Kristian Dyhr Toft. Helsinki, 29th May 2018
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1 Kristian Dyhr Toft Helsinki, 29th May 2018
2 About us
3 Agenda Introduction Measuring marketing performance Overall results and insights Short case study
4 Introduction Changing media landscapes and consumer behaviour puts significant pressure on marketing departments in terms of deciding how to plan marketing activities. The complexity is enhanced by the overflow of digital marketing data, which in some cases provide a simple measure for its own effectiveness. Digital media and digitization of marketing has been a key focus area in the past years. However, a very fast digital transition is not necessarily the right way to go in order to obtain an optimal marketing performance. It is more a question of doing it at the right speed.
5 How to measure marketing performance
6 Measuring marketing performance It is important to take a holistic approach! Effects from media must be evaluated towards highlevel business goals Immediate response Short term (Sales modelling, ROI) 1 2 Sales effects Short og medium term Brand effects Long term The goal for marketing activities are either to drive sales in the short/medium term or to increase the brand strength (long term) Medium term (Sales modelling, ROI) Multichannel marketing Long term (Brand KPI er)
7 Econometric modelling in short Econometric modelling is the best possible way to identify, quantify and describe all business drivers All data exists, it is a matter of getting it all together and applying statistical methods The outcome is a data-driven and factbased approach to marketing and business optimization
8 Example: Decomposition of sales External drivers 73% Internal drivers 27% Illustrates the impact on sales from all significant factors Internal drivers deliver 27 % of total sales 1,8 1,6 1,4 1, Negative effects Positive effects The sales effect from all marketing drivers are quantified Turnover (M) 1,0 0,8 0, ,4 0,2 0,0 74% 8% -1% 0% -8% 3% 2% 22% 100 %
9 Media channel evaluation Understanding driver size and ROI Sales modelling makes it possible to quantify the effectiveness of all media channels Very important to understand ROI per channel But at least as important to understand driver size!
10 Media recommendations Based on the effectiveness of media channels, it is possible to make very operational recommendations for the future media strategy: Media channel allocations Investments per week in major channels Timing of media investments Scenario planning and optimization potential
11 ROI benchmark
12 Most comprehensive ROI database in the Nordics 1 Unique insights into media and marketing ROI levels over the last 10+ years Gambling Telecom Econometric Marketing Mix Modeling Projects Retailer Auto Advertisers Most important large and mid size brands in the Nordics 4 All main industries represented Finance FMCG
13 Digital now has the highest ROI! Significant relative increase in online media ROI over the past years 2,5 2 1,5 1 0,5 1,9 1,4 2,1 2,3 Offline Media: TV TV sponsorship Radio Print Regional print Magazines Outdoor Cinema Leaflets Online Media Display Online video/ WebTV Social Media SEM branded SEM generic Offline media ROI Online media ROI
14 Media Performance Matrix In order to fully understand the media effect it is important to differentiate between Effect (volume/profit) and Efficiency (Media ROI) Visually the importance of a specific media can be evaluated in a Media Performance Matrix Efficiency - ROI Low effect / High efficiency Low effect / Low efficiency High effect / High efficiency High effect / Low efficiency Effect / Profit
15 ROI across all categories ,0 SEM Generic; 2,7 Cinema; 2,4 Radio; 2,4 Print; 2,6 ROI 2,0 Social; 1,7 Web TV; 1,6 Display; 1,6 TV; 1,7 Magazines; 1,5 Outdoor; 1,0 - Salgseffect Bubble size shows the relative media investment in each channel
16 Media effect vs. media spending in Denmark Effect in ROI database Media spendings Online media Offline media Online media Offline media Results from the ROI benchmark database shows, that offline media generate much more sales than digital. In Denmark the current media spending is approximately 50/50 between online and offline. From our perspective, that shows in general that there is overspending in digital media.
17 Media ROI: Summary Media and marketing performance should primarily be measured against a highlevel business KPI, such as turnover or transactions Econometric modelling allows for a cross-media channel evaluation, which is key to get the full picture and use it to maximize the sales effect of all marketing activities High media ROI is not a goal in itself. It is more important to identify the largest drivers and combine it with smaller high ROI channels Digital media ROI has been increasing and is now higher than offline ROI. But it is key to understand that some of the traditional media like TV still has a very large sales effect ROI results are shown as averages across all industries and advertisers. The results will differ significantly from one advertiser to the other.
18 Thank you! Kristian Dyhr Toft Managing Director (+45) DATA INTELLIGENCE Kristen Bernikows Gade 1, 3. sal 1105 København K Business and marketing consulting «
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