Category: Research

Our solution to the current ROMI challenges

Even though marketing technology is advancing, existing tools don’t fully match arising needs and challenges of the industry. There are still no universal measurement standards, so marketers around the globe are struggling to justify huge investments, which amount to $560 bln annually, according to A. Guttmann research. In the article we will cover the limitations of the current ROMI approaches, that McKinsey experts point out, and our capabilities for dealing with them. Due to users massively shifting to online and mobile content, a huge part of the marketing spend is allocated to digital channels. It’s a reasonable strategy, but what we do wrong is measure the results of such campaigns. We focus too much on short-term results and user-level data, that seem more accurate, just because the tools like multi-touch attribution allow it, and not always because it’s necessary. Personalized messages and near-time optimization are important, but we shouldn’t forget about the upper funnel and earlier stages of the customer journey. A large share of marketing spend goes into brand-building activities, but it is not so thoroughly analyzed or its performance is evaluated by the same standards as the lower funnel spends, which results in a false understanding of the… Read more »

CMA reveals digital advertising market problems in the UK

The digital marketing spend is growing putting marketers under pressure to justify huge investments. And even with a variety of measurement techniques it’s not easy to find what really works, especially taking into account transparency issues. In this article we discuss new problems related to digital media and how to cope with them. An independent government department in the UK that promotes competition and consumer law – Competition and Markets Authority’s (CMA) – carried out an investigation of digital advertising sphere as a part of the new strategy designed to better handle quickly growing digital economy. In July 2019, they started looking into operations of online platforms, including the two biggest ones – Google and Facebook. The report voices concerns about transparency of the business, but before we go deeper in detail, let’s take a look back and see how we got to the current situation. It all started with the 2016 ANA/K2 Intelligence report on media transparency in the U.S., which was a true wake-up call for the advertising industry. The report revealed numerous non-transparent business practices like rebates in different agencies. The fact that they failed to act in the best interests of their clients severely shook the… Read more »

Why Adidas changes its marketing measurement approach?

Research shows that using marketing technology to measure effectiveness results in significant performance improvement. But what if the approach you use is flawed and measurement results are only preventing your business from making the most of advertising. Such was the case with Adidas that had been over-investing in digital channels due to MTA analytics. Turns out even multinational corporations like Adidas aren’t immune to mistakes. But who can blame them? I mean weren’t we all charmed by promising advantages of multi-touch attribution. It’s a relatively new tool that functions at a highly granular level and is especially suitable for measuring digital campaigns. MTA can analyze individual customer journey and find what marketing activities lead to conversion. This high level of granularity makes you think that the tool is more accurate than it really is, but this major strength became its main problem when legal restrictions concerning data privacy came into force. GDPR severely limits the potential of attribution. Other limitations of MTA are: It covers a limited number of KPIs Most models cover only digital channels and can’t account for offline touchpoints. It attributes too much credit to digital advertising Privacy regulations limit its functionality It’s difficult to stitch touchpoints… Read more »

How to use MMM and MTA correctly?

There is a variety of tools for measuring marketing effectiveness and even more solution providers on the market. Using the right ones is crucial for your business success. In this article you will find out how to choose the most suitable vendor and correctly apply marketing mix modelling and attribution to achieve outstanding results. Now there are no doubts about whether to evaluate marketing performance because statistics and analytics is more reliable than experience and gut feeling. According to Gartner’s 2018 survey, where 503 respondents from large companies were interviewed, marketers who use strategic measurement tools report significant performance improvement. It happens because high-quality measurement allows improving planning capabilities and increase enterprise value. The debates now are going on about which tool is the most suitable to evaluate marketing effectiveness. Keep in mind that before applying any measurement approaches define what success should look like and choose the right KPIs that align with your overall strategy. Strategic marketing measurement is on the rise for three reasons: Significant performance improvement; Increasing cost of media; for example CPM for primetime TV has increased by 43% over the last 5 years. To justify growing spends or find new, more efficient channels high-performing marketers… Read more »

Nestlé’s hybrid approach to in-housing

What is more effective: external agencies or an in-house team? It seems Nestlé found a perfect compromise in the heated debate: they gathered a team of external specialists supervised by internal executives to achieve more effective marketing management. Here you can find what functions they decided to handle themselves and what goals they were pursuing with the move. In attempt to increase marketing effectiveness and transparency the world's largest food company pulled experts in media and tech from partner agencies and appointed internal executives to lead them. Today many large advertisers are thinking about moving at least some capabilities in-house, even though the process is not very simple, and there are a few concerns and problems related to it. Partially it was triggered by the FBI investigation into non-transparent practices in the industry. But it’s worth mentioning that in-housing is not just a temporary trend, it’s becoming a reality, especially hybrid approach to it. According to a recent ANA (Association of National Advertisers) study, 78% of their members have an IHA. If Nestlé’s internal team proves a success, it can become a model case for other companies. And it seems to be a good strategy, because they can choose the… Read more »

How to deal with in-housing problems

According to a joint research by In-House Agency Forum and Forrester, 64% of American corporations had an in-house agency in 2018 compared to 42% in 2008. The trend is becoming a reality even though it’s costly and challenging. In this article we investigate the benefits of building internal capabilities, functions better managed internally and ways to deal with widespread concerns and obstacles. It is quite obvious that large brands like Procter & Gamble, Ally Financial and Clorox wouldn’t set up internal marketing teams if it was useless. For example, P&G established its own agency in 2018 as a part of their new marketing strategy saving $750 mln. Apart from cost efficiency in-housing is also driven by the opportunity to gain greater brand insights, increase transparency and control over the creative. Another advantage of IHAs is they have the same goal with the brand and are more invested in successful outcome, which is not always the case with outside agencies. Sometimes they have conflicting interests and focus not on promoting the advertiser but on promoting themselves. It’s definitely not always the case, but happens occasionally. In-house teams better understand the business, know more about your products or services. They are insiders… Read more »

Marketing spend: to cut or optimize?

Over the last decade marketing effectiveness has been slowly declining and the industry has gone through a lot of changes. In attempt to save budgets many companies decided to reduce this expenditure area, but how wise was this move, given that marketing drives growth and enterprise value? This article covers an approach everyone should take when it comes to allocating budget. Marketers all over the world are under pressure to justify their huge spend, which amounts to 10% of revenue on average. In 2017 Binet & Field published a book called Marketing Effectiveness in the Digital Era, where they wrote that marketing effectiveness is currently declining. There are a few possible reasons behind such a trend: media fragmentation / complexity; too many metrics: address this issue by identifying key metrics for your organization; marketing effectiveness culture is still developing; lack of collaboration within a company: marketing and finance alone have four obstacles complicating their cooperation; narrow focus on some attribution models; focus on short-term results: the pie chart below demonstrates when campaign performance is measured. More than half of all respondents focused on immediate outputs, while only a third took into account longer time periods. But ads’ potential to drive… Read more »

12 competencies marketers develop to achieve best-in-class marketing accountability

Today, around 10% of revenue is allocated to marketing, and in 2018 these spends amounted approximately to a trillion dollars worldwide. All marketers are under pressure to justify such huge investments, but top professionals know how to cope with it. In this article you will find out how to become a high-performing marketer as well as increase accountability and transparency in your company. Despite all technological advancements in the industry, accurate quantification of marketing contribution remains a serious challenge, mainly because there are no universal standards in this area. Forbes addressed the problem by establishing an initiative together with the Marketing Accountability Standards Board aimed at helping businesses better measure, optimize and understand the contribution of marketing. They also conducted a research involving 800 CMOs to select the most effective tools, strategies and approaches available now. Every detail matters, all promotion channels, traditional and digital must be used in the most effective and efficient way, every investment should be a well-informed decision. Today data is power, so it doesn’t come as a surprise when experts mention it among analytics and martech that improve marketing performance. Here are nine key takeouts from the research, by doing which a company can get… Read more »

How marketing increases enterprise value?

There is no doubt marketing contributes a lot to company’s growth, but how to accurately define its contribution is still to be determined. In this article we cover most common challenges marketers face today and provide some valuable advice from a 2018 research by Forbes on how to apply marketing techniques wisely and quickly implement data-driven insights in your decision-making to increase the enterprise value. According to the research where over 800 marketing executives were involved, investments in marketing have become the major contributor to company value in today's digitally driven economy. Market conditions are changing quickly, intangible assets like brand equity, innovations and customer relationships are becoming increasingly important. To monitor complex, fast changing customer journey and address numerous other problems marketers worldwide annually spend about $1 trillion, moreover they are struggling to justify these huge expenses as well as measure their effectiveness. Most CMOs use over twenty tools; with this variety it’s getting more difficult to measure and optimize marketing investments. The need for higher marketing accountability shows that an international measurement standards should be established. Here are three reasons why organizations need to better understand, measure and improve marketing? Investors and owners need to see the impact… Read more »

Improving marketing effectiveness. Part 2: How to measure?

Most companies face the challenge of accurate assessment of their marketing activity results, and with numerous tools and approaches available in the industry it is easy to get confused. Companies should choose wisely and act quickly to keep pace with trends and generate business growth. A white paper on marketing effectiveness by global consultancy Gain Theory helps to do just that, and in this article we cover the most informative and interesting insights, including those from marketing top managers of 40 large UK brands that together spend over £7bn on advertising. After we have agreed on what marketing effectiveness is, understood where we stand in terms of progress and chosen the crucial metrics, it’s time to move on and find the most suitable measurement tools and approaches to building an effectiveness team. Best Available Tools Test & Learn – the idea to compare the results of test and control groups is not new, but advanced online data collection technology really makes a difference. The advantage of this method is that the results can be easily analyzed, but there are some challenges and necessary conditions if you want the results to be accurate: – success is clearly defined the hypothesis you are testing;– group… Read more »