Using Lifetime Value to Optimize Your Digital Marketing Investments
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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. Learn how to use data to uncover the lifetime value of your customers and optimize your marketing for the best ROI on your marketing spend. Presented at MMA LATAM Forum in Sao Paulo Brazil on September 23, 2014 as part of the MMA Global series.
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Using Lifetime Value to Optimize Your Digital Marketing Investments
- 1. Using Lifetime Value to Optimize Your Digital Marketing Investments! 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, CEO Adknowledge @bglegg @adknowledge
- 2. The Digital Marketing Landscape is Overwhelming…! Data Source - Gartner 2 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 3. Which Adtype Should I Use? 3 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 4. Where Should I Show My Ads? 4 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 5. How Can I Track and Analyze Users? 5 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 6. What Should I be Measuring? 6 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 7. Who can help me? 7 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 8. 5 x 1028 Potential Ad Permutations 8 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 9. ROI: Customer Lifetime Value! 9 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 10. ‘Two-Thirds of CMOs believe ROI is the primary measure of effectiveness. But half of all CMOs feel insufficiently prepared to provide hard numbers.’! ! - IBM CMO Study ! 10 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 11. Cost to Acquire a Customer Will Keep Increasing... Android iOS Source: Fiksu $1.05 $0.88 $1.27 $1.22 July 2013 July 2014 11 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 12. Lifetime Value (LTV) – The Core Metric for Marketing 12 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 13. Traditional Measurement of ROI Transactional View! Spend per order! $ 15 ! Cost per order! $ 8 ! Profit Per Order! ! $ 7! ! 13 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 14. 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 Customer Lifetime View! 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! 14 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 15. Question:! If you were Dominos, what would you rather spend to acquire new customers?! A $ 50! B $ 150! C $ 300! 15 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 16. All Consumers Are Not Created Equal! MR. BESTEXAMPLE! ! MR. AVERAGE! MR.NEGATIVE! Average Order! Cost Per Order! Profit Per Order! Purchases Per Year ! Lifespan of Customer! Lifetime Profit! Acquisition Costs! Profit Per Consumer! ! * Churn plays a huge factor as well. ! ! ! ! ! $ 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! ! 16 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 17. LTV – for Loyal Customers of Key Brands! LTV helps marketers understand:! How much their customers spend How often they spend it What campaigns motivate buyers to become customers for life. $ 8,000! $ 11,535! $ 332,000! The LTV metric shines light into marketing’s biggest blind spot—the junction where long-term value begins to outpace short-term gain! Sources: Service Profit Chain, KISSMetrics 17 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 18. 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 18 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 19. Think Big. Start Now. Scale Fast. • Data Inventory • Data Collection • Data Hygiene • CRM Database • Segment • Understand • Message • Optimize • When you find something that works - uncap your budgets! 19 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 20. Plan: Your CRM Database is Critical to Success 20 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 21. Bringing it all Together! Utilize Real-Time Data to Deliver Your Message in a Way that Increases the Lifetime Value! TARGET REGION, AGE 18+! API INTEGRATION! ZIP! CONDITIONS! CREATIVE! 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 21 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 22. Test, Test, Test… ! 1 Segment! 2 Understand! 3 Message! 4 Optimize! 22 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 23. Scale Fast! “Houston, we have 23 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI! uncapped the budgets!”!
- 24. Marketing is all about Creating Value! LTV provides the means to create shareholder value! SHAREHOLDER VALUE! SOURCES OF VALUE CREATION! High Value! Mid Value! Low! Value! AVERAGE! NUMBER OF CUSTOMERS! LTV! 24 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!
- 25. ! Questions?! www.adknowledge.com @adknowledge 1.816.931.1771 25 Customer Lifetime Value: Combine Data and Insights to Optimize your ROI!