This document discovers 12 ways or tools that marketing professionals can use to drive more returns and improve the effectiveness of their marketing plans.
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12 keys to innovative marketing planning (002)
1. Destination
12 keys to building an innovative marketing plan
based on 30+ years of marketing analytics
experience
2. Core Concept
An innovative plan requires
• Questioning assumptions
• Focus on first principles
• Identify and INVEST in “blockbuster”
opportunities for outsized ROI
3. Our Credentials
3
• Brought marketing ROI modeling to company for first time in 1996. In first year
developed models for Coca-Cola, Coke Light, Fanta and Sprite in 12 Countries.
– A year after this was done sales gains over prior year exceeded $300 million.
• Developed measure of customer-brand experience using social media. This model
determined Starbucks’ main strength lies in its in-store experience.
– This insight helped develop brand positioning for “Frappucino and Via Coffee” as an instore experience
versus bottled product in the counter well
– Frappuccino sales grew Starbucks total sales from +7% to +11% in the next year.
• Identified significant upside growth opportunity to drive higher restaurant sales by
investing significantly more in "dollar-value meals" one year after launch in 2005.
– Per recommendation, major & higher marketing investment in “dollar value meals” helped McD’s become
segment market leader in growth in 2006
4. 1. Identify Blockbuster New Products
On some occasions, a blockbuster & diamond-in-the-rough product comes along. One example of this
was McDonald’s Dollar Value Meals, which was launched in 2004-5; and in which McDonald’s
significantly under invested in during its first two years. By under-investing, McDonald’s lost a lot of
sales & profitability that they would never recover.
5. 2. Identify blockbuster messaging
In 2006, Cingular Wireless developed a blockbuster TV ad with the claim that they had the “fewest
dropped calls”. There is often over 100X difference in the ROI of the best ads versus the least effective
ads. Invariably, companies under invest in the former and over invest in the latter, leading to lost sales.
$(5.00)
$-
$5.00
$10.00
$15.00
$20.00
$25.00
Net Returns per Dollar of "Fewest Dropped Calls"
Cingular Ad
Net Returns per Dollar of Lowest ROI Cingular Ad
$21.43
$(0.20)
ROI Per Dollar of Cingular Wireless Ads 2006
6. 3. Identify points of diminishing returns
A high percent of spend is going to ads which do not generate any incremental revenue. This is because
50% of firms do not do any marketing ROI measurement and 85% of advertising is not copy tested.1 This
unequal distribution shown below is the poster-child for below par sales performance.
87%
100%
32%
55%
0%
20%
40%
60%
80%
100%
120%
1
18
35
52
69
86
103
120
137
154
171
188
205
222
239
256
273
290
307
324
341
358
375
392
409
426
443
460
477
494
511
528
545
562
579
596
613
630
647
664
681
698
715
732
749
766
783
800
817
834
851
Number of ads placed ranked by contribution
Cumulative % Contribution and % of Spend by Ad
% of Contribution
% pf Spend
1 The CMO Survey, Duke University Fuqua School, Feb. 2018
7. 4. Understand cross channel synergy
Synergistic effects occurs when multiple media running together drive more revenue than the sum of
each ad’s separate impact. For this retailer, this synergistic effect accounts for 56% of the total
advertising impact. Marketers tend not to know this & this inefficient spending results in lower sales.
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
Incremental$000's
Retailer: Annual Revenue Impact of Media, Direct & Indirect 2018
Direct Synergy (Indirect)
8. 5. Measure long term advertising effectiveness
In the case cited here, long-term advertising effects accounts for 77% of the net returns from all
advertising. 60% of marketing decision makers say they can not prove the long-term impact of their
marketing spend 1. Lack of knowledge here will result in lower sales.
1 The CMO Survey, Duke University Fuqua School, Feb. 2018
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
Media ROI Media ROI
$1.48 $1.48
$3.49
Advertising Short & Long-Term ROI per Dollar Spend
Short-Term Media ROI Only Long-Term Media ROI
9. 6. Build a winning mix of marketing channels
In the case below, we found a sizable synergistic effect coming from an upper-funnel TV media driving a
significant amount of revenue through digital search. Without this knowledge, this retailer would have
significantly under invested in TV
0
2
4
6
8
10
12
Separate Simultaneous Synergy from Television
Television Non-Branded Search Synergy from Television
10. 7. Identify advertising saturation thresholds
In the case below, the brand’s weekly media TRPS were above saturation 29% of the weeks and below
the minimum threshold in 48% of the weeks. This is inefficient spending which cost this brand 4% in
total sales.
Saturation
Threshold
Optimal
0
0.2
0.4
0.6
0.8
1
1.2
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140
RESPONSE
TRPS
TV response vs TRPs
response
29% of weeks
above saturation
levels
38% of weeks
below minimum
threshold
11. 8. Identify “blockbuster” locations
In the case below, we found location a key predictor of effectiveness for outdoor ads. These were
proximity to Disney World & Universal theme parks, electronic billboards and high traffic roads.
Investing in analytics to discover which locations work best has a large payoff.
$-
$5.00
$10.00
$15.00
$20.00
$25.00
I-4 Digital
OOH
408 Large
Bulletin OOH
429 Florida
Turnpk Digital
OOH
538 Digital
OOH
417 Large
Bulletin OOH
International
Drive Large
Bulletin OOH
$19.78
$2.89
$11.79
$23.33
$2.34
$1.65
Orlando Net Returns per Dollar Invested for Outdoor
Advertising
12. 9. Analyze time of day ROI
With this brand, there is a huge difference in the ROI of running TV ads on Prime time versus other time
slots. In this case, it does not make sense to run prime-time media ads. By reallocating all of its prime
media to non-prime, the brand could increase its ROI per dollar from $4.96 to $12.50.
$-
$200.00
$400.00
$600.00
$800.00
$1,000.00
$1,200.00
Early Fringe Erly Morning Early News Late Fringe Late News Prime Access Prime Sports Prme
$1,072.23
$9.25 $3.68
$662.07
$301.70
$0.59 $1.39 $0.74
TV: Returns per Dollar by Daypart
13. 10. Clarify the desired customer experiences
Most Important Positive Drivers:
1. The Brand & Place
2. For Meeting People
3. The Beverages
4. The Store Atmosphere
Positive SEI
3.93 = 100
Place2HangOut
>5.46= 211
9.1%
Place2HangOut
<5.46 = 83
91.9%
ToMeetPeople>
9.43 = 325
2.6%
ToMeetPeople<
9.63 = 188
6.5%
Beverage>14.0
= 466
0.6%
Beverage<14.0
= 288
1.9%
To Meet People
>5.4 = 229
3.8%
To Meet People
<5.4 = 85
85.5%
Beverage
>6.4 = 271
7.7%
Beverage
<6.4 = 74
77.8%
Place2HangOut
>3.6 = 126
5.9%
Place2HangOut
<3.6 = 76
71.9%
Atmosphere
>5.2 = 211.1
1.6%
Atmosphere
<5.2 = 67
70.3% 13
In Starbucks, we determined via Social media, that the instore customer experience
was more important in defining the brand than their own products. This
led Starbucks to redesign their promotions and advertising. For exam-
ple, their relaunch of Frappuccino. Their promotion said that “if you
come to Starbucks with a friend and buy a Frappucciino, we will give one
to your friend for free“. In terms of added sales, this
was the strongest promotion at the comapny in 10
years. The success of this event was due to the
importance of the instore “ social experience“.
14. 11. Align positioning with desired customer
experiences
Starbucks’ instant coffee, VIA, was launched in the Fall of 2009. Originally, its primary positioning
benefit
was for its ”Convenience”. In the next year, a large survey was taken and Starbucks found that
consumers were more driven by “authenticity” . In other words, consumers were saying that, what they
liked most about VIA was that it tastes like the original brewed Starbucks coffee. Starbucks changed
their positioning on the brand & its sales continued to grow, reaching $100 million in 2011.
2.8% 3.5%
8.2% 8.5%
9.6%
13.5%
19.8%
33.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Wonderful
Aroma
Delicious
Flavors
Great gift idea Convenient Tastes great
hot or cold
Tastes great For taking to
the office
Tastes like
brewed
Starbucks
coffee
ShareofCustomerPreference
Key positioning statements for Starbucks Via Coffee
15. 12. Revise marketing mix: enables 3-10% sales
growth WITHOUT budget changes
Contribution Current Spend Optimal Spend
POS-Promotion 197,562,720 $10,287,740 $10,982,205
TV 164,816,244 $16,044,354 $14,051,092
Radio 54,197,934 $4,725,052 $5,522,938
OOH 89,886,131 $4,639,756 $5,253,853
Digital Media 99,568,039 $2,679,593 $2,566,406
Total Optimized Spending by Channel
+17%
+7%
-12%`
-4%
+13%
This is from a comprehensive marketing model from one of the largest state lotteries with sales of about
$8 billion and marketing spend of $38.4 million (middle bar). We held total spend constant at $38.4
million and reallocated from less to more productive ads. In doing so, we found that this lottery could
grow by 12.1% by following our optimized spending plan.
16. Waste results from any course or activity that drives or moves a business away from an optimal business result
1. By under-investing in the best products, business growth will be difficult.
2. By not conveying the best and most effective messages in your marketing communications, strong brands can
not develop
2. By failing to test and measure marketing’s impact, a company is flying blind and maximizes the waste in its
marketing spend.
4. By getting the correct attribution across media channels a brand avoids inefficient spending.
5. In order to improve & maximize the ROI of marketing and advertising, marketers need to measure and account
for the long-term effect of marketing & advertising.
6. Each element of the marketing-mix does not work independent of other elements. In fact, there is a large
“synergy” across many media channels; and this synergy could be up to 60% of the total advertising impact.
Accurately measuring these synergies is critical for arriving at an accurate measurement of the marketing mix;
and without that guiding your marketing spending plans, your sales will fall short of their potential.
7. Across time, effective media placement requires that weekly spending levels not be below minimum thresholds
or above saturation points. Doing so will result in inefficient media that produces no revenue
8. With some media, such as Outdoor, location plays a big role in that media’s effectiveness. Analytics need to be
applied here, in order to find out which locations work best for your brand.
9. With media such as TV and Radio, timing plays a critical role in ad effectiveness. Here, media effectiveness
needs to rely on analytics in order to determine the best performing dayparts.
10. Many companies fail to understand what their customers like most about their brands. Adjusting a brand’s
media messaging to reflect what your customers value most will drive higher sales and profitability.
11. Brands need to position their products consistent with what customers like most about their brands. Doing so is the
key to driving sustainable growth.
12. Developing comprehensive marketing models is central to becoming a data-driven organization; and is a critical
tool for optimizing marketing spend across and within brands.
17. If you’d like further assistance
17
• Let’s setup a 30 minute Zoom meeting. If you wish, I would be glad to sign a mutual
NDA (Non-Disclosure Agreement). During our time together, we should learn about
each other’s businesses. For you, I would love to know about your company’s products,
mission and how you do marketing. For me, I can tell you about my business and how
the analytics we do might help your business. At this point, if there are ways I can help
your business, I might make some suggestions. But there is nothing required here or no
obligation inferred.
• Should we decide & agree on any proposal, that proposal will contain a guarantee. That
guarantee will be such that we can show you a plan that will generate a certain level of
sales (usually 2%) as a condition for payment.