Building a data driven marketing organisation

Transcription

1 Building a data driven marketing organisation Predictive Philips powered by GfK POS Analytics Chris de Groot, Philips & Bjoern Kroog, GfK POS Analytics 1

2 Implanting data driven marketing. Philips learnings Missing link is organization Implanentation beyond simulators and charts Everything is digital Digital challenge is saturation Organizational development needs are overlooked Moving beyond simulation: Gamification of results Digital ads carry sales, higher leverage in e-commerce Increase in spend across the board not recommended 2

3 By the time you are done reading this paragraph somewhere on this planet about 300 small domestic appliances have been sold But it has been getting more and more difficult to sell them! 3

4 What is the challenge? Digitization of media Rise of e-commerce Shorter product life cycle Factual prove of ROI Consumers are increasingly difficult to reach Expectation of lower prices and different customer experience Time to commercialize with a margin very limited Achieving the same with less Achieving more with the same 4

5 The Royal Philips journey to become a data driven company Data Driven Fact Based ROI focus Efficient spending Scaling Institutionalize Learning Royal Philips is becoming a data driven company Philips Marketing needs fact based decisions to ensure efficient budget spending Standardized data driven marketing campaigns enable global comparison and peer learning possible 5

6 Change of behavior and data collection are main challenges Behavior Change Data Collection & Analytics Need to add facts to decision making Unlinked data sources across countries Analytics helps to drive direction but doesn t replace decision making Conflict is good: Deep dive when the results show that a plan isn t working Dependent on external vendors Need for a scalable solution suitable for all countries 6

7 So what s missing? 7

8 How are you going to implement the findings? The most overlooked aspect is the link to successfully implementing findings in an organisation Data Analytics Organisation Implementation 8

9 Philips solution 9

10 Adopting a four dimensional approach including organisational development: Moving to an MROI (Marketing ROI) centric approach MROI relevant Data Cube Integrated data cube prepared by GfK based on Philips and GfK data sets Philips MROI Academy Pragmatic and scalable Analytics MROI Centric Organization Philips led supported by consultative partners (GfK, McKinsey) MROI driven decision making GfK POS Analytics 10

11 Developing an standardised data cube across the Philips portfolio and across countries Up to 40 different drivers across channels and countries in 38 different models GfK Point of Sale data POS ATL Above the line marketing Sales Digital vs. Traditional Data Cube Below the line marketing BTL Others Non controllable factors Instore Promotions 11

12 The analytical toolkit comprises of four elements covering every angle of decision making Data driven marketing using MROI consisting of 4 components MROI Data Cube MROI Analytics External Data ATL information BTL information GfK POS data RCQ DROI MMM CROI RCQ: Determine efficient reach of quality audience MMM: Connect marketing spend to sales DROI: Optimize digital campaigns (semi) real time CROI: Connect campaign investment to financial performance 12

13 Marketing Mix Modelling (MMM) Cornerstone of decision support Store Promotions Traditional Total Philips Category Sale Range Price Store size Price discount Leaflets In-store demos Media = Other factors Trend/Seasonality VAT Competitive Range Price competition Digital Media Specific holidays VAT change Tourist arrival Promotions Media 13

14 MROI econometric modelling is based on historic sales and driver data Delivers the average and marginal ROI by instrument and optimal spend levels How it works Typical outcome: Performance contribution of each stimulus What we need Advertising Sales Base price change Promotional discount Promotional visibility Direct mail campaign Sales drivers including HALO Other marketing activities TV Online display Facebook advertising ROI by Instrument Response curves Other internal and external influences Base (includes seasonality, macroeconomics, and weather) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Spend optimization 14

15 Positioning the analytical toolkit Data driven marketing using MROI consisting of 4 components MROI Data Cube MROI Analytics MROI Organisation Internal historical Campaign data External market data GFK POS Tracking RCQ DROI MMM CROI 15

16 MROI Organisation at central level in the launch phase Deploy the capability and move to an new phase Continuous improvement Central Philips MROI team Business Groups Central MROI Coach Local MROI Coach MROI Data Specialist Jointly with the relevant Business Groups we design and support our markets in: Collecting data Design processes Securing data quality Resources Local Markets 16

17 The Royal Philips Approach Central data quality assessment Advisor to Philips Leadership (MROI Steerco with Chief Marketing Officer) when decisions have to be taken concerning A&P budget Support Markets and BGs with deep-dive analysis, Subject Matter Expert (SME) Key Role: MROI Coach Giving training in cooperation with the Philips Marketing Academy when face-2-face training needed Refresh existing models in cooperation with GfK and Markets/BGs Support across markets and BG's collecting data for RCQ, MMM with filling CROI template 17

18 How to reinforce knowledge Peer learning by serious Gaming: Marketing in a Digital Age 18

19 What have we learned? Lesson 1 Lesson 2 Lesson 3 Lesson 4 Digital carries sales. But. You need a sales channel driven media plan Digital doesn t guarantee success How many glasses of water to drink? 19

20 Lesson 1: Digital carries sales. But. Digital drives sales but you still need a substantial investment in non digital marketing mechanics Promotion and trad. media still accounting for 18% of sales Revenue contribution % Average across all studies 18% Other media and promotion 8% 74% Online media accounts for 8% 20

21 Lesson 2: You need a sales channel driven media plan Digital ad impact and online sales channels Main sales impact of online ads in online sales channels in Philips categories Moderate impact of online The direct impact of online media on offline sales is significant but on a much lower level Offline sales Online Sales High impact of online Digital ads particularly drives sales in online sales channels 21

22 Lesson 3: Digital doesn t guarantee success Looking into the classic comparison of sales lift and ROI Digital media ahead but a lot of room for improvement 27.5% of the cases 31.4% of the cases Mainly online mechanics High ROI Low lift Mainly online mechanics High ROI High Lift Digital Low ROI Low Lift Low ROI High Lift Non digital Mainly Offline mechanics 23.6% of the cases 17.6% of the cases Count of model results 22

23 Lesson 4: How many glasses of water to drink? Saturation problem in both media mechanic groups 37.2% of the cases 21.6% of the cases Mainly online mechanics High ROI saturated Only online mechanics High ROI Non saturated Digital Low ROI saturated Low ROI Non saturated Non digital 29.4 % of the cases 11.7% of the cases Count of model results 23

24 Lesson 4: How many glasses of water to drink? Lessons learned Studying the impact of marketing on sales in five countries across Online ads carry sales Channel specific planning Mind the saturation Online carries sales with higher ROI compared to Traditional media Online ads drives online sales Lower marginal ROI shows loss of efficiency already 24

25 Lesson 4: How many glasses of water to drink? How will the Philips MROI Organisation evolve? Organisational development Set and design of the central organization Wave 1 modelling Central MROI team to concentrate on consulting, Training delivered centrally by MROI Academy Wave 3 to be deployed by local MROI consultants Deployment of results in the local organizations through central MROI organization Training of local MROI consultants Wave 2 modelling 25

26 Together we will move on! Thank you! 26

27 Your contacts Chris de Groot Senior Learning Lead Marketing Excellence Academy, Philips The Netherlands Bjoern Kroog Global Director POS Analytics, GfK Singapore 27

28 Thank you for your attention! Chris de Groot, Philips & Bjoern Kroog, GfK 28