marketing analytics: 5 things every cmo should know

Marketing Analytics:

5 Things CMOs Should Know

Peter Krieg, President and CEO

Thursday, June 27, 2013

The Home Stretch

2 weeks, 5 webcasts, improved marketing effectiveness

Series Schedule

1. Transformational Marketing Mix Optimization Using a Virtual Marketplace

Presenter: Jeff Maloy, Senior Vice President and Chief Marketing Officer

Available On Demand: brighttalk.com/webcast/1336/76329

2. Using a Virtual Marketplace to Evaluate Your Marketing Strategy

Presenter: Eric Paquette, Senior Vice President „

Available On Demand: brighttalk.com/webcast/1336/76331

3. Optimizing Your Media Plan for the Bought-Owned-Earned World

Presenter: Rolf Olsen, Vice President

Available On Demand: brighttalk.com/webcast/1336/76333

4. Leveraging Marketing Investments with Marketing Mix Modeling

Presenter: Irina Pessin, Managing Partner, Data2Decisions US

Available On Demand: brighttalk.com/webcast/1336/76333

5. Marketing Analytics: 5 Things Every CMO Should Know

Date: Thursday, June 27

Time: 1 pm EDT

Presenter: Peter Krieg, President and CEO

For a PDF of this presentation and our advertorial on using big data for marketing planning…

Email ami.bowen@copernicusmarketing.com

Who am ?

Peter Krieg

President and CEO

Copernicus Marketing Consulting & Research

Peter Krieg is a co-founder of Copernicus. With over 30 years of experience as a marketing and research consultant,

he is responsible for many of the firm‟s largest accounts and spearheaded the company‟s expansion into Latin

America and more recently Dubai, U.A.E. He has given many speeches at professional conferences in the U.S.,

Europe, Latin America and the U.A.E. and has written numerous articles in marketing and advertising journals and

magazines. The topics have included: brand strategy, research methodology, more effective implementation of

marketing programs, digital strategy and product/service optimization. He is the co-author of Counterintuitive

Marketing: Achieve Great Results Using Uncommon Sense (Free Press, 2000), Market New Products Successfully

(Lexington Books, 2006), and Your Gut is Not Smarter Than Your Head (Wiley, 2007).

His latest work is a soon-to-be-published paper on the relationship between blogging engagement and cross-

category personal influence, a study based on a Copernicus R&D investigation among 800 adult Americans.

The Marketing Analytics Spectrum

Simple Correlations

A/B Testing

Advanced analytics Predictive analytics

What I will

focus on today

What are CMOs thinking about big data?

More than 70% of CMOs feel underprepared

to deal with the data explosion (IBM Global CMO Study)

Less than 40% of CMOs "say they routinely

gain insight from their analytics.” (MarketingSherpa)

Only slightly more than 20% claim to be

highly effective at uncovering new insights to

generate business value (IBM Marketing Exec Survey)

5 Things Every CMO Should Know

1. Involve analytics team early and often

2. Turn big data into smart data

3. Organize around the customer

4. Take a forward view

5. Visualize it

6. Combine Art and Science

The Biggest Mistake Marketers Make….

“We’re not getting what we need.”

“We need something that will make the biggest

difference to our business.”

“We need something that really makes sense of how

our marketing works.”

Picking the Tool Before Picking the Problem

1. Involve Analytics Early and Often

Starting out thinking about models is like:

“Analytics groups are not involved early enough in the process. We need to get ourselves more integrated up front.”

- Mike Vitti

COO, Copernicus

To AdAge

1. Involve Analytics Early and Often

1. Involve Analytics Early and Often

All analytics projects should begin with a

clear understanding of what is overall

business strategy and what are the

problems/challenges that need to be

addressed?

Case in Point: Benefits of the Early Call

The Question of the Hour for CMOs….

How do you get from big

data to generating

insights that address

business goals and

problems?

2. Turn Big Data Into Smart Data

The outputs of any analytical tool are only as

good as the inputs that go into it.

2. Turn Big Data Into Smart Data

How to turn “big data” into “smart data”?

Answer: 3W’s:

When

Where

Why

Volume

Velocity

Variety

3 V’s

Economic

Data

Environ-

mental Data Media Costs POS

Data

Price/

Promotion

Data

Competitive

Data

GPS/RFID

Data

Survey Data

2. Turn Big Data Into Smart Data

Leverage first party data to fullest extent, supplement with third party data as needed.

FIRST BASE

FIRST PARTY

THIRD BASE

THIRD PARTY

Your data: Website data

CRM data

Subscription data

More accurate, and less costly

Customer understanding

Cross-selling and up-selling

Owned by others and purchased: Cookie data

Registration data

Modeled/Inferred data

Scale and new audiences

Market sizing

Customer targeting and acquisition

2. Turn Big Data Into Smart Data

Know what data matters

Know what data is good/valid

Know the limits of any data

– Don‟t be afraid to say (or hear) “I don‟t know exactly”

IF YOU‟RE ON THE WRONG TRAIN,

EVERY STOP IS THE WRONG STOP

3. Organize around the customer

The “future of marketing,” isn‟t in the

accumulation of big data.

The future is in organizing it around the

customer.

Requirements For Improving ROI All Along the Path To Purchase

Understanding of the customer – WHO?

– WHY?

Understanding of the customer’s journey – WHAT?

– WHEN?

– WHERE?

Understanding of the synergistic effects of different media on customer behavior

3. Organize around the customer

Data is only powerful when organized and structured

The consumer—and his/her journey—should be the organizing principle

Inspiration Exploration Evaluation Transaction Reflection

Household

purchase data

Paid media

Owned media

Our Target (Segmentation Study)

Behavioral/

A&W data

Search data

Web data

Price/

Promotion

data

Competitive

data

Brand Health

Tracker

POS Data Social data

Loyalty card

data

Path-to-Purchase:

Models can be better informed with your existing customer research

Market Segmentation

Brand Advocates

Shopper Journey

Advertising Tests

Brand Tracking / Drivers

Analysis

Creative / Message Tests

Your market segmentation provides a wealth of useful information

Happy Families

Struggling to Get By

Always an Angle

Simple & Settled

Savvy Sophisticates

# of U.S. Adults 38MM 38MM 48MM 32MM 44MM

Annual Spend $133 $131 $98 $95 $71

% of Category Spending

(Index)

26%

(136)

24%

(127)

21%

(95)

14%

(92)

15%

(69)

Current Share 27% 20% 16% 16% 14%

% of Current Opportunity

(Index)

37%

(195)

22%

(107)

19%

(71)

10%

(63)

10%

(45)

Different Demographics

Different Media Behaviors

Different in Needs/Motivations

Different Buying Occasions

Different Channel / Store Preferences

Map out the Customer Journey

What are the steps?

When are different media / touch

points used?

What is sought?

Are there seasonal elements?

Does advertising reach people

with the right message during the

right moments and mindset?

Understanding the synergistic effects of B/O/E media

25

4. Take a forward view

Most analytics is backward-looking

Models the future based on the past

We need tools/models that are more

forward-looking

In today‟s dynamic marketplace, this is no longer sufficient.

Experimentation is only an opportunity if you consider and test

many different options

“Big testing is often only valid if the customer

experiences in which it’s executed are good.

If you run a split-test of two concepts, say offer A

(a price emphasis) and offer B (a quality emphasis), testing

a hypothesis of which will motivate a particular customer

segment more — but both experiences are kind of crappy

— then the results of your test are useless.”

Scott Brinker,

Chief Marketing Technologist Blog

A virtual market, based on behavioral

“rules”

Allows us to simulate how consumers

may react to:

– Marketing and Media

– Each other (networking effect)

– Other “environmental” variables

Not bound by historical results

4. Take a forward view

Agent-Based Modeling and

Simulation (ABMS):

Bought Owned Earned

4. Take a forward view

Allow us to test and evaluate new, unknown, experimental, and “stretch”

marketing plans:

What if… Go after young dudes (instead of their

moms)?

Double our digital budget?

Dramatically improve “customer service”?

Competitor loses their mind?

The warm weather never gets here?

5. Visualize It

Within the data explosion, findings need to come alive in powerful visualization.

Word clouds

Info-graphics

Graphical User Interface (GUI)

To: Bar charts

Pie charts

Line graphs

From:

5. Visualize It

Interactive dashboards allow for “real-time” accessibility—and visualization—of data at

your fingertips.

6. Combine the Art and Science

“All models are wrong,

but some are useful”

George E. P. Box

6. Combine the Art and Science

“Now you have a marketing analytics shop and a

market research shop. All of these groups are

critical pieces to the puzzle. But they may not have

worked together in the way you need them to in

order to get the right decisions.”

Matthew Jauchius

CMO, Nationwide Insurance

6. Combine the Art and Science

Need to move from:

Marketing Data to Marketing Intelligence to Marketing Decisions

Takes a diverse, talented team

The What So What Now What

Data and reporting

Consumer Understanding

and Insights

Modeling & Simulation

Marketing and Sales

5 Things Every CMO Should Know

1. Involve analytics team early and often

2. Turn big data into smart data

3. Organize around the customer

4. Take a forward view

5. Visualize it

6. Combine Art and Science

For a PDF of this presentation and our advertorial on using big data for marketing planning…

Email ami.bowen@copernicusmarketing.com

PETER KRIEG, President & CEO

(203) 831-2373

peter.krieg@copernicusmarketing.com