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next-generationmarketing mix

optimizationusing audience and media managementto create certainty in an increasingly

uncertain world

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People have more media choices than ever to research the products and services they buy. CMOs arechallenged to rationalize their budgets and demonstrate increasing ROI while embracing new mediaand distinguishing the media consumption o their customers. Next-generation marketing mixoptimization is how winning marketing organizations will allocate their investments to target high-valueaudiences and media options, while delivering accurate attribution, cross-channel measurement andtools or high-perormance planning.

Like clockwork, each year marketing organizations

provide marketing plans and budget recommendationsthat outline sophisticated media investments,spanning a growing number o channels chasingan increasingly ragmented customer base and illusivereturn on investment.

The world is more complex. Your companys audience your existing and prospective customers havechanged and so must your marketing. Consumersare connected to a greater array o devices and mediaoutlets than ever beore. They Twitter and browsesocial networks on smart phones, check email in theirlocal coee shops, and choose rom more than 100 TV

channels every day1. They seek and use inormation:51 percent o U.S. and UK consumers always compareproducts and services beore a purchase; only 5 percentrely on advertising or promotional eatures or advice2.In this cacophony o change, 80 percent o CEOs believetheir brand delivers a superior customer experience

yet only 8 percent o their customers agree3. And, onlyone in ve targeted online ads actually reaches itsintended audience4. Are your media investments delivering against the

promise o return on marketing investment? Can you identify and target the appropriate audience

using the most ecient media tools? Can you properly attribute and track marketing

eorts across media investments? Are you better than your competitor at optimizing a

sophisticated media mix?

These are very dicult questions. Gaps in answerscreate immense issues: Waste 47 percent o U.S.ad spend reaches the wrong audience5. These gapsin delivery accuracy mean that when marketers cant

next-generation marketing

mix optimization

using audience and media management to create

certainty in an increasingly uncertain world

Acxiom Corporation | 601 E. Third, Little Rock, AR 72201 | www.acxiom.comF a w y, www../b_/y/p/py. 2011 Ac Ca. A eee.

align their target audience strategy closely to their

ad delivery, they make investment decisions basedon averages and educated hunches, causing them tooverspend on low-value customers and media channelswhile under spending on the high-value ones. Giventhe top 30 percent o a brands customers are typicallyve times more protable6, the inability to createcertainty in audience and media management costsadvertisers huge prots.

To address these challenges, many companies areturning to the next generation in marketing mixoptimization, delivering high-perormance audienceand media management. Designed to optimize the

marketing and advertising perormance o mixed mediainvestments, the solution takes the guesswork out oplanning helping marketers to better orchestrateand execute their marketing strategy.

challenges to eFFectivemarketing mix optimization

Todays chie marketing ocer is tasked to deliverincreasing results in the ace o decreasing orfat budgets, while also adopting and embracingtechnology changes that infuence consumers. Here aresome o the key challenges:

Existing solutions brEAk onsEvErAl lEvElsWhile nearly all top marketing executives have used orresearched solutions in this area, there are many whohave not experienced success or have seen that successwane in recent years.

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Legacy nomenclature The delineation betweentraditional mass advertising (ATL Above the Line) andpromotional or addressable-based advertising (BTL Below the Line) eorts is blurring. The continuedincrease in media addressability is delivering new

opportunities, like household-based televisioncommercials driven rom advertiser segmentationand data insight. While optimization eorts tend toocus on either ATL or BTL, in the end, one consumeris the same person whether they view a TV commercialor receive a display advertisement. And, they see yourbrand as one entity regardless o organizational andtechnological silos.

Differentiated customer value The key to realoptimization is to reduce wasted ad impressions ontwo dimensions: audience and media channel. One othe most dicult assumptions o existing marketing

mix optimization solutions is that the value o anincremental customeris a static average.

The reality is thatonly 30 percent ocustomers typicallyreturn a prot, yet costas much to acquire asthe 50 percent that areprot-neutral, or the20 percent that actuallycost you money toservice. To signicantly

increase your ROI,consider the impacto customer valueand target your bestcustomers rst.

Legacy sources for marketing mix optimization While advertising agencies and consultants have drivenmedia optimization solutions or many years, there areissues to consider: Advertising agencies can present an improper

alignment o business objectives and tend to ocuson the channels o their expertise. This is naturalas their talent also pools around those areas oexpertise. And, while primarily done through testprograms, the connection to actual consumerbehavior and correlation to revenue lit is usuallysot, at best.

Econometric models have long been used butinvariably rely on superhuman leaps in assumptionsand ootnotes in their reports to achieve theirmathematical summations. Also, they tend to ocus oneither ATL or BTL programs, limiting their eectivenessto drive perormance and attribution, whileragmenting the view o current and uture customers.

Today, digital media accounts or nearly 35 percent othe average U.S. consumers media consumption yetless than 15 percent o ad spend is directed toward thesenew channels7. Successul marketing mix optimizationsolutions need to drive consolidated answers or BOTH

above the line and below the line investments. Yourtarget audience doesnt know that line exists andtranscends channels with the greatest o ease. Thestruggle or marketing leaders seeking to optimizeagainst this new reality is to nd models adaptive to therate o change that drive shits in media investment andmore closely mirror the shits in media consumption otheir target audience.

rEAChing ConsumErs hAsbEComE morE diffiCult

The challenge has increased exponentially. There aremore channels, more screens and more data than ever,and the rate o change is increasing. Adoption drivenby accessibility and aordability, technology enablesconsumers to access a vast wealth o inormation,

on their terms. Starting in the last ew decades, thetrajectory o change has ramped up ast and is notprojected to slow down.

Selecting one o the top spend channels, TV, we cansee dramatic intra-channel shits: From a peak yearin mass TV advertising, 1965, until 2002, the numbero 60-second spots necessary to reach 80 percent oones target audience has increased rom three to 1178.

Translating this to trust and recent research surroundingbrand message acceptance, 60 percent o respondentssaid they need to hear inormation about a company

Loss

20%

Neutral

50%

Profitable

30%

Source: July 25, 2008, Benchmark 2008: Forecast Growth of Devices And Access In The U.S. reNote: Actuals from 2005 and earlier are adjustments based on surveys of household heads.

250

200

150

100

50

0

U.S. Adults (millions)

All U.S. Adults

Mobile PhoneInternetCamera Phone

Laptop

MP3 Player

Satellite Radio

PortableNav

igationDev

ice

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

DigitalS

tillCam

era

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EConomiC vAluE propositionThrough elimination o media wasted on the wrongaudience or mix o channels, a successul marketingmix optimization program should cover at least thecost o incremental resources. Sure, this is a worst case

scenario, but given the pressure on cost containmentand hurdles or justication, this is the saest decisionor todays CMO.

put tools in thE hAnds ofdECision mAkErsPlanning tools Rather than a static report in adynamic market, you need to be able to adjust andorm recommendations based on your planningcycles and needs. Three degrees o resolution youshould consider: Media type (e.g., TV, radio, print or online) Marketing channel (e.g., email, direct mail

postcards, etc.) Region (metro, state, country, etc.)

What-if scenarios Marketers are seldom happywith infexible rationale. Instead, consider the impact otools that allow you and your team to examine what-i scenarios to understand how constraints impactthe media mix and campaign outcomes by accountingor parameters such as budgets, partner obligations,regional investments or revenue mandates.

Validation reporting Marketing mix optimizationsolutions are only as helpul as the validity o their

predictions. Consider the need or a system o selchecking the accuracy o your optimization model andits recommendations by testing and measuring initialresults against objectives. Incremental adjustments willincrease visibility, accuracy and ROI.

its A journEyStart with bite-sized chunks, the building blocks;dont try to boil the ocean. Begin as a sel-undingpractice through a crawl, walk and then run with yourdierentiated customer strategy, revving the engine o

your new media optimized machine. Like any journey,youll need a destination and roadmap to guide

your way as you deploy the appropriate engagementstrategies and tactics while balancing customerdemands and organization goals. Throughout thejourney, youll identiy ways to reallocate budgetrom less protable media channels to other, moreprotable ones as you measure and rene your tactics.

the acxiom advantage

Next-generation marketing mix optimization is crucialor marketing organizations to meet their businessobjectives. Winning marketing teams will target theirinvestments toward high-value audiences with the

right media options. With more than 40 years o globalmarketing experience across all industries, Acxiom isthe partner o choice or those who want to impacttheir bottom line.

With oces in the United States, Europe, the MiddleEast, Arica and Asia-Pacic, Acxiom is well-equippedto meet the global needs o our clients. Start improving

your marketing ROI, and let Acxiom be your guide.

To learn how Acxioms marketing mix optimizationsolutions can increase marketing ROI and reducebudget waste, call 1.888.3ACXIOM (1.888.322.9466)or visit www.acxiom.com/consulting.

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(1) ne, 2008 (2) Aea y ba: A r? o rea g?, 2010 (3) ba & Ca, C e dee ga, 2005 (4) Cce, 2009(5) re b a ge sa, wa sc: h Ae fa a h gaaee y sccee, 2006, kaa p (6) Ac, aeae ceaa (7) fee reeac, 2009 (8) t see, e Cmo a p&g (9) Eea t baee, 2009 (10) emaee me, Ae a taamea Ae a pa ae us, 2009 (11) emaee dee, sae e mea decac f E: seec us h, 2009

2011 Ac Ca. A eee. Ac a eee aea Ac Ca. A e aea a ece a ee ee aee e eece e.

AC-1394-

acxiom corporation

601 E. Third, Little Rock, AR 72201www.acxiom.com

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