Using Lifetime Value to Optimize Your Digital Marketing Investments: Ben Legg, CEO of Adknowledge (AdParlor’s parent company), will provide insight into the data-driven way to uncover the lifetime value of your present and potential customers, then optimize your cross-channel marketing activities to get the best ROI on your media investments, digital

1. How to use data to uncover the lifetime value of your
customers and optimize your marketing for the best
ROI on your marketing spend
Ben Legg, CEOAdknowledge
Using Lifetime Value to Optimize
Your Digital Marketing Investments
@bglegg
@adknowledge

2. 2 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Data Source - Gartner
The Digital Marketing Landscape is Overwhelming…

3. 3 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Which Adtype Should I Use?

4. 4 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Where Should I Show MyAds?

5. 5 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
How Can I Track andAnalyze Users?

6. 6 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
What Should I be Measuring?

7. 7 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Who can help me?

8. 8 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
5 x 1028 PotentialAd Permutations

9. 9 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
ROI: Customer Lifetime Value

10. 10 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
‘Two-ThirdsofCMOsbelieveROIistheprimarymeasure
ofeffectiveness.ButhalfofallCMOsfeelinsufficiently
preparedtoprovidehardnumbers.’
-IBMCMOStudy

11. 11 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Cost to Acquire a Customer Will Keep Increasing...
Source: Fiksu
$0,88
$1,27
$1,05
$1,22
July 2013 July 2014
Android
iOS

12. 12 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Lifetime Value (LTV) – The Core Metric for Marketing

13. 13 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Spend per order $ 15
Cost per order $ 8
Profit Per Order $ 7
Traditional Measurement of ROI
Transactional View

14. 14 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
We Eat Pizza More Than Once...
The LTV is the amount of profit you make from a typical
customer over the entire lifetime of your relationship
Spend per order $ 15
Cost per order $ 8
Profit per order $ 7
Number of Purchases per Year 12
Average Lifespan of Customer 5
Cumulative Profit $420
Customer Lifetime View

15. 15 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
IfyouwereDominos,whatwouldyouratherspendto
acquirenewcustomers?
Question:
A B C$ 50 $ 150 $ 300

16. 16 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
* Churn plays a huge factor as well.
Average Order
Cost Per Order
Profit Per Order
Purchases Per Year
Lifespan of Customer
Lifetime Profit
Acquisition Costs
Profit Per Consumer
$ 22.50
$ 12.50
$ 10
26
10
$ 2,600
$ 300
$ 2,300
$ 15
$ 8
$ 7
12
5
$ 420
$ 150
$ 270
$ 12
$ 7
$ 5
3
1
$ 15
$ 50
$ -35
MR. BEST MR. AVERAGE MR.NEGATIVEEXAMPLE
All Consumers Are Not Created Equal

17. 17 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
LTV – for Loyal Customers of Key Brands
Sources: Service Profit Chain, KISSMetrics
LTV helps marketers understand:
How much their customers
spend
How often they spend it
What campaigns motivate
buyers to become customers
for life.
The LTV metric shines light into marketing’s biggest blind spot—the
junction where long-term value begins to outpace short-term gain
$8,000 $11,535 $332,000

18. 18 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
What are the Barriers to LTV?
If LTV is critical why aren’t more marketers doing it?
Lack of Awareness
Higher barrier to entry
Difficult to calculate
Time pressures to show results quickly

19. 19 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
• Data Inventory
• Data Collection
• Data Hygiene
• CRM Database
• Segment
• Understand
• Message
• Optimize
• When you find
something that works -
uncap your budgets!
Think Big. Start Now. Scale Fast.

20. 20 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Plan: Your CRM Database is Critical to Success

21. 21 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Bringing it all Together
TARGET REGION,
AGE 18+
API INTEGRATION
ZIP CONDITIONS
CREATIV
E
CTR CVR IMP
10001 Hurricane Ad 1 1.30 25% 1,000,000
10002 Thunder Storms Ad 2 0.93 13% 1,000,000
10003 Rain Ad 3 1.01 20%
1,000,000
Utilize Real-Time Data to Deliver Your Message in a Way that Increases the
Lifetime Value

22. 22 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Test, Test, Test…
1 Segment
2 Understand
3 Message
4 Optimize

23. 23 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Scale Fast
“Houston, we have
uncapped the
budgets!”

24. 24 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Marketing is all about Creating Value
LTV provides the means to create shareholder value
SHAREHOLDER VALUE
High
Value
Mid
Value
Low
Value
AVERAGE
NUMBER OF CUSTOMERS
LTV
SOURCES OF VALUE CREATION

25. 25 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI
Questions? blegg@adknowledge.com
1.816.591.8758
@bglegg
www.linkedin.com/in/benlegg