Paul Laughlin, Managing Director, Laughlin Consultancy @LaughlinPaul
Actionable Budget Marketing Strategy
#MSMS2015
© Laughlin Consultancy Ltd, not to be used without permission.
Our digital goldrush❖ How many Twitter Followers?
❖ How many Facebook Fans/Likes?
❖ Has your video ‘gone viral’ on YouTube?
❖ How many downloads of your latest app?
❖ How many site/blog visits?
❖ How many people saw your commercial?
❖ Are we being recommended?
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What a business should measure
❖ Turnover is vanity…
❖ . . . Profit is sanity
❖ Return On Investment
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Simple caseSa
les
Reve
nue
& M
arke
ting
Cost
(£)
Marketing Spend (£)
Sales Revenue Marketing Cost Base level of sales
Sale
s Re
venu
e &
Mar
ketin
g Co
st (£
)
Marketing Spend (£)
Sales Revenue Marketing Cost Base level of sales Revenue - Marketing Cost
Net revenue view
Value destroying Marketing
Reve
nue
& Co
sts
(£)
Marketing Spend (£)
Net Revenue (Revenue - Marketing Spend) Fixed & Variable costs
Limitations of Net Revenue
Profitable Marketing Loss-making Marketing
ROME
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ROME = ( Δ∆Revenue – Δ∆Costs) / Δ∆Marketing Spend
From “Marketing Payback” Robert Shaw & David Merrick:
Two types of Marketing
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• Brand building
• Awareness & Consideration
• Maintaining Share of Voice
• Social can be both (from LinkedIn ads to broadcast YouTube)
ATL
BTL• Targeted communications
• Personalised & timed
• Driving action, often to buy
Econometrics for ATL
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• Statistical technique(s) to help assess which of many possible factors are key drivers of sales results, combine them in a quantitative model and then use to predict the future
• Business input needed on factors
• Establish Base
• Allow for ad-stock
• Evaluate ‘halo effects’
Experimental Method for BTL
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Response'Data'
(all'channels)'Contact'History'
F2F/Service'
Call'Centre'
Website'
Outbound'
eMail/DM'
Social'
STEP'1'Data$Gathering$
STEP'2'Matching$Back$ Response' Contact'
History'
STEP'3'Considering$rela5onship$and$other$drivers$
Brand$Rela5onship$
Learning$from$Econometrics$
Marketing attribution includes considering multi-media attribution &
multi-channel view of value
Targeted$$+$
Contacted$
Untargeted$+$
Contacted$
Targeted$$+$Not$
Contacted$
Untargeted$+$Not$
Contacted$
You need insight
CustomerData
Customer Research
Customer Analysis
Database Marketing
Feel &Measure
Target Marketing
ConvergeEvidence
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Marketing Attribution
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Incremental Modelled
Financial Reporting
Market Position
Media Tracking
Budget Allocation step 1❖ Annual Marketing budget
setting often done by:
❖ functional unit allocation
❖ share of revenue allocation
❖ share of voice allocation
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❖ More important to ‘rightsize’ the budget
❖ Optimising ROME not qualitative metrics
Budget Allocation step 2❖ Optimal allocation across:
❖ Products/Markets
❖ Brands
❖ Purchase Funnel
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❖ Compare ROME contributions of each ‘cube’
❖ Consider evidence for media interdependencies
Diageo Marketing Measurement
Impact on the Consumer
Low High
ROI (
5 ye
ar)
100%
-100%
Brand A Brand B Brand C
TV Print Digital TV Print Digital TV Print Digital
GB ————— DOWN
Ireland UP
Spain
France
Portugal UP NEW NEW
Greece
Australia
South Africa
Mexico DOWN UP
Proven Effective Not yet proven
Judged Effective Unsatisfactory (ineffective)
1. Dogs and Stars chart
2. Advertising effectiveness by brand
Credibility requires Accountability
❖ Use the language of profit
❖ Use ROME with Finance
❖ Converge attribution evidence
❖ Rigorous budget allocation
© Laughlin Consultancy Ltd, not to be used without permission.
linkedin.com/in/paullaughlin
+44 (0)7446 958061
Contacting me:
customerinsightleader.com
laughlinconsultancy.com
@LaughlinPaul
© Laughlin Consultancy Ltd, not to be used without permission.