digital roi: the definitive guide to key...

Digital ROI: the definitive guide to key metrics

Elizabeth Smyth Marketing director

Marketo EMEA

Simon Gray Channel development

consultant Lateral Group

Thomas Brown Head of insights

The Chartered Institute of Marketing

Thomas Brown

Head of Insights, CIM

17 May 2012

Digital ROI – the holy grail?

STRICTLY CONFIDENTIAL

© The Chartered Institute of Marketing 2012 | All rights reserved.

../Jan08 - The Marketing Disconnect/Presentations/Rolling intro slides_logos.pps

Source: Unlock the value of creative

CIM and Canon Europe, 2011

ROI?

ABP (Always been

problematic)

of organisations consistently report

marketing measures internally to

the board On

ly

48% of companies always set KPI’s

clearly for each initiative On

ly

7% believe that metrics are put in

context, correlated to other metrics

within the business or externally On

ly

24%

of organisations believe they have timely reporting O

nly

49%

of organisations always set clear

accountabilities for objectives On

ly

7%

Source: Marketing Measurement and

Accountability, CIM and Deloitte, 2010

of companies don’t believe that

Executives drive change as a

result of marketing or customer

performance measures

ROI?

ABP (Always been

problematic)

of companies believe they are fairly

or very effective at measuring

return on investment Un

de

r

40% of organisations feel their reporting

isn’t sufficiently accurate

Ove

r

48% of companies say they have data

that is presented in an effective

way to enable insight to be

identified O

nly

36%

49%



ROI?

ABP (Always been

problematic)



Then

digital

came

along

Uh-oh.

TJGC (Things just got

complicated)

In the outside world…

• Fragmentation of media

• Proliferation of channels

• Fad vs. fundamental?

• From broadcast to co-creation

• From DR to dialogue

Uh-oh.

TJGC (Things just got

complicated)

In the outside world…

• Fragmentation of media

• Proliferation of channels

• Fad vs. fundamental?

• From broadcast to co-creation

• From DR to dialogue

And on the inside…

• Agencies

• Skills and talent

• Sceptics and knee-jerkers

• Technology and systems

• Joining up campaigns across multiple

channels

• Understanding the levers!

But the best thing about

digital is that everything’s

measurable… right?

So we start pouring money

into things like social

media…

Source: CIM Social Media Benchmark

Wave one Autumn 2011

In association with Ipsos ASI and Bloomberg

Without clarity as to why…




Well-established metrics

aren’t well used…




Wrong.

INTS. (It’s not that simple)

Measurement doesn’t equal ROI.

• Tools and technology

• So much data!

• Skills and scary people in finance

• Pace and resourcing

• What’s actually having the impact –

which lever?

Social Media Benchmark: find out more

www.smbenchmark.com

#SMBenchmark

Follow me or find out more…

Proving and Improving Marketing’s

Impact on Revenue

Liz Smyth

Marketing Director

Marketo EMEA Ltd

© 2011 Marketo, Inc. Marketo Proprietary and Confidential

Topics

• Building Marketing Credibility

• Planning for Marketing ROI

• The Right Metrics

• Revenue Metrics

• Marketing Program Performance

• Forecasting


12%

20%

15%

9%

44%

Improve profits bymore than 20%

Improve profits by10% to 20%

Improve profits up to10%

No major change inprofits generated

Don't Know

What Profits Can Be Generated With

10% More Budget?

#1 Answer:

Don’t Know

Source: 2010 Lenskold Group / emedia Lead Generation Marketing ROI Study


Planning for Marketing Measurement

Source: Lenskold Group

Establish Goals and ROI Estimates Up-Front

Design Programs to Be Measurable

Focus on the Decisions that Improve ROI


Where Metrics Go Wrong

Vanity Metrics Sound good and impress people, but don’t measure impact on revenue or profitability



Activity Metrics Measure what you do instead of what results and impact you have



Cost Metrics Frame marketing in terms of cost and spending instead of results and outcomes


The Right Metrics

Revenue Metrics

Aggregate impact on company revenue

Marketing Program Performance

Incremental contribution and ROI of individual marketing programs

Other Metrics Areas (less tied to Revenue/Finance) Customer Profitability, Net Promoter, Web Analytics, Public Relations Effectiveness, Product Performance, Brand Preference and Health, Sales Tool Usage


Model the Full Revenue Cycle

All N

am

es

Pro

spect

&

Recycle

d

Lead

AW

AR

EN

ESS

Engaged

Opportunity Customer

Sale

s Lead

MQL

SAL SQL


Filter/Drill into data, e.g. by Program Type, Business Unit, Geography, etc.

Key topic areas: • Balance • Flow • Conversion • Velocity

Trends over time

SLA violations

Screenshot: Marketo Revenue Cycle Analytics


Marketo Revenue Cycle Metrics

Opportunities 130 / mo ($2,000)

New Customers ($5,800)

Leads 2,000 / mo ($137.50)

Prospects 3,800 / mo ¾ paid ($73)

¼ unpaid ($0)

($55 average)

20%

Active Prospect Database

4.0% / month 75%

Paid Names

($29.33)

10% Unpaid Names

($0)

40%

Inactive (Last 6

Months)

Lead Type Variants • Source • Channel • Division • Size

80%

80% of all deals follow this model

• Lead to Sales Lead: 7% • Sales Lead to Opp: 80% • 1.4 people per Opp 1,000 Leads = 40 Opps

9,500 / mo


Why Measuring Programs is Hard

• Multiple touches. Seven touches needed to convert a cold lead into a sale

• Multiple influencers. Typical buying committee has 5-21 people

• Tyranny of time. The money you invest today will have an uncertain impact at an uncertain point in the future


Ways that Companies Measure

• 20%: No tracking

• 45%: Single Attribution

• 21%: Attribute Across Multiple Programs and People

• 11%: Test and Control Groups

• 3%: Market Mix Modeling Source: 2010 Lenskold Group / emedia Lead Generation Marketing ROI Study


Example: Attribute across Multiple

Programs and People? A deal worth $100,000 recently closed. Three people were involved in the deal:

• Person A attended Seminar A and Trade Show B

• Person B attended Trade Show B

• Person C was sent Direct Mail C

$100,000 Revenue

$25,000 $25,000 $25,000 $25,000

Seminar A $25,000

Tradeshow B $50,000

Direct Mail C $25,000


Need to Track All Touches Across

People

Screenshot: Marketo Revenue Cycle Analytics


To Summarise

• Buying has changed forever – the role of marketing must change as well

• Reporting is less important than DECISIONS that improve ROI

• Focus on financial metrics that matter to the CFO (profit, cash, revenue)

• Avoid cost and spend metrics – focus on investment and return

• A trusted marketing forecast is the single most important step to make marketing a revenue driver, not a cost center


Thank you!

Segmentation Driving ROI

About Us

• Part of the DST Global network with 11,000 employees

• Acquired in August 2011

• Headquartered in London, UK

• The UK’s Cross Media Company of the Year 2010

• Gartner “Cool Vendor” 2011 for Marketing Business Process

Services

• UK 150 staff

• Global consulting team delivering services in EMEA, North

America and Asia Pacific

What We Do – Key Propositions

Consulting & Insight

ICM Audit & Consultancy

Customer Lifecycle Planning

CRM Program Planning

Customer Strategy

Marketing Mix Modelling

Analysis

Compliance and Regulatory

Database Marketing

Data Optimisation

Data Acquisition and Prospect Pools

Single Customer View

Systems Integration

BI Reporting & Dashboards

Creative Services

Creative Consulting

Creative Communications

Copywriting

Studio Services

UX Development

Dialogue Management

CRM Programme Management

Trigger Marketing

Social Media

Search Marketing

Email Marketing

Mobile Marketing

Direct Mail

Postal Solutions

Print Management

Marketing Technology

MarketPower (MRM)

SmartCast ASP

Hosting

Document Composition

Development

The ICM Competency Framework

What do you want to achieve?

• ROI – Investment

• ROP – Participation

• ROE – Engagement

• ROI – Influence

Domino’s Pizza

Engagement Segmentation: The Rationale

Domino’s Pizza direct marketing and analysis primarily occurs at a household level

Focused on increasing the total spend of each household

Engagement segmentation tracks customers purchase patterns over time through an enhanced RFM approach

Segm

enta

tion O

verv

iew

Understanding Behaviour

Utilises information about individual

consumers behaviours to group like

consumers together.

Domino’s Example

• Product & Basket Analysis

• Frequency

• Promotion Responsiveness

Customer Segmentation: Lifecycles &

Engagement

Segmentation Driving Communication

Segment Trigger Initiation

• Lifestage Change

• Value Change

Segment Content Personalisation

• Behavioural

• Geodemographic

• Media

Relevant Messaging

Initiating Behaviour


• Behavioural

• Geodemographic

• Lifestage

• Value

Relevant Messaging

Target Audience

• Lifestage

• Value

• Behavioural

• Geodemographic

• Targeting Characteristics


• Lifestage

• Value

• Behavioural

• Geodemographic

Relevant Messaging

Segmentation

Based Triggers

Action Based

Triggers

Tactical &

On-going

Communications

Thank You

Digital ROI: the definitive guide to key metrics

Elizabeth Smyth Marketing director

Marketo EMEA

Simon Gray Channel development

consultant Lateral Group

Thomas Brown Head of insights

The Chartered Institute of Marketing

digital roi: the definitive guide to key...

Documents