whitepaper next generation social and traditional media optimization

8/7/2019 Whitepaper Next Generation Social and Traditional Media Optimization

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Next Generation Media Mix Optimization

Using audience and media management to create certainty inan increasingly uncertain world


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Like clockwork, each year marketing organizations provide

marketing plans and budget recommendations that outline

sophisticated media investments, spanning a growing number of

channels chasing an increasingly fragmented customer and

illusive return on investment.

The world is more complex. Your companys audience your existing and prospective customers have changed and

so must your marketing. Consumers are connected to a greater array of devices and media outlets than ever before.

They Twitter and browse social networks on smart phones, check email in their local coffee shops, and choose from over

100 TV channels every day1. They seek and use information: 51% of U.S. and UK consumers always compare products

and services before a purchase; only 5% rely upon advertising or promotional features for advice2. In this cacophony of

change, 80% of CEOs believe their brand delivers a superior customer experience yet only 8% of their customers agree3.

And, only one in five targeted online ads actually reaches its intended audience4.

These are very difficult questions. Gaps in answers create immense issues: Waste 47% of U.S. ad spend reaches the

wrong audience5. These gaps in delivery accuracy mean that when marketers cant align their target audience strategy

closely to their ad delivery, they make investment decisions based upon averages and educated hunches, causing them

to overspend on low value customers and media channels while under spending on the high value ones. Given the top

30% of a brands customers are typically five times more profitable 6, the inability to create certainty in audience and

media management costs advertisers huge profits.

To address these challenges, many companies are turning to the next generation in media mix optimization, delivering

high-performance audience and media management. Designed to optimize the performance of media mix investments,

the solution takes the guesswork out of planning helping marketers to better orchestrate and execute their

marketing strategy.

W H I T E P A P E R

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Executive Summary:

People have more media choices than ever to research the products and services they buy. CMOs are

challenged to rationalize their budgets and demonstrate increasing ROI while embracing new media anddistinguishing the media consumptions of their customer. Next generation media mix optimization is how

winning marketing organizations will allocate their investments to target high-value audience and media options,

while delivering accurate attribution, cross channel measurement and tools for high-performance planning.


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Challenges to effective

media mix optimization

Todays chief marketing officer is tasked to deliver

increasing results in the face of decreasing or flat budgets,

while also adopting and embracing technology changes

that influence consumers. Here are some of the key

challenges:

Existing media mix optimization

solutions break on several levels

While nearly all top marketing executives have used or

researched solutions in this area, there are many who

have not experienced success or have seen that success

wane in recent years.

The delineation between

traditional mass advertising (ATL Above the Line) and

promotional or addressable-based advertising (BTL

Below the Line) efforts is blurring. The continued increase

in media addressability is delivering new opportunities,

like household based television commercials driven

from advertiser segmentation and data insight. While

optimization efforts tend to focus on either ABT or BTL, in

the end, one consumer is the same person whether they

view a TV commercial or receive a display advertisement.

And, they see your brand as one entity regardless of

organizational and technological silos.

The key to real

optimization is to

reduce wasted ad

impressions on two

dimensions: audience

and media channel.

One of the most

difficult assumptions

of existing media mix

optimization solutions

is that the value of an

W H I T E P A P E R

incremental customer is a static average. The reality is that

only 30% of customers typically return a profit, yet cost as

much to acquire as the 50% that are profit-neutral, or the

20% that actually cost you money to service. To significantly

increase your ROI, consider the impact of customer value

and target your best customers first.

While

advertising agencies and consultants have driven media

optimization solutions for many years, there are issues

to consider:

alignment of business objectives and tend to focus on

the channels of their expertise. This is natural as their

talent also pools around those areas of expertise.

And, while primarily done through test programs,

the connection to actual consumer behavior and

correlation to revenue lift is usually soft, at best.

rely upon superhuman leaps in assumptions and

footnotes in their reports to achieve their mathematical

summations. Also, they tend to focus on either ATL

or BTL programs, limiting their effectiveness to drive

performance and attribution, while fragmenting the view

of current and future customers.

Today, digital media accounts for nearly 35% of the

average U.S. consumers media consumption yet less

than 15% of ad spend is directed toward these new

channels7. Successful media mix optimization solutions

need to drive consolidated answers for BOTH above the

line and below the line investments. Your target audience

doesnt know that line exists and transcends channels

with the greatest of ease. The struggle for marketing

leaders seeking to optimize against this new reality is to

find models adaptive to the rate of change that drive shifts

in media investment and more closely mirror the shifts in

media consumption of their target audience.


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Reaching consumers has become more difficult

The challenge has increased exponentially. There are more

channels, more screens and more data than ever and the

rate of change is increasing. Adoption driven by accessibility

and affordability, technology enables consumers to access

a vast wealth of information, on their terms. Starting in the

last few decades, the trajectory of change has ramped up

fast and is not projected to slow down.

Selecting one of the top spend channels, TV, we can

see dramatic intra-channel shifts: From a peak year in

mass TV advertising, 1965, until 2002, the number of

60-second spots necessary to reach 80% of ones target

audience has increased from three to 1178. Translating this

to trust and recent research surrounding brand message

acceptance, 60% of respondents said they need to hearinformation about a company three to five times before

they believe it9. Correlating these two points, an advertiser

would need to provide at least 351 60-second TV spots

to provide sufficient TV exposure to satisfy 80% of ones

target audience need for message acceptance. This,

all while nearly 40 million U.S. households have DVR

capabilities and 59% of them currently use a DVR to skip

through the commercials.10

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Fast-forward to the current decade. Todays

teen has become a moving target. Nearly all

are double or triple tasking while watching TV.

U.S. teenagers trust information from each

other 5X more than adults and 10X more than

ads11. If you think about what this world looks

like 5 to 10 years from now, this scenario will

be even more complex as this demographic

will be your future target. It will pay to get on

top of this challenge sooner than later.

Complicating this, pushing more noise at consumers

who have become increasingly insensitive to the charms

of marketers has proven to risk exacerbating the issue and

drives negative long term brand impressions.

The solution: Next generation media mix

optimization

Next generation media mix optimization seeks to develop

a causal relationship between consumers, segments to

response, and to drill down into which media mix actually

drives consumer behavior for your high value audience.

It reduces the guesswork through better attribution;

quantifying media mix decisions through causal channelcontributions to sales. The solution is designed to

eliminate misleading performance measures and align the

marketing organization through common goals.

Source: July 25, 2008, Benchmark 2008: Forecast Growth of Devices And Access In The US report

Note: Actuals from 2005 and earlier are adjustments based on surveys of household heads.

250

200

150

100

50

0

US Adults (millions)

All US Adults

Mobile PhoneInternetCamera Phone

LaptopMP3 Player

Satellite RadioPortable NavigationDevice

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Actual Forecast

Digital Still Camera

Note: *top 15% most active and engages myYearbook Members

Source: myYearbook and Ketchum, Social Media Teen Inuencer Survey,

provided to eMarketer, May 25, 2010

88%

79%

50%

116033 www.eMarketer.com


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Start with your best customers

Of finer resolution than your target audience,

determine those customers who tend to buy more,

buy more frequently, return less, and refer you to

others more those top 30% of your customer

base who deliver 100% of your profitability.

Determine what this elite class looks like

demographics, purchase habits, media habits,

decision process and how you can acquire more

of them.

Top down and bottom up

The resulting analytics should include both ATL

and BTL data in a holistic model. Driven from a steeped

understanding of your best customer portrait, you can

then use syndicated segmentation methodologies and

look alike analysis to drive acquisition media decisions,

in particular those above the line. While the value of a

customer is not static, neither are their needs, desires,

demographics, attitudes or behaviors. Its not about

customer averages or the mean, but adding a level of

intelligence and insight.

Using historic media placement data, company sales

history and third-party demographics, your statistical

model should be agnostic to the legacy view of the

advertising line. This approach delivers several

incremental benefits;

the full picture of media consumption is viewed by

a single model. You see the overlapping effects of

alternate channels rather than the internal flurry of

discussion seeking to claim last click ownership.

BTL, digital channels yet concurrent monitoring

alleviates the need for constant tweaking of the

underlying analytics.

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Economic value proposition

Through elimination of media wasted on the wrong

audience or mix of channels, a successful media mix

optimization program should cover at least the cost of

incremental resources. Sure, this is a worst case scenario

but given the pressure on cost containment and hurdles

for justification, this is the safest decision for todays CMO.

Put tools in the hands of decision makers

Rather than a static report in a

dynamic market, you need to be able to adjust and form

recommendations based upon your planning cycles and

needs. Three degrees of resolution you should consider:

etc.)

Marketers are seldom happy

with inflexible rationale. Instead, consider the impact of

tools that allow you and your team to examine what-

if scenarios to understand how constraints impact the

media mix and campaign outcomes by accounting for

parameters such as budgets, partner obligations, regional

investments or revenue mandates.

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Incremental RevenueOpportunities

People, Process &Technology Media Spend

Economic

Value

Proposition

EVP =

People, Process and

Technology

Email Executiion, Direct Mail,

Banner Purchases, etc.

Touch pointstoretable universeConversion rateet value

onsolidationollectionVirtualizationdizationverance expense

best customer demographics

What data is availableon rate cards?

customerbase?

ersonicX value overlay

+ +


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Media mix optimization solutions

are only as helpful as the validity of their predictions.

Consider the need for a system of self checking

the accuracy of your optimization model and its

recommendations by testing and measuring initial results

against objectives. Incremental adjustments will increase

visibility, accuracy and ROI.

Its a journey

Start with bit-sized chunks, the building blocks; dont

try to boil the ocean. Begin as a self-funding practice

through a crawl, walk and then run with your differentiatedcustomer strategy, revving the engine of your new media

optimized machine. Like any journey, youll need a

destination and roadmap to guide your way as you deploy

the appropriate engagement strategies and tactics while

balancing customer demands and organization goals.

Throughout the journey, youll identify ways to reallocate

budget from less profitable media channels to other, more

profitable ones as you measure and refine your tactics.

The Acxiom advantage

Next generation media mix optimization is crucial

for marketing organizations to meet their business

objectives. Winning marketing teams will target their

investments toward high-value audiences with the

right media options. With more than 40 years of

global marketing experience across all industries,

Acxiom is the partner of choice for those who want to

impact their bottom line.

With offices in the United States, Europe, the

Middle East, Africa and Asia-Pacific, Acxiom is

well-equipped to meet the global needs of our clients.

Start improving your marketing ROI, let Acxiom be

your guide.

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W H I T E P A P E R


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1 Nielson, 2008

2 Alterian Your Brand: At Risk? Or Ready for Growth?, 2010

3 Bain & Company, Closing the Delivery Gap, 2005

4 Comscore, 2009

5 Rex Briggs and Greg Stuart, What Sticks: How most Advertising Fails and How to Guarantee Yours Succeeds, 2006, Kaplan Publishing

6 Acxiom, average customer analysis

7 Forrester Research, 2009

8 Tim Stengel, former CMO at P&G

9 Edelman Trust Barometer, 2009

10 eMarketer Mintel, Attitudes toward Traditional Media Advertising and Promotional marketing US, 2009

11 eMarketer Deloitte, State of the Media Democracy Fourth Edition: Select US Highlights, 2009

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See how Acxiom can work for you.

For more information, visit our website

at www.acxiom.com/consulting or call:

1.888.3ACXIOM

whitepaper next generation social and traditional media optimization

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