dashboarding marketing channel roi and and making optimal channel spend decisions every week 2015...

Dashboarding Channel ROI

(…and making smart channel spend decisions

every week)

Etail West, Palm Springs, CAFebruary 19, 2015

2014 Budget Review

Wyndham divisions and family of brands

[email protected] @jon_isernhagen

World’s largest hotel company, based on

number of hotels

World’s largest lodging loyalty program,

based on participating hotels

Approximately 7,500 hotels and 646,900

rooms

More than 121 million room-nights sold in

2013

More than 9% of U.S. hotel room supply

World’s largest vacation ownership developer

and marketer

Approximately 185 vacation ownership

resorts with approx. 23,000 units throughout

North America, the Caribbean and South

Pacific

More than 900,000 owners of vacation

ownership interests

World’s largest vacation exchange network

World’s largest professionally managed

vacation rentals business

Approximately 107,000 properties in nearly

100 countries

More than 3.7 million exchange members

Send approximately 4 million consumers on

vacation through vacation rentals

2014 Budget Review

Top Worldwide Lodging Franchisors


# of Rooms # of Hotels

InterContinental Hotels Group 675,982 4,602

Marriott International 660,394 3,800

Hilton Worldwide 652,957 3,966

Wyndham Hotel Group 627,437 7,342

Choice Hotels International 538,222 6,725

Accor SA 450,487 3,516

Starwood Hotels & Resorts Worldwide 335,415 1,134

Best Western International 312,467 4,050

Shanghai Jin Jiang International Hotels 214,796 1,401

Home Inns & Hotels Management 214,070 1,772

2014 Budget Review

Session description

Optimizing Campaign Measurement And Generating Dashboards To Share Your Data Insights:

1) Getting the right model for measurement

2) Measuring channels’ effectiveness at driving conversion and understanding their impact on one another

3) Getting the right mix of tools to enable consistent measurement


2014 Budget Review

Presentation agenda

1) Marketers’ mission

2) Dashboarding channel ROI

a) Spend

b) Variable contribution

c) Attributiona) mechanics

b) vendors

3) Tactical guidance of the marketing team

a) Performance accountability

b) Eyes on glass

4) Takeaways


2014 Budget Review

CEO’s/our duty to the (publicly-traded) company

• Brand awareness / sentiment?

• Client loyalty?

• Employee satisfaction?

• Traffic to the site?

• Shopper movement down the funnel?

• Transaction volumes?

• Shareholder value?

• Customer focus / personalization?

• Community involvement through charitable actions?


Maximize which one of the following metrics….

2014 Budget Review

Increase spending until $1 out brings $1 back…

….spend-spend-spend-spend-spend-stop


2014 Budget Review

…which is the point at which incremental ROI = 0%

- 8 -

ROI = (VCM – Spend)Spend

Abbreviation Term Definition

ROI Return on InvestmentIndicator of investment profitability. Positive = good.

VCM Variable Contribution MarginThe amount of profit driven by a given transaction.

Spend Channel SpendThe amount spent driving traffic to the site during the period in question

Calculated over a specified time period of investment and return.


2014 Budget Review

Our goal: an ROI Dashboard

Channel* Desktop Tablet Mobile

Brand 20%

Brand SEM 62% 51% 38%

Display -5% -12% -7%

Display - Retargeting 26% 25% 29%

Email 250%

Meta search 18% 22% 10%

Non-brand SEM -30% -18% -40%

SEO 500% 520% 390%

Social media -5% -15% 15%

- 9 -

*of impression/click, not necessarily of consumer conversion


2014 Budget Review

Presentation agenda



a) Spend



b) vendors



b) Eyes on glass

4) Takeaways


2014 Budget Review


Spend

- 11 -

Which spend do you include?


2014 Budget Review

Marketing ≈ Farming

1) Seed = impressions

2) Transactions = fruit

- 12 -

…but

marketers plant

& harvest constantly.


2014 Budget Review

spendspendspendspend

How changes in spend can mess up ROI

- 13 -

$

time

profit

impact impact

spend

impact

Jan Feb Mar


2014 Budget Review

Variable Contribution Margin (“VCM”)

- 14 -


1) What is the profit from each transaction?

2) Which channels deserve part/all of the

credit for driving each transaction?


2014 Budget Review

VCM: the profit on each transaction

= Transaction revenue - variable non-marketing expenses:

• Revenue: – Supplier Commissions;

– GDS incentives;

– Overrides (lumpy: average/booking must be assumed)

– Media (not transaction-driven, but has to be modeled in somewhere)

– Attached bookings / Lifetime value: try to gauge value without double-counting

• Expenses: – Website hosting/capacity costs

– Data processing expenses

– Other expenses which vary by transaction or site activity volume

- 15 - [email protected] @jon_isernhagen

2014 Budget Review

Which treatment(s) triggered the purchase?

"Half the money I spend on advertising is wasted;

the trouble is, I don't know which half.“

-John Wanamaker Father of Modern Advertising


2014 Budget Review

How badly do you want to know?

Raylan: You'll pay to find that out.Boyd: What are you packing?


2014 Budget Review

Choosing your attribution strategy

Do you want/need true attribution*?

Do you havedata guys?

Do they havebandwidth for this?

Yes

No

No

Use your sitemetric solution’s

attribution

Yes

YesHire a vendor

Can you accessyour data?

Yes

No

*Do you have:1) Large enough budget?2) Multiple channels?3) Belief in ROI “knowability?”

DIY

No


2014 Budget Review

• Sends• Opens

Collecting the necessary data

Analysis space

• Clicks• Visitors

• Transactions• VCM• Media impressions

Site metrics tool

Back office system

• Channel-specific phone #s

Email service provider

Call Center IVR

• Impressions• Clicks• Spend

Display ad server

e.g. SAS, Revolution Analytics,SPSS, Teradata Warehouse Miner

SEM bid management tool


• GRPs• Spend

Television plan


Meta search feeds

Spend

Manual spend entry table


2014 Budget Review

Connecting the necessary data

Transactions Profiles Customers

Sessions

∞ 1∞ 1Clicks:TransactionsClicks ∞ 11 ∞

∞ 1∞ 1

Calls

Sends

Opens∞1

∞1

Email

IVR

GRPs

TV plan

Impressions

Ad server

Impressions

∞ 1

∞ 1

∞ 1

Back officeSite monitoring tool CRM system

1 ∞


2014 Budget Review

Presentation agenda



a) Spend



b) vendors



b) Eyes on glass

4) Takeaways


2014 Budget Review

Forrester surveys of algorithmic attribution vendors


2012 2014

2014 Budget Review

Criteria for attribution vendor evaluation

1) Independence / media neutrality

2) Independent data collection

3) Cross-device natively

4) Brand search & affiliate conversion controls

5) Programmatic capability

6) Ad viewability

7) Time to onboard

8) Cost


2014 Budget Review

Independence – Media agnostic

Vendor Independent Score

Abakus Yes 1

AOL/Convertro No 0

C3 Metrics Yes 1

eBay/Clearsaleing No 0

Adometry/Google No 0

Marketing Evolution Yes 1

Marketshare Yes 1

Rakuten DC Storm No 0

Visual IQ Yes 1


Vendors owned by Media companies are not considered neutral and scored with a value of 0. Independent vendors are scored with the value of 1.

2014 Budget Review

Independent data collection

Vendor Collect own data Score

Abakus No 0

AOL/Convertro Yes 1

C3 Metrics Yes 1

eBay/Clearsaleing Yes 1

Adometry/Google Yes 1

Marketing Evolution No 0

Marketshare No 0

Rakuten DC Storm Yes 1

Visual IQ No 0


Vendors which collect their own data via tags are scored with the value of 1. Vendors which do not collect data are scored with a 0.

2014 Budget Review

Cross-device visibility native to the platform

Vendor Cross-device visibility Score

Abakus No 0

AOL/Convertro Yes 1

C3 Metrics Yes 1


Adometry/Google No 1*


Marketshare No 0


Visual IQ No 0


Vendors which provide cross-device native to the platform for no additional fee are scored with a value of 1, other vendors who either do not provide the service or who require an additional vendor are scored with a value of 0. (*coming in mid-2015)

2014 Budget Review

Brand search & affiliate conversion controls

Vendor Conversion controls Score

Abakus No 0

AOL/Convertro Yes 1

C3 Metrics Yes 1




Marketshare No 0


Visual IQ No 0


Brand search, Affiliates and other vendors dominate activity at the bottom of the funnel. Vendors which are able to control for this activity within the model are scored with a value of 1, vendors which have not addressed this issue are scored with a value of 0.

2014 Budget Review

Programmatic capability

Vendor Programmatic Score

Abakus No 0

AOL/Convertro Yes 1

C3 Metrics Yes 1




Marketshare No 0


Visual IQ No 0


Programmatic capability requires independent view tags and integration with trading desks and Ad Networks. Vendors which have this capability are scored with the value of 1, vendors which do not are scored with a value of 0.

2014 Budget Review

Display ad viewability audit

Vendor Display audit Score

Abakus No 0

AOL/Convertro No 0

C3 Metrics Yes 1


Adometry/Google Yes 1*


Marketshare No 0


Visual IQ No 0


Greater than 50% of all display ads are never seen. Vendors which have integrated viewability which accounts for cross-domain iframe ads are scored with a value of 1, other vendors which cannot determine viewability are scored with a value of 0. (*coming in late 2015)

2014 Budget Review

Time to onboard

Vendor Time to onboard Score

Abakus 1 month 1

AOL/Convertro 2 months 0

C3 Metrics 7 days 1

eBay/Clearsaleing 1.5 months 1

Adometry/Google 3 months 0

Marketing Evolution 1.5 months 1

Marketshare 1 month 1

Rakuten DC Storm 3 months 0

Visual IQ 3 months 0


Time to onboard is crucial as recommendations from any platform cannot be considered until the platform is fully live. Vendors which are able to onboard in less than 2 months are scored with a value 1. Vendors requiring 2 months or more are scored with a value of 0.

2014 Budget Review

Cost

Vendor Cost/year Contract period Score

Abakus $50K - $150K Yearly 1

AOL/Convertro $60K - $1M Yearly 0

C3 Metrics $60K - $150K Monthly 1

eBay/Clearsaleing $60K - $850K Yearly 1

Adometry/Google $275K - $300K Yearly 0

Marketing Evolution $150K - $1M Yearly 1

Marketshare $200K - $1M Three-yearly 1

Rakuten DC Storm $170K Yearly 0

Visual IQ $325K - $1M Yearly 0


Vendors with a minimum yearly fee of less than $100,000 are scored with a value of 1. Vendors with minimum yearly fees exceeding $100,000 are scored with a value of 0.

2014 Budget Review

Final scores

Vendor Score

Abakus 3

AOL/Convertro 5

C3 Metrics 8

eBay/Clearsaleing 3

Adometry/Google 5

Marketing Evolution 2

Marketshare 2

Rakuten DC Storm 1

Visual IQ 2


2014 Budget Review

Running the process

1) For each site visitora) Assemble visit history

b) Create variables to represent:

i. Channel impressions

ii. Channel clicks

iii.Past purchases

2) Regress or use machine learning algorithma) Ascertain which channel touches predict booking

b) Give VCM credit to causal channels

3) Calculate ROIa) Use each channel’s VCM and spend

b) Where ROI is positive, spend up

c) Where ROI is negative, cut spend or change tactics


2014 Budget Review

ROI Dashboard

Channel* Desktop Tablet Mobile

Brand 20%

Brand SEM 62% 51% 38%

Display -5% -12% -7%

Display - Retargeting 26% 25% 29%

Email 250%

Meta search 18% 22% 10%

Non-brand SEM -30% -18% -40%

SEO 500% 520% 390%

Social media -5% -15% 15%

- 34 -

*of impression/click, not necessarily of consumer conversion


2014 Budget Review

Presentation agenda



a) Spend



b) vendors



b) Eyes on glass

4) Takeaways


2014 Budget Review

The Concept: “One throat to choke.”

UVs x Transactions x Profit = Planned

UV Transaction Profit


If this misses… CMO strangles….

UVsThe channel managers (SEM, SEO, Display,

Brand, Email, Meta, Social)

ConversionThe site owners (Site performance, A/B

testing, Merchandising, Content)

AOV Merchandising, Content

2014 Budget Review

The Forecast/Plan

In order to give context to your marketing and site performance, you’ll need a plan/prediction, by:

• Date;

• Channel;

• Device type, and;

• Line of business (if applicable).

For these metrics:

• UVs,

• Conversion

• Contribution/transaction


2014 Budget Review

The Process

On a weekly basis:

1) Solicit channel managers’ predictions for:

a) Spend

b) UVs

2) Flash forward one week:

a) Compare predictions with actual results

b) Take appropriate corrective actions


2014 Budget Review

Channel performance by line of business


2014 Budget Review

Waterfall: drivers of performance change


This week last year This week this year

Factors/Contributors to the change

2014 Budget Review

Eyes on glass: historical comparison overlays


2014 Budget Review

Presentation agenda



a) Spend



b) vendors



b) Eyes on glass

4) Takeaways


2014 Budget Review

Takeaways

1) Always know how your activities boost profits

2) Focus on:

a) What [spend/efforts] you need to change

b) What site functionality problems you need to fix

3) Know the drivers of your site’s performance:

a) Use market research/market share resources

b) Maintain a log of performance-impacting events

c) Understand what’s working for you & competitors

4) Place every metric in a context (vs. LY, vs. plan…)

a) Report generation is a commoditized activity

b) Curation for senior management is the killer app.


dashboarding marketing channel roi and and making optimal channel spend decisions every week 2015...

Marketing

vacation ownership resorts

wyndham hotel group627

hotel franchisor

smart channel

budget reviewhi

budget reviewit

isernhagen2014 budget

choice hotels international538