What prevents marketing and finance leaders from effective collaboration?

Digital transformation is under way and it's changing the industry. One of the necessary conditions for successful transition is closer cooperation between marketing and finance leaders. In this article you'll learn what causes most disagreement and where they should find more common ground.  In June 2019, Ernst & Young published a report about potential that cooperation between CMOs and SFOs has. In the age of digital transformation MarTech helps businesses better understand their clients, track activity along the customer journey, stimulate growth, and analyze data to provide insights for marketers. Marketers use everything that new technology and data offer to invest smarter and increase customer loyalty and retention and adopt a customer-focused approach to marketing. And to successfully implement this data-driven approach they need significant investments, which should be approved by CFOs, who want to hear a strong business case and ROI forecast before making any decisions. That’s why collaboration and better dialogue between the two functions is crucial in the age of digital transformation. According to Ernst & Young survey of 304 C-level managers in finance and marketing, 90% think that these departments need to be more involved into one another’s activities, and 83% believe that this cooperation will… Read more »

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Cross-media measurement tools

One of the topical problems in 2019 is digital advertising and cross-media measurement. Since there is a growing number of complex techniques and methodologies, but no unified approach, most companies lack expertise to deal with it. Here we cover various measurement tools and their cross-platform application. Created in 1997, Internet Advertising Bureau UK (IAB UK) is a trade association, promoting sustainable development, the best practices and standards for advertisers, agencies, and media owners. Their goal is to address challenges the industry is facing and offer some solutions. Our article is an overview of the guide for marketers on best practices today that AIB prepared with MTM. Here you will find some useful advice on what models and techniques to use for digital advertising measurement within the environment of various media, both large-scale and more granular analyses. You will see how to combine them to your best advantage and create your own measurement strategy. There is no simple answer and solution to successful and effective advertising measurement because so many aspects need to be considered, like audience, media consumption, views, individual and combined performance of media channels, ad effectiveness and business outcomes. This article covers the last two aspects in the… Read more »

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Internet Marketing Trends

Internet has divided our lives into before and after and has brought about changes in every sphere of our lives. Marketing is also taking advantage of all the opportunities that online world has to offer, like digital media, programmatic ads and e-commerce platforms.This article is an overview of the latest marketing trends online. E-commerce and social media are growing and taking away customers from traditional retailers and media. Global Web Index Survey of over 50 thousand internet users all over the world found that among various social media platforms YouTube and Instagram have gained the most momentum over the last two years, even though Facebook is still the most popular platform. But if the trend continues, YouTube might overpass Facebook in the next couple of years. The amount of video content consumed by the internet users is growing, and advertisers are increasingly using video marketing to promote their goods and services. When it comes to social media, influencer marketing can be very effective, especially if an influencer has a loyal and highly involved audience. Currently the leading internet ad platforms in the USA are Google and Facebook, and with targeted advertising, that these platforms provide a company can better optimize… Read more »

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The right way to set up an in-house agency

After the transparency scandal broke out in the marketing industry, advertisers tried to solve this issue by in-housing some operations. Even though it initially results in ROI increase, it doesn’t mean this strategy is perfect. There are some factors that encourage companies to bring marketing functions in-house, but there are also some risks to consider. A large media agency Carat published a guide in April 2019 on how to efficiently in-house marketing operations and achieve the best results. Digital transformation requires changes, and relations between advertisers and agencies is one of the first things that should be reviewed to achieve more cooperation, a better dialogue and higher transparency. The problem with in-housing is that it loses its value over time and doesn’t result un as high ROI as initially. Sure it is inspiring to learn that one of the world’s largest advertisers Procter&Gamble set up its own in-house agency and managed to save $750 million in 2017, but such a transition should be performed very carefully with all the advantages and disadvantages taken into consideration. To achieve long-term positive results with in-housing you need to: align your company’s data strategy to its in-housing objective and  single out data maturity as… Read more »

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Samsung lays off employees after an internal audit

In Spring 2019, Samsung Electronics Co, a South Korean tech giant, audited its American marketing department for any internal policies violations concerning dealings with business partners and following that laid off a number of employees. While routine audits is a common practice, they have been on the rise recently due to extremely topical transparency issues. As you might remember, in 2016 the Association of National Advertisers (ANA) revealed a study by K2 Intelligence on behind-the-scene rebates and media buying processes in the US, that dropped like a bomb in the marketing industry community setting in motion the FBI investigation and dramatic changes. According to ANA’s “Trust Report” the trust between clients and agencies has declined by 28% over the last three years. To deal with this problem some major advertisers established in-house marketing teams that would act in the best of their interests, that’s exactly what Procter&Gamble did and managed to save $750 mln on advertising in 2018. ANA also founded a Trust Consortium that should set new standards for the industry and achieve necessary level of transparency in digital media supply chain. Among spheres that were audited as a part of this internal probe are dealings between marketing department… Read more »

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Increase your Marketing Mix Transparency

Transparency has been a burning issue since the 2016 scandal, but the industry is changing to solve any emerging challenges. Here you will learn what major factors contribute to this problem and how to address them effectively. In an April 2019 article, Forbes covers the issue of transparency and executive level visibility of marketing spend and offers advice on how to solve this problem. Since large companies worldwide invest more than $1 trillion annually into an increasing mix of marketing assets, media and technology, this money should be spent wisely and to the best advantage of the company. But you may be surprised at the fact that most CEOs and financial executives have too little visibility into this marketing spend, most of them don’t know how efficient the investments into sponsorship programs, digital media and technology are. It happens because finance and marketing departments currently don’t cooperate at the necessary level to improve tracking, classification and accounting for marketing spending. This lack of cooperation prevents companies from accurately measuring the efficiency of such investments. As a result CMOs are under pressure from their CEOs and have to spend additional billions of dollars to prove the value of marketing. Even though it’s necessary… Read more »

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Advertising trends in India 2019

  The Federation of Indian Chambers of Commerce and Industry (FICCI) together with Ernst & Young published a 300-page report on current state and future prospects of Indian Media and Entertainment sectors. This article is an overview of trends concerning advertising. India is a large and fast growing market, in 2014 it surpassed the United States, the EU, and China in terms of real GDP growth and has been steadily maintaining such level ever since. When it comes to media market, it’s a very diverse and the fastest growing sector of Indian economy that attracts a lot of investors. And the most effective sphere of M&E that provides major part of the revenue is advertising, which is expected to grow even more in the upcoming years. If we compare the Indian ad spend in terms of percentage of GDP to that of other large economies, we’ll see that India spends about twice less money on advertising than Japan or China, so there is room for a considerable growth. On the whole, there is a clear shift towards digital channels, which now account for 21% of all ad spends in India. And the figure will go up when more safety measures… Read more »

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Evolution of MMO. Part 2: Breakthrough.

    Over the last 40 years there have been some significant changes in Marketing Mix Optimisation: not only different models came and went, but also new advertising channels appeared. The digital revolution has changed the industry significantly, allowing companies to reach more potential customers and make better targeted ads. With so many new marketing channels the issue of optimal budget allocation is as relevant as ever. And some companies are unaware that huge databases they possess are the key to making more informed marketing decisions. By using this high-quality data along with improved techniques companies can react quickly to changes in consumer behavior, which is crucial in the digital age, where advertising campaigns are short-lived, and without the needed data even the most sophisticated models are useless. Accenture successfully introduced more granular data into Media Mix Optimization models complying with GDPR (General Data Protection Regulation) as a result of their partnership with Facebook. Firstly, Facebook records the results of paid advertising campaigns on their platform, then receives client’s consent and finally provides the aggregated data to Accenture, that uses the data in MMM. Such almost real-time feedback allows creating and changing Media Mix Models much quicker. Another perk of… Read more »

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Evolution of MMO. Part 1: MMO through Years

Accenture is one of the top global consulting companies, that provides a wide range of services and solutions across over 40 industries and different business functions in more than 120 countries. Accenture combines business and technology to improve their clients’ performance. In one of their articles they cover the development of Marketing Mix Modeling and Optimization through years including the latest techniques and implementation of granular data in MMM.  This article is a summary of how MM Optimization has changed over the last 40-30 years becoming more effective with every innovation, yet it’s not perfect, and has both advantages and disadvantages. Promotion is vital for a business’s success, and MMO helps to make sure that different media channels are used in the most effective way by creating a statistical model and analyzing its results to ensure optimal budget allocation.  Here 3 following stages of development will be discussed Similar Linear Regression Mixed Model State Space Model The article is presented as a case study of a toy manufacturer ToyCo with a $100M budget, that wants to know what part of their sales can be attributed to marketing and which ad channels have more impact on sales. Similar Linear Regression Marketers… Read more »

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Three Steps to Transform Marketing Agencies

According to a global consulting firm PwC, most marketing agencies all over the world are using a no longer effective business model and should start making significant changes to catch up with their clients’ needs. They should take a much more integrated approach to all their operations. This article is an overview of the current situation in the industry and four models that can be implemented to create a next-generation marketing agency. Each strategy carries certain risks and requires to overcome some obstacles, but advantages far outweigh the disadvantages and provide new opportunities. Over the last decades, most large agencies have taken over numerous smaller ones in spheres like digital, media planning and buying, branding, and creative services. Despite being financially accountable to their holding company, these subsidiaries act independently and even compete with each other. There is nothing wrong with competition, as it sure helps to drive progress and generate the best ideas, but today marketing agencies have enough outside rivals to compete with as it is, for example platforms like Facebook and Adobe or in-house agencies established by some companies. Procter&Gambe created its own marketing department and managed to save $750 million on advertising and production costs in… Read more »

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