MMM5 Telecom Mobility Message-Mix Modeling
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
The Bigger Story1. This is about an analytics/big data exercise designed to measure
the ROI or returns to marketing investment. We call it message mix modeling or MMM.
2. MMM is all about using the power of data and analytics to help STC communicate the right message to its customers at the right time with just the right level of investment, and no more
3. One of the more famous quotations in marketing comes from Mr. John Wannamaker, who said “I know that half of my advertising is wasted, I just don’t know which half”.
4. MMM will eliminate the uncertainty in your marketing investment, it will uncover the waste and direct you to spend your resources in the most effective fashion.
5. MMM is one of the most positive payback projects in which you can engage. We will literally save you millions and help you direct your resources such that marketing investment will be doing what it is intended to do: drive growth for your brand!
2
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
National Message Counts
0
5
10
15
20
Nat
iona
l Mes
sage
s
3
18
78
10
MMM4MMM3MMM2MMM1
• We’ve made substantial progress in reducing the number of messages since 2008 with the average month now being between 7 and 8.
Note: Covers all incremental National Television, Magazines, and Newspapers from TOTAL MESSAGING MASTER REPORT.
MMM5
Recent
Average 7.5
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Summary of Findings
4
• Over 95% of media activity was message-coded for MMM5 slightly changing the results versus MMM4 (83% of media there).
• The latest four quarters ending 2011Q2 were saw spending behind traditional Other Messages (driven by ABS and External Affairs) increase 38% while Value declined36%.
• Overall contribution due to media was constant versus same period year ago at 24%, but overall gross adds increased by 3.1% based on significant Baseline growth.
• During the same latest four quarters, Exclusive Handsets saw significant increases in contribution with only minor declines in effectiveness while Phone Sales saw both a drop in contribution and effectiveness.
• Isolating on Q1/Q2 2011, ABS was the most effective (Gross Adds per $1,000 spend) messaging indexing at 194 while External Affairs was close to average with an 81 index.
• Optimization of the incremental messaging during Q1/Q2 2011 (excluding direct mail and online activity) suggests a total of 8 concurrent messages with 4 on television - this is closely aligned with current activity.
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Message Spending Trend versus YAGO
5
Note: Uncoded includes Paid Search as well as Outdoor.
$0
$100
$200
$300
$400
2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2
Mill
ion
s
Quarterly Spend
• The latest four quarters were dominated by the change in spending behind Other (ABS and External Affairs) at +38% while Value was -36%.
• Devices growth continues at the declining trend for Network.
-10%
+19%
-36%
+38%
+17%
-100% 0% 100%
10Q3-11Q2 versus 09Q3-10Q2
ABS & External Affairs
Network Trend
Devices Growth
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Message Contribution versus YAGO
6
4%9%
5%
2%
4%
3%
15%
58%
09Q3-10Q2 Gross Adds
• Overall contribution due to media was constant at 24% with growth in Other (led by ABS and External Affairs) making gains against Value.
• Baseline as a contributor grew against the iPhone Effect which was in steep decline until 11Q2.
4%9%
4%
3%
4%
4%
12%
60%
10Q3-11Q2 Gross Adds
24% 24%
Note: Uncoded includes Paid Search as well as Outdoor.
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Message Contribution versus YAGO
7
• Overall gross adds increased by 3.1% in 10Q3-11Q2 versus the previous four quarters with a significant Baseline growth (3.8%).
• Other Messaging (mostly ABS and External Affairs) as well as Uncoded(mostly Paid Search) overcame the offset in Network and Value.
0.25
0.19
0.160.17
0.19
0.18
0.21
0.22
0.08
0.08
0.14
0.10
0.10
0.07
0.09
0.08
0.50
1.00
1.50
2.00
2.50
3.00
2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2
Gro
ss A
dd
s in
Mill
ion
s
Quarterly Contribution
+3.8%
-1.7%
0.5%
0.9%
1.0%
-1.1%
+0.4%
-0.7%
+3,1%
-0.2 0.0 0.2 0.4
Gross Adds in Millions
10Q3-11Q2 versus 09Q3-10Q2
Total
Percentages add to Total
Note: Uncoded includes Paid Search as well as Outdoor.
ABS & External Affairs
Baseline Trend
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Message Effectiveness versus YAGO
8
• Messaging Effectiveness (Gross Ads per $1000 spend) for existing messages is generally falling as new messages are introduced.
-6%
-9%
NEW
-5%
+214%
-15%
-8%
-31%
0 5 10
Other Network
Network Coverage
4G Network
Fastest 3G
Other Devices
Phone Sale
Iphone
Exclusive Handsets
Devices and Network Effectiveness
-11%
-17%
NEW
+92%
+2%
NEW
+59%
-67%
0 5 10
Data Service
Other Brand
External Affairs
Rethink Possible
Other B2B
ABS
Other Value
Family Talk/Rollover
Value and Other Effectiveness
<1.3% of Spend
<0.3% of Spend
Note: Uncoded includes Paid Search as well as Outdoor.
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Message Effectiveness versus YAGO
9
Other B2B
Rethink Possible
Data Services Exclusive HandsetsiPhone
Phone Sale
Other Devices
Fastest 3GNetwork Coverage
Other Network
Family Talk/Rollover
Other Brand Other Value
All Other
Uncoded
0
5
10
0.0 0.2 0.4
Effe
ctiv
enes
s
Contribution in Millions
09Q3-10Q2
Note1: Size of bubbles is the relative spending level, Effectiveness is Gross Adds per $1,000 spend.
Note2: Uncoded includes Paid Search as well as Outdoor.
Other B2B
Rethink Possible
Data Services Exclusive HandsetsiPhone Phone Sale
Other Devices
Fastest 3G
Network Coverage
Other Network
Family Talk/Rollover
Other Brand
Other Value
All Other
UncodedABS
ExternalAffairs
4G Network0
5
10
0.0 0.2 0.4
Effe
ctiv
enes
s
Contribution in Millions
10Q3-11Q2
• Exclusive Handsets saw significant increases in contribution with only minor declines in effectiveness.
• Phone Sales saw both a drop in contribution and effectiveness.
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Exclusive Handsets Messaging Detail
10
• Exclusive Handset messaging (excluding iPhone) took off in 2010.• Effectiveness for Exclusive Handsets was highest at 3.0 during 2010Q3
when focus was distinctly on Blackberry Torch.
0
1000
2000
3000
4000
2010Q1 2010Q2 2010Q3 2010Q4
Tota
l GR
P A
lloca
tion
Blackberry Other Blackberry Torch HTC Suround LG Quantum Motorola Backflip Samsung Other Samsung Focus Samsung Mythic
Note: Spending in $000’s, Effectiveness is Gross Adds per $1000 spent.
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Message Effectiveness Q1/Q2 2011
11
Data Services
Exclusive Handsets
iPhone
Phone Sale
Fastest 3G
Network Coverage
Other NetworkFamily Talk/Rollover
Other Brand
Other Value (mostly DM) Uncoded
ABS
ExternalAffairs
4G Network
0
2
4
0.00 0.12 0.24
Effe
ctiv
enes
s
Contribution in Millions
Weighted Average 1.75
• ABS was the most effective (Gross Adds per $1,000 spend) messaging during Q1/Q2 2011 indexing at 194 versus the weighted average.
• External Affairs was close to average with an 81 index on the same scale.
Mostly Paid Search
Most Effective 3.44
Note1: Size of bubbles is the relative spending level, Effectiveness is Gross Adds per $1,000 spend.
Note2: Uncoded includes Paid Search as well as Outdoor.
Driven by $49 iPhone
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Message Synergies Q1/Q2 2011
12
• Device and Network generate the greatest synergistic lift at 0.7%.• Device and Value as well as Network and Value are almost equal at 0.6%.
5.0%
2.3%
0.7%
0%
2%
4%
6%
8%
10%
Devices Network Synergy
Lift
Ove
r B
asel
ine
2011 Device and Network
5.0%
1.6%
0.6%
Devices Value Synergy
2011 Device and Value
2.3%
1.6%
0.6%
Network Value Synergy
2011 Network and Value
Note: Lift is incremental gross add contribution divided by baseline.
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Message Optimization Q1/Q2 2011
13
• Optimization of incremental messaging (excluding direct mail and online activity) suggests a total of 8 concurrent messages with 4 on television.
• Other messaging (represented mostly by Brand messages) represent the largest number of messages with 3.
2
1
1
1
1
1
1
0
2
4
6
8
Television Newspapers Magazines Radio
Incr
emen
tal M
essa
ges
4
7
8
Note: Ordered by incremental rules (see appendix).
6
Brand
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Message Recommendation Q1/Q2 2011
14
• Excluding Direct Mail, a pure mathematical optimization suggests a 22% decline in concurrent messages from 10.65 to 8.32 which was converted to the clear recommendation of 8.00.
Note: Averages are based on weekly DMA-level activity, ordered by incremental rules (see appendix).
Proposed Messaging
Incr
emen
tal M
essa
ges
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Across Media Channels, there are significant synergies and benefits of integrated marketing
0
0.5
1
1.5
2
2.5
3
Independent Impact
Simultaneous Activation
Synergy
Local Newspaper
National TV
0
0.1
0.2
0.3
0.4
0.5
0.6
Independent Impact
Simultaneous Activation
Synergy
Banner Ads
Paid Search
Marketing Synergies National TV & Local Print
Marketing Synergies Digital Banner Ads and Paid Search
15
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
0.37
0.03
0.72
0.04
0.42
0.02
0.15
0.07
0.0
0.5
1.0
1.5
2.0
National Local
Gro
ss A
dd
s in
Mill
ion
s
09Q3-10Q2
Message Contribution by Source
16
0.33
0.02
0.77
0.03
0.32
0.02
0.26
0.06
National Local
10Q3-11Q2
• Both National and Local sources as a whole are fairly stable.• National Value messaging declines by roughly 24% (0.32MM versus
0.42MM), but Other (B2B and Brand messages) makes up the difference.
Represents 20% of total Gross Adds Represents 20% of total Gross Adds
Note: Uncoded includes Paid Search as well as Outdoor.
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Next Steps
17
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Next Steps
18
• Generate Scenarios: The models can be leveraged to explain retrospective changes in the allocation of message spending and their impact on gross adds … with constraints defined, we can also estimate an optimization for the budget if requested.
– Scenario definitions before October 6th (two weeks)– Follow-up delivered via email before the week of October 17th
• Process data for MMM5B/6: Alpha brand finance data is expected to move to monthly, MEC full media data is starting to come in monthly, BLA message coding has started already … delivery phase October to December.
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Appendix
19
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Sources of Information
20
• Mobility Gross Adds: Cluster weekly totals from MEC and Alpha brand Internal Sources (post-paid consumer).
• Actual Spending: National quarterly totals by media from Alpha brand Finance
• Cluster/Regional Spending: DMA weekly totals by media (television, magazines, newspapers, radio, outdoor, online display, paid search, and e-comm) from MEC (Kantar and Atlas data).
• Cluster/Regional Target Population: DMA 18-54 adult population (target audience) from ACNielsen
• Cluster/Regional Spending: National and cluster drop totals for direct mail from Alpha brand (Internal Sources) and Accenture.
• Message Coding: National and Local (DMA) weekly execution from BLA (harmonization of wear-out chart, rotation summary, proof of performance reports, Alpha brand creative descriptions, etc.) for television, magazines, newspapers, radio, online display, e-comm, and direct mail (95% of 2010 spending).
• Other Data for Modeling but not Presented Here: Halo Wired spending (Alpha brand Finance and MEC Kantar data) as well as competitor (Verizon, T-Mobile, and Sprint) spending (MEC Kantar data).
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Message Coding
21
• Media Coded: television, magazines, newspapers, radio, online display,e-comm, and direct mail (95% of 2010Q3-2011Q2 spending).
• Message Drivers Defined: network, value/plan, handsets/devices, data services, b2b, brand (new as a driver due to Rethink Possible for MMM4 and External Affairs for MMM5), and other.
• Media Uncoded for MMM5: outdoor and paid search.– Outdoor (2% of 2010Q3-2011Q2 spending) new media during MMM4.– Paid Search (3% of 2010Q3-2011Q2 spending) is agreed to be very
difficult to message code.
Note: Online Display and e-comm are once again message-coded for MMM5.
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Driver Examples Q1/Q2 2011
22
Network (21%) Devices (27%) Value (6%)
“Ski Lift”Getting fast with 4G Network
“Spider – Samsung Infuse” Exclusive Handsets
“Mistake” Value Plans-Unlimited Mobile
to Mobile Calling
Note: Percents above reflect share of total 2011 spending.
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
Incremental Messages
23
0
4
8
12
2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2
Quarterly Average Incremental Message Counts
All Other
B2B
Brand
Data Services
Value
Devices
Network
• Average incremental messages across all media (not just National Television and Print) are growing with the reintroduction of Data Services in the Online Displays and e-comm that were added back to MMM5.
Incremental Ranking RulesNational Television
Local Television
National Newspapers
Local Newspapers
National Magazines
Local Magazines
Local Radio
National Online Displays
National e-comm
National/Local Direct Mail
Note1: Message counting based on all media except Paid Search and Outdoor.
Note2: To be counted, the same message must not appear in a given market and week for a media higher in the incremental ranking rules.
© 2010 Alpha brand Intellectual Property. All rights reserved. Alpha brand, the Alpha brand logo and all other Alpha brand marks contained herein are trademarks of Alpha brand Intellectual Property and/or Alpha brand affiliated companies. All other marks contained herein are the property of their respective owners.
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