MARKETING MIX CHALLENGE:DECLINING DOLLARS / GROWING PLATFORMS

2002 2006 2012

BUD

GET

80%

60%

40%

20%

0%

100%

MEDIA CHANNELSMEDIA CHANNELS

#C360

QUANTIFYING MARKETING RETURNS IS NOT SIMPLE

SOCIAL MEDIA

DIGITALGRANULAR •

TACTICAL

TRADITIONALMASS • REACH

MEASURING SUCCESS REQUIRESFACT-BASED LEARNING

#C360

• MARKETING MIX IS STEP 1

• GRANULAR DATA + COSTS + CLIENT DETAILS = FORWARD-LOOKING, PRESCRIPTIVE OPTIMIZATION

• MAGNITUDE OF RESULTS ARE SURPRISING

THE SOLUTION

#C360

REI – A UNIQUE CORPORATE CULTURE

BIKING KAYAKING

SKIING ECO-FRIENDLY

CUSTOMERSATISFACTION

#C360

FACT-BASED INSIGHTS = OPTIMAL RESULTS

1 2 3

ROI 59%

#C360

MEASURE EVERY TACTIC IN A MEANINGFUL WAY

PAIDPAID

UNPAIDUNPAID

NON-BRANDEDNON-BRANDED

BRANDEDBRANDED

COMPARATIVE SHOPPING ENGINECOMPARATIVE SHOPPING ENGINE

PAID SEARCHPAID SEARCH

TVRADIOPRINT

TVRADIOPRINT

DIGITALDIGITAL

#C360

MEASURE ALL SALES CHANNELSBOTH TRADITIONAL AND ONLINE

COMPLETE TACTIC

PERFORMANCE

TRADITIONAL

DIGITAL

RETAIL STORE SALES

REI.COM SALES BY DMA #C360

FIND THE TRUE SOURCE OF AN INCREMENTAL PURCHASE

AND OVERCOME THE “FALLACY OF LAST TOUCH”

EXAMPLE #1 EXAMPLE #2

Assigning credit by tracking click thru patterns would incorrectly give

credit to Search

Marketing mix models would correctly give

credit to TV

Because there is no way to directly track clicks from display to retail,

credit would be “lost”

Marketing mix models would correctly give

credit to Display

KEY

PROPERLY CREDITED IMPROPERLY CREDITED

#C360

3-STEP PROCESS TO ANALYZE CURRENT BUSINESS PERFORMANCE

MARKETING MIX MODEL- METHODOLOGY

TIME

SALES

DIRECT MAIL

TV

ALIGN SALES WITH MARKETINGSTEP 1

#C360

3-STEP PROCESS TO ANALYZE CURRENT BUSINESS PERFORMANCE

MARKETING MIX MODEL- METHODOLOGY

DIRECT MAIL CoreOnlinePrint TV

SALES

DIRECT MAIL

TV

ATTRIBUTE SALES TO ACTIVITIES OCCURRING WHEN SALES INCREASED

STEP 2

#C360

MARKETING MIX MODEL- METHODOLOGY

3-STEP PROCESS TO ANALYZE CURRENT BUSINESS PERFORMANCE

STEP 3

ANALYZERESULTS

EXPLAIN CHANGEVS. YEAR-AGO

CALCULATEROI

#C360

OPTIMIZEDPLAN

TV

PRINT

ONLINE

MARKETING MIX MODELS

BY ACTIVITY

BY WEEK

BY BRAND

BY CHANNEL

MARKETING

COSTS AND PRODUCT MARGINS

BUSINESSRULES

CUSTOM OPTIMIZATIONS IDENTIFY BEST POSSIBLE INVESTMENT

#C360

OPTIMIZATION: SAME BUDGET, BETTER RESULTS

SPEND IN CHANNEL

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

INCR

EMEN

TAL

IMPA

CT

ROI = $1.25

TV Online

Current Spend

ROI = $1.42

Cut $500kLose 2,500 units

Add $500kGain 12,000 units

0 250 500 750 1000

1250

1500

SPEND IN CHANNEL

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

INCR

EMEN

TAL

IMPA

CT

0 250 500 750 1000

1250

1500

TV Online

Optimal Spend

#C360

CONTINUOUS IMPROVEMENT = IMPROVED PERFORMANCE

REFINEMODELS

MORE GRANULARITY

NEW TACTICS

#C360

MAKE STRATEGIC SHIFTS IN YOUR TIMING

#C360

MAKE STRATEGIC SHIFTS IN YOUR MARKET

RADIO MARKETS

DIGITALMARKETS

TVMARKETS

ALL TACTICSMARKETS

CHICAGO MADISON

MILWAUKEE

SAN FRANCISCO BOISE AUSTIN

BOSTONATLANTA

SAN DIEGO

SEATTLESALT LAKE CITYMINNEAPOLIS

#C360

ACCOUNT FOR DIFFERENCESACROSS SALES CHANNELS

(8.7%)

2.9%BUDGET

REVENUE (2.5%)

14.7%RETAILSALES

ONLINESALES

#C360

HOW TO IMPLEMENT

• KNOW NOT ONLY WHERE MARKETING DOLLARS WENT, BUT WHERE THEY SHOULD GO

• INCREASE PRECISION WITH MORE GRANULAR DATA AND MAKE MORE SUCCESSFUL STRATEGIC DECISIONS

• CONTINUOUSLY REFINE/IMPROVE BASED ON THE CHANGING ENVIRONMENT

#C360

WHAT DID YOU THINK?RATE THIS SESSION

USE THE MOBILE AGENDA:

1. SELECT SURVEY2. FIND THE LINK FOR YOUR SESSION USE YOUR PC OR IPAD:

1. NIELSEN.COM/C360 2. ACCESS THE ATTENDEE ONLY LINKS