This is a case study pertinent to hospitals and multi-office medical and dental practices that will enable them to do smarter and more effective marketing through a marketing effectiveness measurement system

1. Measuring and
Growing the
ROI of
Marketing
for Medical &
Dental Practices
1

2. Agenda for today
1. The critical questions to address
2. Why are we here and what is the problem?
3. Brief introduction to marketing effectiveness measurement.
4. How to optimize marketing spend and maximize growth
5. Questions and discussion
2

3. Current Situation
• Marketing Waste: Estimates consistently show
that 40-60% of marketing spend is wasted
• Marketing Expense: Is often the largest line-
item expense on the balance sheet
• CMOs and CFOs: There has traditionally been
tension on matters of marketing accoutability
3

4. Some questions prompting need for measuring
marketing effectiveness and ROI
✓ What are the most effective marketing channels – TV, Radio, Outdoor, FSI’s, Print or Digital?
✓ What elements of my marketing investment are working and not working? Where is the
waste?
✓ What could we expect if we increased our marketing budget by $2 million and how should
we spend it?
✓ What has been the ROI of online/digital media versus traditional mass media?
✓ What is the impact on sales if we expand our offices across the country by 10%?
✓ What is the best way to allocate my marketing budget?
✓ What are the primary growth drivers for our sales?
4

5. Why are we here?
• Marketing budgets tend to be one of the largest line-item expenses on the
balance sheet. Understanding what you are getting for that is critical!
• Traditionally, there has tended to be no accountability for this expense.
What do we get from this investment? Is there payback?
• According to a study by Proxima Consulting in 2015, “up to 60% of global
marketing budgets are being wasted every single year!”. Finding this
wasted spend is essential to the health of your enterprise!
• According to a recent study by IBM with about 1700 global marketing
leaders, 63% of them believe that marketing ROI will be the most
important and critical measure of business and marketing success in the
next 3-5 years. Are you invested in your future success?
• The problem, however, is that only 16% of these marketers presently use
marketing ROI as a guide to their marketing investment decisions. Where
do you stand on this?
5

6. 6
1. Spend
on a new
marketing
initiative
3. Sales
increase by X
dollars and
Profit Increases
by Y%
Execute in Market
2. You take it
to the market
In the ideal world
But things are not that simple

7. The problem: Too many channels, fragmentation and
confusion
Sales
Competition
Weather
Service
Quality
7

8. …simply eye-balling historic media and sales data does not provide answers
8

9. 30
32
34
36
38
40
42
44
46
1000 1100 1200 1300 1400 1500 1600
Price
Sales
Sales and Retail Price
9
Correlations and Data Relationships
Correlation = -0.71
Econometrics is based on tested statistical relationships between marketing drivers
and sales. Statistical correlation, as shown below, is the basic foundation.

10. …econometrics (marketing-mix modeling) can help
A statistical technique used to identify and quantify the incremental contribution made by marketing
investments on sales & revenue
Sales
Macro-
Economic
Factors
Penetration
Of Office
Locations
Price
Owned &
Earned
Media
Promos/
Direct
Marketing
Patient
Satisfasction
Metrics
Paid Digital
Media (PPC,
Display)
Mass Media:
TV, Radio,
Print, OOH
10
Involves collecting
this data over time

11. 11
The long & winding road
of marketing & the steps
to Take

12. Key Deliverables from
Econometrics Projects
12

13. -200
0
200
400
600
800
1000
1200
1400
1600
1800
Oct-2010
Nov-2010
Dec-2010
Jan-2011
Feb-2011
Mar-2011
Apr-2011
May-2011
Jun-2011
Jul-2011
Aug-2011
Sep-2011
Oct-2011
Nov-2011
Dec-2011
Jan-2012
Feb-2012
Mar-2012
Apr-2012
May-2012
Jun-2012
Jul-2012
Aug-2012
Sep-2012
Oct-2012
Nov-2012
Dec-2012
Jan-2013
Feb-2013
Mar-2013
Apr-2013
May-2013
Jun-2013
Jul-2013
Aug-2013
Sep-2013
UnitsSold
Variance
Modelled Sales
Actual Sales
Forecast
R2 = 97.6% - This indicates a very high level of accuracy to the actual sales data.
Holdout R2 = 89.9% - This indicates fit for the forecast (holdout) test.
MAPE = 4.2% The average % variance between actual sales and fitted/predicted.
Step 1: Develop a highly predictive sales model
Develop a predictive model by mapping historic media activity (data) against sales. We deliberately
holdout 10-15% of the dataset to test for predictive accuracy. The premise and validity of our models
depends on validating predictive capabilities
13

14. 71.1
3.2
2.4
9.9
3.3
6.5
2.1
1.5
11.2
40.1
Total Incremental Sales Contributions for Company XYZ
Baseline Sales Paid.Digital-Search Paid.Digital-Display
Earned-Social.Brand-Experience Owned-Website/SEO Paid SpotTV
Paid Radio Paid Magazines Long-Term.Marketing Effect
14
Step 2: Overall media contribution to sales

15. Step 3: Marketing Variance: Drivers of Growth
-2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%
Office Market Penetration
Pricing
Baseline Sales
Owned-Website/SEO
Paid.Digital-Search
Paid.Digital-Display
Paid Magazines
Paid SpotTV
Paid Radio
Long-Term.Marketing Effect
GDP Effect (Macro Economy)
-2.0%
-1.9%
-1.0%
-0.4%
0.6%
1.3%
1.7%
1.9%
2.1%
2.5%
2.9%
Annual Variance Contribution
Below shows how company’s total 7.7% year-over-year growth is allocated across the marketing-mix
and how each element affected this growth and business performance
15

16. $1.16
$1.24
$1.34
$1.73
$3.17
$- $1.00 $2.00 $3.00 $4.00
Paid Radio
Paid Magazines
Paid SpotTV
Paid.Digital-Display
Paid.Digital-Search
ROI per Dollar Spend for Paid Media
ROI per Dollar Spend
16
Step 4: Returns by Paid Media Channel (ROI per $1 spent)
The critical step in improving marketing productivity is a precise understanding of
returns per invested dollar

17. Step 5: Total Marketing Response
168,000
168,500
169,000
169,500
170,000
170,500
171,000
171,500
172,000
172,500
173,000
£- £1,000,000 £2,000,000 £3,000,000
AnnualUnitSales
Annual Marketing Spend
Unit Sales Marginal Profit
Current Spend
The dilemma is that incremental spend sometimes will not generate much
growth because of saturation and diminishing returns. Marketing response
tends to vary depending on the spending levels and competitive activities.
17

18. (500)
-
500
1,000
1,500
2,000
2,500
Oct-2010
Nov-2010
Dec-2010
Jan-2011
Feb-2011
Mar-2011
Apr-2011
May-2011
Jun-2011
Jul-2011
Aug-2011
Sep-2011
Oct-2011
Nov-2011
Dec-2011
Jan-2012
Feb-2012
Mar-2012
Apr-2012
May-2012
Jun-2012
Jul-2012
Aug-2012
Sep-2012
Oct-2012
Nov-2012
Dec-2012
Jan-2013
Feb-2013
Mar-2013
Apr-2013
May-2013
Jun-2013
Jul-2013
Aug-2013
Sep-2013
Baseline Pricing GDP Paid.Digital-Search
Paid Magazines Paid.Digital-Display Paid Radio Owned-Website/SEO
Office Penetration Paid SpotTV Long-Term.Marketing Effect Earned-Social.Brand-Experience
18
Step 6: Marketing Contributions by Month

19. Step 7: Marketing Spend Optimization
Marketing spend optimization generates an estimated +10.2% sales lift at constant budget levels (average of
past 2 years). This result restores some traditional mass media, but with a relative increase for digital. The
plan finances an increase of all other media via a reduction in spend on sampling.
CONTRIBUTION CURRENT SPEND OPTIMAL SPEND
WebSEO 442490400 134,555 639,447
Paid.Digital-Display 321811200 1,003,211 703,392
Paid.Digital-Search 429081600 677,888 959,171
PaidMagazines 201132000 134,211 383,668
PaidRadio 281584800 833,455 767,337
PaidSpotTV 871572000 3,611,152 2,941,457
0%
20%
40%
60%
80%
100%
WebSEO
Paid.Digital-Display
Paid.Digital-Search
PaidMagazines
PaidRadio
PaidSpotTV
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Total $6,394,472 $6,394,472

20. HOW WOULD YOU FEEL ABOUT
GETTING 2 TO 8 PERCENT MORE
REVENUE WITHOUT REQUIRING
SPENDING ONE ADDITIONAL DIME
ON MARKETING?
20

21. Play out marketing What-if scenarios
An interactive dashboard allows you to simulate different marketing mix/spend
scenarios and assess the resultant impact on sales and profitability.
1. Set marketing
budgets.
2. Set your
spend levels
across media
channels
3. Assess the
resultant
impact on sales
& profit
21

22. Providing Answers to
Business Questions
22

23. BOTTOM-LINE ANALYTICS: OUR EXPERIENCE
23

24. It’s all About Results
Company Results
Coca-Cola
Brought marketing ROI modeling to company for first time in 1996. In first year developed models for
Coca-Cola, Coke Light, Fanta and Sprite in 12 Countries. Year two sales gains over prior year exceeded
$300 million.
Starbucks
Developed measure of customer-brand experience using social media. Discovered that Starbucks main
strength lies in its in-store experience. Successfully developed brand positioning for Frappucino and
Via Coffee. Sales growth improved from +7 to +11 percent
McDonald's
Identified significant upside growth opportunity to drive higher restaurant sales by investing
significantly more in "dollar-value meals" one year after launch in 2005. Per recommendation, major
& higher marketing investment in dollar value meals made McD's the growth leader in its competitive
segment for 2 years thereafter.
L'0real
Developed models which measured the ROI across 12 different "Celebrity Spokespersons" in L'Oreal
Commercials. Recommended reducing number from 12 to 5 Celebrities, leading to growth
improvement from +3 to +5%.
Hyatt Hotels
Developed SEI to quantify measure of "customer satisfaction" derived from measures of Trip Advisor
hotel reviews across 300 different properties. This lead to a 5% improvement in customer satisfaction
in subsequent year and a +6% growth in total bookings
AT&T
Identified and quantified impact from the launch of iPhone. By identifying which ad copy messages
were most effective, AT&T managed to increase it's wireless telecom market share from 28 to 30%.
Johnson and Johnson
Developed analytic system for measuring and evaluating ad copy for Splenda brand. Enabled brand to
reduce ad production from 8 to 4 commercial executions, saving $6 million
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25. 25
BLA leadership bios
Michael Wolfeis CEO of Bottom-Line Analytics LLC in the USA. Michael has 30 years of direct
experience in marketing science and analytics both on the client and consulting side. On the former,
Michael has worked for Coca-Cola, Kraft Foods, Kellogg’s and Fisher-Price. He has also consulted
with such blue-chip firms as AT&T, McDonald’s, Coca-Cola, Hyatt Corp., L’Oreal, FedEx and Starbucks.
Michael has broad experience in marketing analytics covering marketing ROI modelling, social media
analytics, pricing research and brand strategy.
Masood Akhtar is the Bottom-Line Analytics partner in the UK and heads the company
efforts across EMEA. Masood is former Director of Analytics for McCann-Erickson and also has
worked for Mintel International Group, JWT, Costa Coffee, Coca Cola, Hyatt Corp. He is an
accomplished econometrician with extensive experience in marketing ROI analytics, marketing
research, market segmentation, social media analytics and marketing KPI dashboards.
David Weinbergeris CMO of Bottom-Line Analytics. David’s career has taken him to such
blue-chip firms as Coca-Cola, Kraft Foods, Georgia Pacific and the Home Depot. David’s consulting
experience has focused on such verticals as retailing, financial services, apparel, consumer products
and insurance. David’s has considerable expertise in the areas of customer analytics, life-time
value, shopper marketing, social media, brand strategy, segmentation and marketing ROI analytics.
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26. Bangalore, IN Office:
No. 141, 2nd Cross, 2nd
Main,Domlur, 2nd Stage, Bangalore
560071Phone: +91 80 40917572,
+91 80 40916116
info@therainman.in
Contact Us US Office:
Suite 100, 1780 Chadds Lake Dr, NE
Marietta, Georgia, 30068-1608
Atlanta, USA
mjw@bottomlineanalytics.com