Media Boot Camp Power Session — Marketing Effectiveness

Panelists:

Marketing Effectiveness – Improving Accountability and Returns to Impact Business Performance

Kelley Quain Troia, Senior Director, Wal-mart

Margaret Beck, Vice President, Williams-Sonoma

Aseem Chandra, Senior VP, Omniture

Michael Dunn, CEO, Prophet

CEO’s Want More

Slide 2

measurability transparency predictability

Slide 3

“Half the money I spend on advertising is wasted;

the trouble is, I don't know which half”

John Wanamaker pioneer of the modern

department store

The Gordian knot of marketing

Slide 4

Don’t Measure What Matters

• Failure to measure why investments succeed or fail

• Inability to separate sales response from brand building impact

Don’t Focus on Decision Making

• Silo-based view of investments managed differently within the organization

• Lack of actionable fact base and processes to reallocate investments by effectiveness

• Insufficient capabilities and skills to analyze data and recommend improvements

Why marketing accountability efforts fail

What’s required?Excellent performance across all 6 value levers

A rigorous system to hold the levers of

marketing accountable

The first imperative…Figure out what you know

Classify your existing

marketing investments

based on your current

“effectiveness” understanding

Budget

$50M

Proven To Be Ineffective

Proven To Be Effective

Unproven But Strategic

Unproven & Non-Strategic

Savings ?

Horizon 1: Diagnostic Findings

Budget

Horizon 2: Findings in Action

Increased by reinvesting wasted spend

Ineffective Due To Execution

Fix ineffective execution through capability building

Qualify new activities through experimentation

Use structured testing to validate unproven strategic

spend

$44M

Marketing Intent

Change in Perceptions, Availability, Incentives

Present & Future

Business Results:

Revenue, Profit, Share

Value-Creating

Behaviors:

Penetration, Loyalty, Multiple

Purchase, Recommend

Present & Future

Business Results:

Value-Creating

Behaviors

Marketing Intent

A Clear Path to Value…

Start at the top…Be disciplined about articulating a clear path to value

Go home or get real…Assess your real and perceived barriers to better measurement

Five common barriers have

been identified that typically get in the way

of better measurement

Time-Poor

Analytics-Poor

Process/Governance-Constrained

Data-Poor

Capability-Constrained

The Experts

Harried, but Trying

Horsepower Seeking

Not a Priority

Tactical Outsourcer

Data Starved

Which segment best describes your company?

Test and control…Build a smart & pervasive experimentation capability

0

10000

20000

30000

40000

50000

60000# of Tests Piloted and Executed in a Given Fiscal Year

Adopt an experimentation mindset to both

close your knowledge gaps around current

investments and qualify new

activities

A holistic path forward…Systematically build and improve capabilities, processes, analytics

Analytics

-800

-600

-400

-200

+0

+200

+400

+600

Cable TV

Search

Promotional E-Mail

Outdoor

Guerilla Tactics

Test Spending

Cable TV

Search

Promotional E-Mail

Outdoor

Guerilla Tactics

Test Spending

Total Investment by Vehicle ($M)

Tot

al #

of i

ncre

men

tal O

rder

s

Processes

Investment Management

Process

Investment Management

Process

A: Define Required Results

A: Define Required Results

B: Create Measurable Benchmarks

B: Create Measurable Benchmarks

D: ActD: Act

F: Debrief Success &

Failure

F: Debrief Success &

Failure

C: AuthorizeC: AuthorizeE: AnalyzeE: Analyze

Capabilities

Data & IT Systems Analysis & Metrics Strategy & Content In-Market Execution

Slide 11

The broader horizon…great marketing decisions and bottom line growth

Slide 12

Every Journey… Begins with the First Few Steps

We are at ground zero

1. Find the money and put it in the right buckets

2. Take a first pass at effectiveness evaluation using existing data & tools

3. Commit to a 2-pronged agenda of analytics and experimentation to close your knowledge gaps

We made a few attempts but have stalled

1. Do an audit of capabilities, process and analytics to identify key barriers

2. Put a program in place to address the most pressing barriers

3. Get a clear win by decisively answering 1 or 2 of the highest priority investment questions

We want to turn this into a competitive weapon

1. Embrace experimentation as a critical core competency

2. Focus on efficient processes and tight linkages across the value levers

3. Tackle the sales vs. equity response measurement challenge with gusto