Delivering ROI,Internationally

Ian ManningHead of Client Services – InternationalZenithOptimedia International09 October 2009

“marketing departments have

an inadequate understanding of financial controls”

Source: Advertising Age, July 2008

Profitable Growth

“Companies showing a commitment to

measuring marketing tend to be better at

delivering profitable growth”

Brand Power

PricingDistribution

Brand Power Media Investment

Drivers of Profitable Growth

• Based on detailed P&L inputs and marketing channel response functions at the market, portfolio, brand and sku level

Econometrics attempts to isolate drivers by ‘unbaking the cake’

“Every brand in every country that has done marketing mix modelling or marketing ROI (econometric analysis) has improved the productivity of its marketing spending without exception”AJ Laffey

Chairman, P&G

Media is a Significant investment($454 Bill in 2009)

0

100000

200000

300000

400000

500000

600000

Mill US$ North America Western Europe Asia/PacificC & E Europe Latin America Africa/M. East/ROW

Mill

ions

US$

2006 20112007 2008 2009 2010

Source: ZenithOptimedia Forecasts, July 2009

The Challenge for us is to understand the relationship between Media Investment

and Profitable Growth

Profitable GrowthMedia Investment

Many Metrics are Available to bridge the gap

Search Metrics

Web/banner Metrics

Website Metrics

In-Store Metrics

Media Metrics

Brand Metrics

Profitable GrowthMedia Investment

Media Metrics

Media Metrics

ReachFrequency

GrpsSocial mentions

Positioning

Web/banner Metrics

Impressions Clicks

Unique Users

Cost Per Thousand

Cost Per Click Interaction Rates

Search Metrics

Impressions Clicks

Unique Users

Cost Per Thousand

Cost Per Click Interaction Rates

Revenues

Brand/Client Metrics

Website Metrics

Site visits engagement index

dwell-time

brochure requests test-drive

requests

In-storeMetrics

Store trafficSales conversions

Questionnaires

BrandMetrics

Awareness Familiarity

LikingConsideration Preference

Market ShareCustomer value

Delivering ROI

1. Setting the right objective

2. Setting the right levels

3. Move from Measures to Outputs

4. Make it actionable

90% of campaigns with

ROI goals deliver

satisfactory results

Source: Moore and Allsop, 2004

PR trackingWOM trackingBuzz trackingNet Promoter

Awareness tracking

Brand equity &image

tracking

Consideration /

purchase intent

tracking

Sales dataEPOS data

Usability testsQual

research

Loyalty tracking

Newsletter clicksWOM

tracking

1. Setting the right Objectives

1. Setting the right Objectives

1. Reach (Grp’s, Impressions)

2. Brand tracking awareness changes

3. Search keyword mentions

4. Blog mentions

1. Time on Website

2. Newsletter downloads

3. Event attendance

4. Repurchase

• Use Past performance as a guide

• Where own data is not possible, use competitor data or norms data

• Consider the required level to deliver the right conversion rate

2. Setting the right Levels

Measures• ‘One-number’

fact –• Eg: Cost• Eg: GRP’s• Eg: Web

visits

Metric• Analysis –

• Cost per Grp• Cost per

click

Intermediate Metric

• A stream of inputs & outputs– • Awareness• Cost per

awareness• engagement

Output Metric• For every €

invested in x, it delivers y profit

3. Move from Measures to Outputs

Budget Setting • Marketing Mix Modelling

Budget Allocation • Market Optimisation

Marketing Mix • Market mix modelling

Channel Selection • TGI / Bespoke research

Targeting • TGI / Bespoke research

Buying • Media Auditing

4. Think ROI throughout the Process

• 2.2% growth in share of market (SOM) per 10% points of excess share of voice (SOV-SOM)*

Budget Setting

Budget Allocation

Marketing Mix

Channel Selection

Targeting

Buying 0.00% 10.00% 20.00% 30.00% 40.00% 50.00%0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

SoM

SoV

SOV/SOM

*IPA 127 case examplesIPA Effectiveness Awards cases 1980 to 2008

Budget Setting

Budget Allocation

Marketing Mix

Channel Selection

Targeting

Buying

Media investment

Sale

s/ P

rofit

More profitable markets/channels

are more attractive

Less profitable markets /channels are less

attractive

Response Curves

Budget Setting

Budget Allocation

Marketing Mix

Channel Selection

Targeting

Buying

Target descriptions influence investment

350 GRP’s73% Reach

4.8 OTS

AB Men 35+ AB Men 35-55Top Income

€90k less expensive

Budget Setting

Budget Allocation

Marketing Mix

Channel Selection

Targeting

Buying

Better target understanding creates ROI

Plan 1604 GRPs€320,000

20% Specialist Channels

Plan 2545 GRPs€240,000

37% Specialist Channels

10% less ratings25% less budget

Negotiation Tactics for greater valueBudget Setting

Budget Allocation

Marketing Mix

Channel Selection

Targeting

Buying

Leverage Rates

LeverageValue

Network Prime

OOH

Digital

Magazines

Radio

Premium Cable

Cable

Local TV

HARD

SOFT

• Ensure the metrics chosen can be affected by changes to the investment strategy

• Ensure the metrics chosen can be influenced during (not only after) the campaign

• Live Dashboards allow us to evaluate multiple metrics during campaigns

5. Make it Actionable

1. Clarify and agree desired outcome with all stakeholders

2. Audit available metrics

3. Agree KPI (and link to rewards)

4. Set ongoing measurement in place

5. Ongoing campaign optimisation through live dashboards

Living ROI

The ROI Agency