Marketing accountability in the networked customer era CCIMS McCombs / Fall Roundtable

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1 Marketing accountability in the networked customer era CCIMS McCombs / Fall Roundtable October 5, 2012 Greg Banks director, marketing practice

2 Marketing accountability in the networked customer era CCIMS McCombs / Fall Roundtable October 5, 2012 Greg Banks director, marketing practice

3 Three prior marketing eras Many to many Customer Digital Info Power Targeted Mass One to many Company Sources: From Mad Man to Superwoman, The Inevitable Rise of the Chief Marketing Officer in the Age of the Empowered Customer - Suketu Gandhi, Giovanni Rodriguez, and Greg Banks, Deloitte Consulting Strategy Newsletter, Deloitte TMT Dbrief series - From Mad Men to Superhero

4 Three prior marketing eras accountability & analytics Marketing accountable Popular analytical methods Digital (1995+) everaging new data avails Maximizing ad impacts New media Self-organizing maps Dynamic ad purchasing Purchase pathways Targeted (1980+) ID best customers Customize marketing Validate sales funnel Predictive modeling Segmentation MROI Mass (1960+) Communication effectiveness Advertising breakthrough Brand preference Focus groups Recall testing Attitude surveys Sources: The Brand Report Card by Kevin Keller, Taking The Pulse On Your Brand by Michaela Mora, The Marketer s Guide to Descriptive vs. Predictive Modeling, Knowledge creation in marketing: the role of predictive analytics, Your Visual Blueprint for Effective Internet Marketing, Effective e-marketing through Search Engine Optimization, Search Engine Marketing: Why it Benefits us All

5 And now we re in a fast-changing fourth era Many to many Customer C-suite Network Digital Info Power Targeted Marketing function Mass One to many Company Communications

Sept 2012 media interview Sources: From Mad Man to Superwoman, The Inevitable Rise of the Chief Marketing Officer in

6 The inevitable rise of the CMO July 2012 article The buyer has been taking power from the seller. And the CMO is often the executive best prepared to navigate the change. Sept 2012 media interview Sources: From Mad Man to Superwoman, The Inevitable Rise of the Chief Marketing Officer in the Age of the Empowered Customer - Suketu Gandhi, Giovanni Rodriguez, and Greg Banks, Deloitte Consulting Strategy Newsletter, Deloitte TMT Dbrief series - From Mad Men to Superhero

7 Marketing accountability in today s network era CMO with CFO CIO eading organizations have aligned marketing & finance. Marketing Review The CMO will have a larger IT budget than the CIO. Gartner A CMO should be the interface for product development. Forbes CEO The mission is not just marketing, its strategy & growth. Ad Age Source: Marc E. Babej and Tim Pollak, Who Needs A CMO Anyway?, Forbes, May 10, 2006; aura Mcellan, By 2017 the CMO will Spend More on IT Than the CIO, Gartner, January 2012; Russ ange, ow Do You Become a 'Super CMO?, AdAge, February 16, 2012; Roger ines, 5 Steps to Align the Offices of the CMO and CFO, Marketing Execs Review, July 13, 2012

8 Marketing accountability in today s network era CMO + CXO accountable Newer analytical methods with CFO Profit Dynamic yield optimization Network asset management (how CRM is evolving) CMO CIO Customers Digital 1:1 platforms (how companies are owning media) MROI - network style CEO Growth Market entry analyses Demand-chain systems (like supply-chain, but less controllable) Sources: Social Media Marketing: Game Theory and the Emergence of Collaboration, Marketing Calculator: Measuring and Managing Return on Marketing Investment, Power of ike, Power of ike 2, Success And Failures In Marketing Mix Modeling: Maximizing The Potential Of Today s Predictive Analytics, The Forrester Wave Marketing Mix Modeling, Q3 2011, Agent-based modeling in marketing: Guidelines for rigor, Social Analytics: Product Review

9 Marketing accountability in today s network era CMO + CXO accountable Newer analytical methods with CFO Profit Dynamic yield optimization Network asset management (how CRM is evolving) CMO CIO Customers Digital 1:1 platforms (how companies are owning media) CEO Growth et s look closer (movie industry example) MROI - network style Market entry analyses Demand-chain systems (like supply-chain, but less controllable) Sources: Social Media Marketing: Game Theory and the Emergence of Collaboration, Marketing Calculator: Measuring and Managing Return on Marketing Investment, Power of ike, Power of ike 2, Success And Failures In Marketing Mix Modeling: Maximizing The Potential Of Today s Predictive Analytics, The Forrester Wave Marketing Mix Modeling, Q3 2011, Agent-based modeling in marketing: Guidelines for rigor, Social Analytics: Product Review

MROI in the network era Original: 20+ years TV Print Radio Sales independent dependent Sales Newer: last few years Sales Paid interdependent Paid Owned Owned Earned Earned Marketing Calculator:

10 MROI in the network era Original: 20+ years TV Print Radio Sales independent dependent Sales Newer: last few years Sales Paid interdependent Paid Owned Owned Earned Earned Marketing Calculator: Measuring and Managing Return on Marketing Investment by Guy R. Powell, ROI of Social Media: ow to Improve the Return on Your Social Marketing Investment by Guy Powell, Steven Groves and Jerry Dimos, Effects Of Word-of-mouth Versus Traditional Marketing: Findings From An Internet Social Networking Site by Michael Trusov, Randolph E. Bucklin, Koen Pauwels

11 Network style MROI for a movie roll-out Impact (, M, ) Paid Paid Earned Earned Owned Box office sales M Owned M DVD sales, rental Day 90 Day 120 Day 180

12 Network style MROI for a movie roll-out Impact (, M, ) Paid Paid Earned Earned Owned Box office sales M Owned M DVD sales, rental Day 90 Day 120 Day 180

13 Marketing accountability in today s network era CMO + CXO accountable Newer analytical methods with CFO Profit Dynamic yield optimization Network asset management (how CV is evolving) CMO CIO Customers Digital 1:1 platforms (how companies are owning media) MROI - network style CEO Growth et s look closer (auto industry example) Market entry analyses Demand-chain systems (like supply-chain, but less controllable) Sources: Social Media Marketing: Game Theory and the Emergence of Collaboration, Marketing Calculator: Measuring and Managing Return on Marketing Investment, Power of ike, Power of ike 2, Success And Failures In Marketing Mix Modeling: Maximizing The Potential Of Today s Predictive Analytics, The Forrester Wave Marketing Mix Modeling, Q3 2011, Agent-based modeling in marketing: Guidelines for rigor, Social Analytics: Product Review

14 Who are our auto company s customers & prospects? Short-term < 30 days Medium term days ong term 180 days+ Conquest Re-purchase Conquest Re-purchase Conquest Re-purchase Analytic methods Segmentation Digital 1:1 platforms ow much are these customers worth to our company? Next car Future cars Friends cars Analytic methods Social monitoring Network asset management

15 Where to invest to generate demand for our auto s? Brand Models Categories Economy Classic Durability uxury Sedan Truck SUV ybrid Van Sedan Truck SUV ybrid Van Sedan Truck SUV ybrid Van Sedan Truck SUV ybrid Van Paid Earned Owned Paid Dealers Earned Multi-brand Owned Paid 3 rd parties Dealers Earned Multi-brand Owned 3 rd Paid parties Dealers Earned Multi-brand Owned 3 rd parties Paid Dealers Earned Multi-brand Owned 3 rd parties Dealers Multi-brand 3 rd parties Etc. Analytics Predictive modeling MROI Channel mix

16 Note: look at this page in normal not slide mode. Greg Analytics

17 Summary: networked era Network Digital Mass Targeted

management Digital Mass Targeted Customers Digital 1:1 platforms MROI -

18 Summary: networked era & new C-suite analytics Network CMO + CXO accountable Growth Newer analytical methods Dynamic yield optimization Network asset management Digital Mass Targeted Customers Digital 1:1 platforms MROI - network style Market entry analyses Profit Demand-chain systems

Executive Summary: Quantifying the Role of Social Voice in Marketing Effectiveness. 10/25/2012 MarketShare & KellerFay Group

Executive Summary: Quantifying the Role of Social Voice in Marketing Effectiveness 10/25/2012 MarketShare & KellerFay Group. Introduction As Social Voice (online and offline word of mouth) becomes increasingly