you  target.     ©  ThinkVine.    All  Rights  Reserved.   21  
  22. 22. Understand  the  Short-­‐  and  Long-­‐Term  Value  of  Marke0ng   Effect  of  Proposed  Marke0ng  Plans  By  Year   160   140   19%   “Brand  value”   120   22%   25%   100   2014  Plan   Units  (MM)   26%   28%   80   2013  Plan   18%   74%   81%   2012  Plan   60   Base   50%   78%   Pre-­‐2012  Base   Base   38%   40   20   0   2012   2013   2014  •  The  soOware  forecasts  current  and  future  year  effects  of  marke9ng  plans.  You  can   see  the  cumula9ve  value  of  new  marke9ng  strategies  and  ini9a9ves.     ©  ThinkVine.    All  Rights  Reserved.   22  
  23. 23. Forecast  Results  of  New  Marke0ng  Ini0a0ves   Planned  Marke0ng  Mix   Proposed  Mix  with  Mobile  Added       Mass  Media   Mass  Media   67%   61%   Promo0ons   11%   Digital   Promo0ons   Mobile   22%   11%   Digital   6%   22%  Unit  Sales  Forecast   2012  Original   2012  Add  Mobile   %  Change   Total  Units  (‘000s)   36,928   38,109   3%   •  The  soOware  provides  informa9on  about  the  likely  value  of  all  marke9ng  tac9cs,   including  tac9cs  not  used  before.  You  understand  the  poten9al  before  you  invest.     ©  ThinkVine.    All  Rights  Reserved.   23  
  24. 24. ThinkVine  Marke0ng  Mix  Op0misa0on  Sogware  Our  Approach  ThinkVine  replicates  reality  by  crea9ng  a  custom,  simulated  marketplace  in  which    you  can  measure  purchase  behaviour  across  consumers  and  by  marke9ng  ac9vity. 1 Build  Agent  Popula0on   Consumer  agents  are  configured  to  be  highly  representa9ve   of  a  popula9on  using  demographic  and  media  consump9on  data.   2 Add  Customer  Data   The  agents’  behaviour  is  informed  by  customer-­‐supplied  data   about  the  category,  the  product,  pricing,  marke9ng  ac9vity,  etc.   3 Create  Market  Model   ThinkVine’s  experts  develop  a  custom  model  in  which  the  agents  respond   to  marke9ng  ac9vity  and  make  purchases  within  the  category  in  a  realis9c  way.   4 Ongoing  Planning   The  soOware  enables  marketers  to  quickly  and  easily  run  scenarios  in  a  frequently   updated  marketplace  and  get  a  rich,  objec9ve  set  of  decision-­‐making  informa9on.   ©  ThinkVine.    All  Rights  Reserved.   24  
  25. 25.  Building  an  Agent  Popula0onDemographics   Sample  Consumer   Male    47  Years  Old   Caucasian   Income,  $110,000  /  yr.  •  We  mathema9cally  recreate  a  representa9ve  popula9on  of  target  markets  by   sta9s9cally  drawing  from  empirical  distribu9ons  of  many  variables  •  Targe9ng  variables  include  geography,  income,  age,  ethnicity,  etc.   ©  ThinkVine.    All  Rights  Reserved.   25  
  26. 26.  Building  an  Agent  Popula0on  Media  Consump0on  •  We  assign  the  agents  media   #  of  minutes  watching  television  per  day   consump9on  behavior  by   tapping  a  variety  of  widely-­‐ accepted  sources  of  consumer   behaviour  data    •  We  use  patent-­‐pending  IP  to   #  of  minutes  using  social  media  per  day   sample  from  these  known   distribu9ons  and  assign  media   exposure  probabili9es  •  As  a  result,  some  agents  watch   a  lot  of  television  (and  have   #  of  minutes  shopping  online  per  day   higher  exposure  probabili9es)   while  others  will  watch  liXle  to   no  television  (and  have  lower   probabili9es)   ©  ThinkVine.    All  Rights  Reserved.   26  
  27. 27.  Building  an  Agent  Popula0on  Consumer  Agents  •  The  soOware  now  contains  a  marketplace  of  agents  that  is  representa9ve  of  the   consumers  in  your  marketplace  •  It  also  contains  marke9ng  science-­‐based  rules  about  response  and  purchase  behaviour     ©  ThinkVine.    All  Rights  Reserved.   27  
  28. 28.  Adding  Customer  Data  ThinkVine  Marke0ng  Mix  Op0miza0on  Sogware:  Your  Data  Required  Data       Marke0ng  plans     Media,  promo9on,  marke9ng,  digital       Sales  data     Syndicated  data,  internal  sales  data         Enhance  &  Improve  Your  Results     Market  research  data     Segmenta9on,  price  elas9city,  exogenous  factors,  addi9onal  general   and  demographic-­‐based  media  consump9on  data,  etc.     ©  ThinkVine.    All  Rights  Reserved.   28  
  29. 29.  Adding  Customer  Data  Purchasing  Behavior  •  We  use  the  customer  data  to  configure  the  agents  so  their  purchase  behaviour   matches  how  consumers  actually  purchase  within  the  specific  category   Category   Purchase   Brand   Frequency   Awareness   4   ~90%   Purchase   Probability   ~20%   ©  ThinkVine.    All  Rights  Reserved.   29  
  30. 30. Crea0ng  the  Market  Model  A  “Bodom-­‐up”  Approach  That  Predicts  More  Accurately   1 Training  the  system   ThinkVine’s  analysts  develop  and  calibrate  a  custom  model  that  recreates  past  sales  from  the   “boXom  up”  by  establishing  consumer-­‐centric  rules  that  fit  historical  results.       2 Proving  the  system   Once  the  system  is  trained,  we  validate  it  by  comparing  the  most  recent  6  months  of  actual  sales   (“hold  out”  data  not  used  to  train  the  system)  to  a  simula9on  of  that  6  month  period.   3 Using  the  system   Once  the  model  has  been  calibrated  &  validated,  it  is  ready  to  accurately  forecast  future  sales   and  provide  rich  decision  support  informa9on  for  each  marke9ng  plan  and  “what  if”  scenario.     Train   Prove   Use   Calibra9on  using  demographic,  consump9on,  plan,  research    &  sales  data   Validate  with  hold  out  data   Forecasts   2  Years  Sales  History   1-­‐2  Quarters   Future   Simulated   Actual       ©  ThinkVine.    All  Rights  Reserved.   30  
  31. 31. ThinkVine  and  Partners  Deliver  Value  Quickly  and  Over  Time   Configura0on  &               Agile,  objec0ve  marke0ng  planning  &  op0misa0on   Ini0al  Guidance       •  Analysis  of  recent   •  Respond  quickly  to  market  and  budget  changes  by   marke9ng  ac9vity   running  “What  If?”  analyses  of  marke9ng  plans     •  Recommenda0ons  for   •  See  forecasts  with  rich  informa0on  by  consumer  group,   immediate  changes  in   marke9ng  tac9c,  channels  and  geography     the  marke9ng  mix     •  Iden0fy  new  opportuni0es  for  growth  and  savings       •  Accurate  forecasts   •  See  the  effects  of  media  you  haven’t  tried  before   •  Create  effec0ve,  efficient  integrated  plans  across  all   marke9ng  ac9vi9es   •  Receive  expert  ongoing  marke0ng  support   ©  ThinkVine.    All  Rights  Reserved.   31  
  32. 32. Sample  Screens:  Create  Scenarios  at  a  High-­‐level  or  In  Detail   High-­‐level   By  group  &  year   In  Detail   By  type  &  week   ©  ThinkVine.    All  Rights  Reserved.   32  
  33. 33. Sample  Screens:  Compare  Plans,  Review  by  Tac0c,  Segment,  Etc.   Compare  ROI                 of  plans,  filter   High-­‐level  results  by  9me,   By  group  &  year   segment,  etc.       Long-­‐term   effects  of  plans   “Due  to”  and   ROI  by  tac9c       and  segment     ©  ThinkVine.    All  Rights  Reserved.   33  
  34. 34. A  ThinkVine  Marke0ng  Mix  Op0misa0on  Success  Story   •  Business  Goals   •  Increase  market  share  while  maintaining  margins   Consumer   •  Improve  overall  marke9ng  ROI   Products   •  Discoveries     •  Based  on  recent  success  with  a  specific  consumer  group,  the  agency   recommended  doubling  the  targeted  radio  ads  at  mid-­‐year   •  Using  ThinkVine  soOware  the  company  discovered   •  Ads  drive  traffic  to  store,  but  in-­‐store  price  drives  purchase  decisions     •  The  marginal  return  from  more  ads  to  the  group  would  be  very  low   •  There  was  a  large  consumer  group  with  more  upside  poten9al   •  Ac0ons   •  Adjusted  its  marke9ng  mix  to  achieve  its  business  goals     •  Now  quan9fies  all  proposed  changes  via  planning  soOware   ©  ThinkVine.    All  Rights  Reserved.   34  
  35. 35. ThinkVines  marke9ng  mix  op9misa9on  soOware                                                                        provides  B2C  marketers  with  the  forward-­‐looking  informa9on  they  need    to   get  the  maximum  return  across  all  of  their  marke9ng  investments.     See  a  2  minute  video  overview  at   or  call   +1  513  842  5900   ©  ThinkVine.    All  Rights  Reserved.