Using Data to Make Your Promotion Dollars Work Harder and Smarter for Your Brand

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3 Using Data to Make Your Promotion Dollars Work Harder and Smarter for Your Brand Dan Kersten Consumer Promotion Marketing Bill Beyea Sr. Manager Promotion Analytics

4 Let s play a little game.. 4

5 Agenda Introduction: What will we be talking about today? A Little History: Kimberly-Clark and Inmar Coding Strategies: Digging deeper in to event performance Split Testing: Measuring the impact of creative choices Coding, Testing, and Benchmarking: Evaluating Hispanic targeting strategies Conclusions & Questions 5

6 What will we talk about today? CPG brands are quickly moving towards new and innovative promotion strategies and tactics: Digital, mobile, social, one-to-one targeting, etc Traditional promotion vehicles still make up the bulk of the CPG promotional spending 89% of all coupons distributed in 2015 were through the FSI 38% of all coupons redeemed in 2015 were from the FSI It is imperative that brands continually explore and optimize their use of traditional vehicles, especially the FSI The FSI of today is not the same as it was just a few years ago Mass vehicles shouldn t be executed as mass vehicles CPGs can find and create brand-specific data within their own programs to improve effectiveness, or generate massive savings 6

7 History of Kimberly-Clark and Inmar 57% of adults 55+ still read the newspaper But only 29% of ages get their news/content from the traditional print newspaper FSI circulations were too high, but we didn t know where and how to safely reduce them How do we shift funds from the FSI to other programs? 7

8 An old analysis leads to a new partnership 50mm Circulation 45mm Circulation 8

9 What is Optimization? OPTIMIZATION An act, process, or methodology of making something (as a design, system, or decision) as fully perfect, functional, or effective as possible. OPTIMIZING AN FSI Selecting the right markets, publications, values, creative, and timing to be most effective at meeting a desired goal. Increase redemption rate / drive trial Move more volume / units Improve coverage of key retailers Drive efficiency Save money 9

10 How do you optimize a promotion? YOU USE DATA Brand and Category Development (BDI) Competitor BDI Volume and Share Demographics ACV Distribution Retailer Footprint But often ignored and suppressed is the ability to yield HIGHLY actionable data from the promotions you are already running! 10

11 CODING STRATEGIES: Digging deeper in to event performance

12 The Request: Market list optimization Evaluate individual market lists for 10 Kimberly-Clark brands Optimize each market list, with the following goals in mind: Find savings/eliminate waste Minimize impact on volume Make programs more effective Help us tear down our national view of FSI s and move us to a targeted and optimized mindset 12

13 The Solution #1: Market coding Implemented a market coding strategy to identify: Individual redemption performance of each market Outliers with high or low redemption performance Compared results against prior Inmar learnings: Validate assumptions Explore surprises Used data from market coding to optimize: Minimize, eliminate, or increase circulation Adjust values by market, maximize efficiency and/or effectiveness 13

14 Market Coding Results: Mass vehicle doesn t always guarantee mass performance 0.73% 0.99% 2.14% 0.30% 1.15% 1.87% 1.82% 2.03% 2.83% 1.89% 2.34% 2.64% 2.24% 1.95% 2.50% 2.14% 3.18% 2.04% 4.44% 3.39% 2.52% 4.47% 2.25% 2.75% 1.61% 2.67% 3.07% 1.00% 2.23% 1.76% 0.98%

15 The Solution #2: Newspaper coding Identified newspapers that would likely yield ineffective or inefficient results: All newspapers are not created equal All papers are not actually newspapers Structured coded tests to determine performance: Benchmark the response rate from suspected newspapers against more traditional, tried-and true papers Used data to optimize newspaper selection: Avoid certain newspaper groups entirely Use strategic form breaks to reduce or reallocate 15

16 Everyone knows that circulation is declining Circulation declines for a sampling of top U.S. newspapers ranged from -37% to -61% over past 10 years Which leads us to a question 1,600 1,400 1,200 1, Source: News America 2006 and 2016 publication lists. 16

17 Publication Coding Results: Shocking! Similar choices in the same market can yield very different results! Single Market Newspaper Groups Redemption Rate 6,000 Units Moved vs. Cost Per Unit Moved $4.00 Newspaper Group A Newspaper Group B 0.56% 0.05% Units Moved 5,000 4,000 3,000 2,000 $1.80 $3.58 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 Cost Per Unit Moved 1,000 $ Paper Group A Paper Group B $

18 So what? How did this impact Kimberly-Clark? The market list circulation for all K-C brands has been reduced by million improving efficiency and effectiveness while opening up funds for other programs On average, about 12 million circulation of non-paid publications is being strategically cut using targeting and form breaks - from every individual brand list! Brands are more effectively targeting offers and circulation by market in order to align with overall promotion strategies In the first year alone we saved and/or reallocated over $3,000,000 in consumer promotion dollars 18

19 SPLIT TESTING: Measuring the impact of creative choices

20 The Request: Creative optimization We want to test the effectiveness of creative options Specifically want to understand if changing a single, nonmonetary element will have any impact on performance Test across multiple brands, events and offers to determine if applicable across K-C brands, and if repeatable 20

21 The Solution: An Series Of Tests Developed a split test strategy across ten FSI offers: Multiple markets targeted for each offer Circulation in target markets split between two creatives, and coded individually Results evaluated and analyzed: Were there any differences in performance between creatives? Did the results vary by brand or category? Was there an overall pattern? 21

22 What is an FSI A/B split test? A B A B A B A B 22

23 What variables can you test? Just about anything! 23

24 A/B Split Test results: The right creative can make a difference 80% of the offers tested saw a higher response with the test creative Those offers saw a 15% increase in response (average) Only 2 offers saw a decline, averaging -17%. Both were within a single category 1.80% 1.60% Traditional Creative Test Creative 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% Brand 1 Brand 2 Brand 3 Brand 4 Brand 5 Brand 6 Brand 7 Brand 8 Average 24

25 So what? How does this impact Kimberly-Clark? To drive response and volume, brands often resort to obvious tactics, such as increasing face values or page size While these may achieve the desired result, they always come at a cost making each redemption more expensive or adding to the total media spend With no effort or additional creative/media costs, Kimberly Clark brands can instantly implement this change within all current and future programs Only increase in cost will be the result of increased redemption If this result is sustainable, it suggests a potential increase of nearly 4,000,000 units on an annual basis (vs 2015 results for the brands that saw a positive test result) Cost of the incremental redemption will be significantly lower than if the same result is achieved by increasing face values 25

26 CODING, TESTING AND BENCHMARKING: Evaluating Hispanic targeting strategies

27 The Request: Hispanic targeting optimization Evaluate our strategy for targeting the Hispanic population with FSI promotions Understand the redemption performance of Hispanic publications Determine if the impact/response rate of running Spanish or bilingual creative executions justifies additional cost 27

28 The Solutions: Benchmark, code, and test Benchmarked standard, weekly Hispanic FSI circulation against more specialized programs How does redemption performance compare? Coded Hispanic & English papers individually by market Is redemption really lower with Hispanic publications? Does it vary by market/region? Evaluated creative options through Split Tests Do we get better results with a Spanish or bilingual creative? Are the results worth the extra spend? 28

29 Benchmarking Result: Weekly FSI can deliver results, while reducing media spend. K-C Hispanic-targeted offers were traditionally distributed through a stand-alone, specialized Hispanic program Benchmark/comparisons between the this program and standard Sunday FSI s indicated that redemption performance was very similar Vehicle Redemption CPUM Special Program Weekly FSI 0.10% $ % $4.41 Opportunity to reduce CPUM by 60%, while generating similar volume 29

30 Coding result: All markets are not created equal and unexpected activity emerged On average, redemption from Hispanic publications was 30%-70% lower than English publications across various brands But not all markets behaved the same In some cases, Hispanic redemption exceeded English. But don t jump to conclusions! 1.80% 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% English Hispanic 30

31 Testing result: Spanish creative wasn t the golden ticket Some K-C brands were switching to a bilingual or Spanish creative in Hispanic publications, incurring media fees to do so. 3.00% 2.50% English Spanish Test results indicate that redemption is LOWER in Hispanic publications when using Spanish messaging 2.00% 1.50% 1.00% Sticking with English creative will drive redemption - although we don t know who is redeeming 0.50% 0.00% Test 1 Test 2 Test 3 Test 4 31

32 Testing result: Bilingual wasn t any better Additional testing indicates that redemption is LOWER when using bilingual messaging vs. Spanish % Spanish Bi-Lingual 12.00% Switching back to English creative across all papers in a market allows for elimination of pricey versioning fees % 8.00% 6.00% But what else do you see? Sometimes we uncover things that we weren t even looking for % 2.00% 0.00% Test 1 Test 2 Test 3 32

33 So what? How did this impact Kimberly-Clark? Brands now use weekly FSI to run Hispanic offers Allows for timing flexibility can run any time of the year Brands are saving +/- $20,000 in media fees per Hispanic FSI execution Individual market results allows for optimization Brands understand where and how Hispanic publications are performing Visibility to suspicious redemption allows for better control of budgets By eliminating the need for varying languages, K-C is no longer paying costly versioning fees For just one brand, this equals an annual savings of $140,000 - $200,000 If all K-C brands incorporate Hispanic targeting, the savings could approach as much as $1,000,000 annually 33

34 CONCLUSIONS: What should you take away?

35 Conclusion: What should you take away? You SHOULD NOT take away the specific results seen today! They may not apply to your brands You SHOULD take away the drive to dig deeper within your promotions There are always opportunities to improve the performance of your FSIs, or save dollars to use more effectively elsewhere Small tests can create data that will transform your programs Create the puzzle pieces! Code, code, code! The most important thing to take away.. 35

36 Conclusion: What should you take away? Be curious Figure out the questions, and then find the answers Act on the results!!!!! 36

37 QUESTIONS?

38 HOW DID WE DO? CLICK THE SURVEY BUTTON FOUND ON THE SESSION PAGE

39 THANK YOU Bill Beyea Dan Kersten