Marketing Tactegy

Cumulative Engagement Modeling - A new way to look at Marketing Effectiveness - a new white paper

I’ve been working on marketing ROI for a long time now.  We’ve delivered Marketing Mix Models, Agent Based Models and many other analyses to help marketers make better strategic and tactical marketing decisions. 

One of the concepts that I’ve found to be very descriptive is Last Touch Attribution.  Last Touch Attribution assigns all the weight of a marketing activity to one response.  It ignores all prior, concurrent and long term values generated by a particular media activity.  Similarly, Marketing Mix Models generally ignore the long term value of marketing and advertising.  They correlate marketing activities through a regression model to the sales volume from a particular time period, usually a week.  But as a rule they don’t include the long term values that these marketing activities deliver.

The long term marketing value generated by any and all marketing activities fall into a few categories:

· Increased awareness and purchase intent

· Changes in the brand attribute profile (imagery)

· Customer equity (the value of any new customer converted to the brand)

Last touch Attribution and Marketing Mix Models are great tools to support marketing in their ability to make better strategic and tactical decisions, but they don’t tell the full story.

This white paper was put together to describe in detail how a new approach is needed to understand how marketing messages drive awareness and purchase intent and that these values accumulate amongst the consumers.  As marketing messages are inserted into the category awareness and purchase intent accumulate.  If messages stop they decay.  If messages begin again they start to accumulate again.

This concept is especially important when we start to add social media marketing to the mix.  With social marketing we need to now compare the value a comment on Facebook or a video viewed on YouTube might have on the brand.  Cumulative Engagement Modeling is a great step in accurately determining how these messages drive incremental awareness and purchase intent for those social media active individuals.

I hope you find the white paper interesting.  Please let me know your comments and feedback.

http://www.Marketing-Calculator.com/DownloadNow.aspx

Thanks

Guy

http://www.Marketing-Calculator.com

The Full Measure on MeasureUp (4 of 4)

MeasureUp is a great conference for all things marketing ROI and return on marketing investment ROMI put on by the IIR.  They put on some great events and I highly recommend you take a look at their site for some upcoming events.  To summarize this series of 4 posts the Measureup conference there were a few major points that I came away with:

1. Marketing Mix Modeling may have peaked. Marketing Mix models have provided great insight over the years, but lately many have been shown to only deliver short term insights. When used in a competitive, mature category, such as, for the Oreo brand, MMMs typically deliver short term insights in that temporary price reductions can increase sales. Unfortunately, they also lead to loss of brand value. MMMs don’t include the long term brand value that can be destroyed through continuous price actions. Consumers simply get trained to always buy on ‘deal’.
2. Social media although is growing and is important for many brands, it still has a long way to go to be a major contributor for some of the top consumer brands. For the rest of us, though social media can still drive a lot of brand engagement, it can be measured and will continue to grow in importance.
3. Analytics and measured insights are becoming more and more important in marketing decision making. Marketers are finally embracing analytics and using them to their advantage. There is still a long way to go, but it is progressing swiftly.

There were many more insights and I hope next year you’ll have a chance to participate as well.  Just let me know if you would like further information on any of these topics.

The Full Measure on MeasureUp (3 of 4)

Here are continuing remarks and key notes from the MeasureUp conference.  This is the third in a series  (You can also read my Twitter stream at #ROMI)

1. Melanie Davis, Director of Marketplace Insights at American Express had some great insight as to how American Express uses modeling to support their brand.  They analyzed their presences on Twitter and Facebook with the goal to track online buzz compared to their competitors (primarily bank credit card issuers) using share of conversation and sentiment.  It was modeled using Structured Equation Modeling to determine how online buzz drove their funnel (Awareness, Engagement and Consideration, Conversation, Loyalty and Usage).  This is a great example of using the community engagement funnel (described in our social media white paper.  Download now.  One of the other interesting findings was that even though there was a lot of buzz it was relatively small compared to the number of purchased impressions made using traditional media.
2. Building a business case for marketing, social media and ROI were discussed in my session. With Ted Molter, Director of Marketing at the San Diego Zoo and Wild Animal Park and Nick Popielski, Director of Marketing at Atlanta Gas Light Resources.  Both had compelling stories on how they were able to drive analytics and numbers into their marketing organizations with some astounding results.  Nick Popielski showed how ROI was the only way to get the attention of the C-Suite and provide a solid foundation for the marketing business case.  Understanding the causes of churn led to significant growth in their net customer base.  Ted Molter spoke primarily about online marketing ROI showing how online media including social media was able to drive high conversion rates and ROI.  The numbers reached into the 1,000% range for ROI.
3. Ed Keller of Keller-Faye provided some great insight on their TalkTracker tracking survey.  This service provides both on and offline measurements of word of mouth.  Social media must be looked at from an online and offline perspective when comparing online and offline word of mouth conversations.  77% of them still take place offline according to studies and research conducted by Keller-Faye.  They estimate that over 3.3bn brand conversations take place every day in the US alone.  The top talked about brands are:
   • Coca Cola
   • Verizon
   • Walmart
   • Pepsi
   • AT&T
4. Ellen Stone, SVP of Marketing at the Bravo Network gave probably the most complete discussion on calculating ROI for social media.  There is no question that social media marketing can be very effective at driving buzz and delivering value for Bravo network.  They were using a number of fascinating tactics to drive buzz and deliver incremental viewers to their programming.  This was especially true for the launch of new programming.
5. Unfortunately I wasn’t able to capture the name of the presenter from Publicis, the agency for Denny’s restaurants.  My apologies.  Nevertheless he had some great statistics from their superbowl campaigns.  Denny’s super bowl offer of a free breakfast after the 2008 Super Bowl was wildly successful driving value and sales for the brand.  Unfortunately the advertising campaign was not sustained after the first quarter and it lost its momentum that could have been easily and cost effectively sustained.  Here are a few interesting facts:
   • Add-ons and late arrivals paid for the cost of the ad and the food at the 1,500 Denny’s restaurants
   • 2 million guests enjoyed the meal
   • Restaurant locater on the web was a key metric to determine interim success.  The ad delivered over 14,000,000 hits to website in 12 hours.  It generated over 2,300 news hits, 500 newspaper articles.  It was even mentioned by Jay Leno and Jon Stewart.  “Denny’s” became the 2nd most googled word.
   • Many guests heard about the free meal through text, calling, Facebook and mass emails to friends
   • It took over a million chickens to lay the eggs required.
   • Through this ad, Denny’s was able to meet its financial goals for the quarter.

Still more to come. Stay tuned for the next installment. Let me know what you think of the insights gained.

Challenges in Statistical Marketing Mix Modeling

Benefits of Marketing Mix Modeling

Marketing Mix Modeling has been used for many years now and has been able to help marketers significantly improve their marketing budget allocations and other key tactical marketing decisions.  It has led to many improvements for many companies in how they drive revenue, profit and share,  helping marketers to choose creative campaigns and many other critical tactical decisions.  They allow analysts to relatively easily deliver models that support budget allocations and diagnostics to drive more revenue out of their hard-won marketing budgets. 

Challenges of using Marketing Mix Modeling

One of the biggest challenges in  modeling is on the data.  Now in the US and elsewhere Nielsen and IRI and others have developed cost effective means to provide (at reasonable cost) sales, price and distribution, and in-store data on a weekly basis across the category.

Pitfalls of Marketing Mix Modeling outside of the US

Outside of the US and the major countries in Europe other factors come into play - in particular coverage and granularity.  In Russia, for example, data covers about 40% of the retail sales volume and is often concentrated in the major cities.  In addition, the data is available only on a monthly or even bi-monthly basis - making it nearly impossible for traditional, statistically based MMM's to provide hard and fast answers.

Using Agent-Based Modeling and Simulation

A new technique based on agent-based modeling, where agents represent virtual consumers, is now gaining momentum and is a viable alternative in these data-stressed countries and categories.  Because the agent-based modeling is based on consumer choice, even in the face of less than stellar data they can deliver robust results in order to improve a marketer's strategic and tactical decision-making. 

If you'd like to learn more give me a ring.  I'd love to hear from you.