Optimizing Your Marketing MixA case study

May 1, 2014Robert WelbornAssociate Vice President, Decision ScientistUSAA@robert_welborn

Cautionary Tale• In 1949 Alexander Kotov was challenge by Tigran Petrosian (The Iron Tigran)

•Petrosian is the acknowledged Defensive Master, able to see 1,000’s of variations in play. He is the “hardest to defeat player in the history of chess”

• Kotov on the other hand was the chess rockstar. He hobnobbed with supermodels and nuclear physicists.

•This was Superman fighting The Incredible Hulk in the Soviet Chess world

•Petrosian surrendered in 13 moves

Source: Wikimedia Commons

Kotov Syndrome

• A Player, confronted by 1,000’s of possible scenarios

• The obvious is missed

• The player makes decisions based on emotion and expediency, instead of facts and discipline

Industrial Analysis requires Decision Frameworks not just Decision Making Tools

Analytics must produce Insights, not reports, and the Insights must be Useful (Results are better than elegance)

The Usefulness of the insights is a function of the integration of your analysts (not just your analysis)

Three Keys

Building Decision Frameworks (not just buy more tools)

Organize To Use Specialists

Start with the CFO

Publish for the C-suite

Source: Beleant, 2007 “Paleolithic Flints” used under Michigan Publishing Creative Commons http://hdl.handle.net/2027/spo.7523862.0005.006

When to Pay Attention to Analytics

The General Practitioner versus the Specialist

• When the GP says you are sick, you trust the GP to run some tests

• When the specialist says that you have Achilles tendonopathy, you go have surgery

•You want your analysts to be specialists

Source: Wikimedia Commons

So Who are The Specialists

The Threefold Path of Analysis

Ask someone

Experiment

Build a model

The CFO wants marketing to work

She may not know why

Or how it works

• Transform the CMO into a portfolio manager

• Analytics becomes the risk manager

Publish for the C-suiteConnect competitor action and macroeconomic analysis to your marketing

Allow real scenario analysis, "what if"

Get out of the PowerPoint trap and into white papers and long reads

Become the CEO's weekend reading

Source: Longreads.com

Analytics Must Produce Insights (Focus on Results)

• The Results should drive where you start, remain, and stop looking

• Converting Invested Money into Products is the kernel of every useful insight in Marketing

Insights must be useful

• The more useful the insights, the more credible your analysts are

• The more

http://blog.uber.com/wp-content/uploads/2011/12/New-Logo-Vertical-Dark.jpg

Conclusion

• Align your organization for using specialists, and set them up so that there is no punishment for telling the truth

• You need to hire the following specialists: Survey-ers, Experimenters, and Modelers

• Connect the stuff the CFO wants to what the CMO delivers and manage the risk

• Publish for the C-Suite and use your credibility

• When you are certain of something, do something

Questions?

Appendix

Alignment (or no one grades their own paper)

Keep the “Measure” separate from “Recommend” but using the same data

Separate Research from Analytics

Ask someone -

• Survey• Focus Group• Social or Listening

Experiment

• Test vs Control

• Multivariate

Separate the method of marketing from the method of measurement

Certainty in a measurement is not the same as certainty in results

Paid Search vs. Lift over control

Models

• Audiences

• Marketing Mix

• Funnel Analytics

“Art is a lie that helps you understand the truth. Models are abstractions that help you understand reality.” – Pablo Picasso