It's Not the Size of the Data -- It's How You Use It

Smarter Marketing with Analytics and Dashboards

 It's Not the Size of the Data -- It's How You Use It

Author: Koen Pauwels
Pub Date: March 2014
Print Edition: $29.95
Print ISBN: 9780814433959
Page Count: 240
Format: Hardback
e-Book ISBN: 9780814433966

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Excerpt

INTRODUCTION

Such data-driven action typically involves the following four questions:

1. What happened?

2. Why did it happen?

3. What will happen if?

4. What should happen?

Better, faster, and more transparent answers to these questions help

establish marketing accountability.

Yet marketing accountability—let alone the accurate calculation of

return on marketing investment (ROMI)—remains an elusive goal for

most companies, which are struggling to integrate big and small data

and marketing analytics into their marketing decisions and operations.

In their March 2013 article, McKinsey experts share that “in our experience,

the missing step for most companies is spending the time

required to create a simple plan for how data, analytics, frontline tools,

and people come together to create business value. The power of a plan

is that it provides a common language allowing senior executives, technology

professionals, data scientists, and managers to discuss where the

greatest returns will come from and, more important, to select the two

or three places to get started.”

The benefits of “getting started” and “marketing smarter” are huge

in both academic studies and business cases. Even a small improvement

in using marketing analytic dashboards brings companies on average 8

percent higher return on assets compared to their peers. This benefit

increases to 21 percent for firms in highly competitive industries.

Organizations of any size and in any industry have seen sustainable

competitive advantage from using marketing analytic dashboards.

However, only 16 percent of large international companies use marketing

analytics. In my experience, this percentage is even lower for small

and medium-sized firms across America, Europe, and Asia. I see similar

issues across multinationals and companies with a few dozen

employees and in industries ranging from business-to-consumer,

government, and business-to-business. The next three short stories illustrate

the issues that have inspired this book.

In early 2012, I found myself at the U.S. headquarters of a fast-moving

consumer goods multinational. I had been called in to moderate the

discussion between the chief financial officer (CFO) and the chief marketing

officer (CMO) on marketing effectiveness. The CFO insisted on

measuring all main activities either by ROMI or by return on marketing

objective (ROMO). The list of activities included market research,

marketing data management, offline marketing communications,

online marketing communications, promotions, and direct marketing.

Across all activities, the CFO was unhappy and had three concerns:

objectives were not clearly defined, the timing of expected returns was

not specified, and the marketing department showed resistance to

measurement. I helped the CMO to:

* Clarify marketing objectives and align them with the

business strategy.

* Overcome marketing’s resistance to measurement.

* Obtain excellent and relevant data.

* Develop the analytics that showed not just the size but also

the timing of the profit returns to marketing investment in

all categories.

The second illustrative tale took place in an executive meeting at a

European-based business-to-business manufacturer. Country managers

were accustomed to obtaining a certain percentage of their revenues

to spend on marketing. Faced with new competitive threats, all

decision makers felt that this rule was far from optimal and needed to

change—but how? Some countries asked for more money for joint promotions

with their customers—to then sell more of their product to

end consumers. Others considered this simply giving away money to

the customers, and instead advocated a direct-to-consumer campaign

to create awareness and preference for their product. Still a third group

believed the firm should target policy makers directly with sustainable

business credentials, pointing to huge successes of having a prime minister

come talk at the company’s trade shows. Unfortunately, the lack of

before/after measurement of sales lift left country managers unwilling

the change their positions. In this case, I worked in three steps. First,

I ensured that each campaign had a stated, measurable objective that

was defined in place and time and had a before/after measurement as

backup. Second, after collecting data across years and countries, I categorized

all campaigns by objective and ran analytical modeling to

quantify the link between each objective and profits, accounting for

country differences. Third, I recommended an improved allocation in

the direction of the findings.

The third story I want to share involves an Asian manufacturer of

consumer durables who had only sixty employees and nobody in

charge of data maintenance, let alone of the analytics to make them

actionable. Managers were overwhelmed by the hundreds of online

metrics regarding their paid, earned, and owned media, and had little

insight in the exact costs or returns of their offline marketing, which

makes up 85 percent of their budget. When sales quotas loomed, they

would often “shoot from the hip”—doubling spending on marketing

actions that were untargeted and probably inefficient. A nagging feeling

was telling them they might be increasing sales, but at the expense

of profits. Moreover, several customers told them they put in an offline

order based on online marketing touch points. Should online be credited

for offline sales? The offline marketing manager definitely did not

think so! I worked with both the offline and the online marketing manager

to discuss how both channels contributed to sales. Based on this

framework, the company put in place the right metrics and collected

the data over time. A marketing analytics dashboard allowed both

managers to play around with spending scenarios and observe the

projected size and timing of profits, not just sales. They agreed on dramatic

budget shifts and saw their company’s profit—and their reputations—

greatly increase!

Across these cases, we see the same three issues:

1. Unclear vision on how objectives relate to company

performance.

2. Uncertainty on the size and timing of expected returns

to marketing investment.

3. Resistance to measurement.

Sound familiar? Wouldn’t it be great to have a comprehensive set of

steps that can help you improve marketing decisions at your company?

How about a book that is steeped in both scientific research and practical

applications to guide you along?

This book is all about marketing analytics dashboards, what they

are, how you can develop, use, and renovate them—and how they help

you make better decisions. This book guides you along a full journey of

data, analytics, dashboard insights, and the action they inspire. In specific

chapters, you will learn the dashboard lingo, how to start the dashboard

initiative, how to build it, design it, and implement it, and how to

renovate the dashboard to maintain its relevance to decision makers in

your organization. This book doesn’t shy away from the tough parts,

both technically and practically, and it gives special attention to hot

topics such as leveraging online data and emerging markets. You will

learn about what worked to overcome obstacles, how specific companies

did it, and what the evidence shows for your situation.

Welcome to the brave new world of marketing analytics dashboards.

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