Digital ROI: the definitive guide to key metrics

Digital ROI: the definitive guide to key metrics Simon Gray Channel development consultant Lateral Group Elizabeth Smyth Marketing director Marketo EMEA Thomas Brown Head of insights The Chartered Institute of Marketing

Source: Unlock the value of creative CIM and Canon Europe, 2011

Only Only Only Only Only ROI? ABP (Always been problematic) 48% 7% 24% of organisations consistently report marketing measures internally to the board of companies always set KPI s clearly for each initiative believe that metrics are put in context, correlated to other metrics within the business or externally 7% of organisations always set clear accountabilities for objectives 49% of organisations believe they have timely reporting Source: Marketing Measurement and Accountability, CIM and Deloitte, 2010

Only Over Under ROI? ABP (Always been problematic) 40% 48% 36% of companies believe they are fairly or very effective at measuring return on investment of organisations feel their reporting isn t sufficiently accurate of companies say they have data that is presented in an effective way to enable insight to be identified 49% of companies don t believe that Executives drive change as a result of marketing or customer performance measures Source: Marketing Measurement and Accountability, CIM and Deloitte, 2010

ROI? ABP (Always been problematic) Source: Marketing Measurement and Accountability, CIM and Deloitte, 2010

Then digital came along

Uh-oh. TJGC (Things just got complicated) In the outside world Fragmentation of media Proliferation of channels Fad vs. fundamental? From broadcast to co-creation From DR to dialogue

Uh-oh. TJGC (Things just got complicated) In the outside world Fragmentation of media Proliferation of channels Fad vs. fundamental? From broadcast to co-creation From DR to dialogue And on the inside Agencies Skills and talent Sceptics and knee-jerkers Technology and systems Joining up campaigns across multiple channels Understanding the levers!

But the best thing about digital is that everything s measurable right?

So we start pouring money into things like social media Source: CIM Social Media Benchmark Wave one Autumn 2011 In association with Ipsos ASI and Bloomberg

Without clarity as to why Source: CIM Social Media Benchmark Wave one Autumn 2011 In association with Ipsos ASI and Bloomberg

Well-established metrics aren t well used Source: CIM Social Media Benchmark Wave one Autumn 2011 In association with Ipsos ASI and Bloomberg

Wrong. INTS. (It s not that simple) Measurement doesn t equal ROI. Tools and technology So much data! Skills and scary people in finance Pace and resourcing What s actually having the impact which lever?

Social Media Benchmark: find out more www.smbenchmark.com

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Proving and Improving Marketing s Impact on Revenue Liz Smyth Marketing Director Marketo EMEA Ltd

Topics Building Marketing Credibility Planning for Marketing ROI The Right Metrics Revenue Metrics Marketing Program Performance Forecasting Page 20 2011 Marketo, Inc. Marketo Proprietary and Confidential

What Profits Can Be Generated With 10% More Budget? 44% 9% 12% 15% 20% Improve profits by more than 20% Improve profits by 10% to 20% Improve profits up to 10% No major change in profits generated Don't Know #1 Answer: Don t Know Source: 2010 Lenskold Group / emedia Lead Generation Marketing ROI Study Page 21 2011 Marketo, Inc. Marketo Proprietary and Confidential

Planning for Marketing Measurement Establish Goals and ROI Estimates Up-Front Design Programs to Be Measurable Focus on the Decisions that Improve ROI Source: Lenskold Group Page 22 2011 Marketo, Inc. Marketo Proprietary and Confidential

Where Metrics Go Wrong Vanity Metrics Sound good and impress people, but don t measure impact on revenue or profitability Page 23 2011 Marketo, Inc. Marketo Proprietary and Confidential

Where Metrics Go Wrong Activity Metrics Measure what you do instead of what results and impact you have Page 24 2011 Marketo, Inc. Marketo Proprietary and Confidential

Where Metrics Go Wrong Cost Metrics Frame marketing in terms of cost and spending instead of results and outcomes Page 25 2011 Marketo, Inc. Marketo Proprietary and Confidential

The Right Metrics Revenue Metrics Marketing Program Performance Aggregate impact on company revenue Incremental contribution and ROI of individual marketing programs Other Metrics Areas (less tied to Revenue/Finance) Customer Profitability, Net Promoter, Web Analytics, Public Relations Effectiveness, Product Performance, Brand Preference and Health, Sales Tool Usage Page 26 2011 Marketo, Inc. Marketo Proprietary and Confidential

AWARENESS All Names Engaged Prospect & Recycled Lead Sales Lead Model the Full Revenue Cycle MQL SAL SQL Opportunity Customer Page 27 2011 Marketo, Inc. Marketo Proprietary and Confidential

Key topic areas: Balance Flow Conversion Velocity Trends over time Page 28 Filter/Drill into data, e.g. by Program Type, Business Unit, Geography, etc. Screenshot: Marketo Revenue Cycle Analytics 2011 Marketo, Inc. Marketo Proprietary and Confidential SLA violations

Page 29 Marketo Revenue Cycle Metrics Lead Type Variants Source Channel Division Size 9,500 / mo Paid Names ($29.33) Unpaid Names ($0) 80% of all deals follow this model 40% Prospects 3,800 / mo ¾ paid ($73) ¼ unpaid ($0) ($55 average) New Customers ($5,800) 20% Opportunities 130 / mo ($2,000) Leads 2,000 / mo ($137.50) 80% 2011 Marketo, Inc. Marketo Proprietary and Confidential Lead to Sales Lead: 7% Sales Lead to Opp: 80% 1.4 people per Opp 1,000 Leads = 40 Opps 4.0% / month 75% Active Prospect Database 10% Inactive (Last 6 Months)

Why Measuring Programs is Hard Multiple touches. Seven touches needed to convert a cold lead into a sale Multiple influencers. Typical buying committee has 5-21 people Tyranny of time. The money you invest today will have an uncertain impact at an uncertain point in the future Page 30 2011 Marketo, Inc. Marketo Proprietary and Confidential

Ways that Companies Measure 20%: No tracking 45%: Single Attribution 21%: Attribute Across Multiple Programs and People 11%: Test and Control Groups 3%: Market Mix Modeling Source: 2010 Lenskold Group / emedia Lead Generation Marketing ROI Study Page 31 2011 Marketo, Inc. Marketo Proprietary and Confidential

Example: Attribute across Multiple Programs and People? A deal worth $100,000 recently closed. Three people were involved in the deal: Person A attended Seminar A and Trade Show B Person B attended Trade Show B Person C was sent Direct Mail C $100,000 Revenue $25,000 $25,000 $25,000 $25,000 Seminar A $25,000 Tradeshow B $50,000 Direct Mail C $25,000 Page 32 2011 Marketo, Inc. Marketo Proprietary and Confidential

Need to Track All Touches Across People Screenshot: Marketo Revenue Cycle Analytics Page 33 2011 Marketo, Inc. Marketo Proprietary and Confidential

To Summarise Buying has changed forever the role of marketing must change as well Reporting is less important than DECISIONS that improve ROI Focus on financial metrics that matter to the CFO (profit, cash, revenue) Avoid cost and spend metrics focus on investment and return A trusted marketing forecast is the single most important step to make marketing a revenue driver, not a cost center Page 34 2011 Marketo, Inc. Marketo Proprietary and Confidential

Thank you! Page 35 2011 Marketo, Inc. Marketo Proprietary and Confidential

Segmentation Driving ROI

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The ICM Competency Framework

What do you want to achieve? ROI Investment ROP Participation ROE Engagement ROI Influence

Domino s Pizza

Segmentation Overview Engagement Segmentation: The Rationale Domino s Pizza direct marketing and analysis primarily occurs at a household level Focused on increasing the total spend of each household Engagement segmentation tracks customers purchase patterns over time through an enhanced RFM approach

Understanding Behaviour Utilises information about individual consumers behaviours to group like consumers together. Domino s Example Product & Basket Analysis Frequency Promotion Responsiveness

Customer Segmentation: Lifecycles & Engagement

Segmentation Driving Communication Segmentation Based Triggers Segment Trigger Initiation Lifestage Change Value Change Segment Content Personalisation Behavioural Geodemographic Media Relevant Messaging Action Based Triggers Initiating Behaviour Segment Content Personalisation Behavioural Geodemographic Lifestage Value Relevant Messaging Tactical & On-going Communications Target Audience Lifestage Value Behavioural Geodemographic Targeting Characteristics Segment Content Personalisation Lifestage Value Behavioural Geodemographic Relevant Messaging

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