digital roi: the definitive guide to key...
TRANSCRIPT
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.
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%
Source: Marketing Measurement and
Accountability, CIM and Deloitte, 2010
ROI?
ABP (Always been
problematic)
Source: Marketing Measurement and
Accountability, CIM and Deloitte, 2010
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!
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…
Source: CIM Social Media Benchmark
Wave one Autumn 2011
In association with Ipsos ASI and Bloomberg
Well-established metrics
aren’t well used…
Source: CIM Social Media Benchmark
Wave one Autumn 2011
In association with Ipsos ASI and Bloomberg
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?
Page 20
© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Topics
• Building Marketing Credibility
• Planning for Marketing ROI
• The Right Metrics
• Revenue Metrics
• Marketing Program Performance
• Forecasting
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© 2011 Marketo, Inc. Marketo Proprietary and Confidential
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
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© 2011 Marketo, Inc. Marketo Proprietary and Confidential
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
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© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Where Metrics Go Wrong
Vanity Metrics Sound good and impress people, but don’t measure impact on revenue or profitability
Page 24
© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Where Metrics Go Wrong
Activity Metrics Measure what you do instead of what results and impact you have
Page 25
© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Where Metrics Go Wrong
Cost Metrics Frame marketing in terms of cost and spending instead of results and outcomes
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© 2011 Marketo, Inc. Marketo Proprietary and Confidential
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
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© 2011 Marketo, Inc. Marketo Proprietary and Confidential
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
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© 2011 Marketo, Inc. Marketo Proprietary and Confidential
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
Page 29
© 2011 Marketo, Inc. Marketo Proprietary and Confidential
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
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© 2011 Marketo, Inc. Marketo Proprietary and Confidential
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
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© 2011 Marketo, Inc. Marketo Proprietary and Confidential
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
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© 2011 Marketo, Inc. Marketo Proprietary and Confidential
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
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© 2011 Marketo, Inc. Marketo Proprietary and Confidential
Need to Track All Touches Across
People
Screenshot: Marketo Revenue Cycle Analytics
Page 34
© 2011 Marketo, Inc. Marketo Proprietary and Confidential
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
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
What do you want to achieve?
• ROI – Investment
• ROP – Participation
• ROE – Engagement
• ROI – Influence
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
Segmentation Driving Communication
Segment Trigger Initiation
• Lifestage Change
• Value Change
Segment Content Personalisation
• Behavioural
• Geodemographic
• Media
Relevant Messaging
Initiating Behaviour
Segment Content Personalisation
• Behavioural
• Geodemographic
• Lifestage
• Value
Relevant Messaging
Target Audience
• Lifestage
• Value
• Behavioural
• Geodemographic
• Targeting Characteristics
Segment Content Personalisation
• Lifestage
• Value
• Behavioural
• Geodemographic
Relevant Messaging
Segmentation
Based Triggers
Action Based
Triggers
Tactical &
On-going
Communications