Marcom planning analysis & reporting

Marcom Analysis & ReportingOctober 3, 2002

Marcom Analysis & Reporting

Objectives Accomplishments to dateOverview of Marcom ROI

modelDependencies

TopicsTopics

Marcom Analysis & Reporting

ObjectivesObjectives

Track performance of campaigns & communication channels

Marcom Analysis & Reporting

ObjectivesObjectives

Track performance of campaigns & communication channels

Inform budget planning & allocation

Marcom Analysis & Reporting

ObjectivesObjectives

Track performance of campaigns & communication channels

Inform budget planning & allocation

Enable channel management & strategic customer contacts

Marcom Analysis & Reporting

ObjectivesObjectives

Track performance of campaigns & communication channels

Inform budget planning & allocation

Enable channel management & strategic customer contacts

Establish effective reporting process

Marcom Analysis & Reporting

ObjectivesObjectives

Track performance of campaigns & communication channels

Inform budget planning & allocation

Enable channel management & strategic customer contacts

Establish effective reporting process

Deliver customer-oriented research

Marcom Analysis & Reporting

ObjectivesObjectives

Track performance of campaigns & communication channels

Inform budget planning & allocation

Enable channel management & strategic customer contacts

Establish effective reporting process

Deliver customer-oriented research

Determine Marcom ROI

Marcom Analysis & Reporting

ObjectivesObjectives

Marcom Analysis & Reporting

Accomplishments to Accomplishments to datedate

Roll up/reporting of 2002 activitiesReports for analysis of media creative costsIdentified marcom baselinesEstablished benchmarks for marcom mix allocationEnabled revenue reporting

Marcom Analysis & Reporting

Overview of Marcom ROIOverview of Marcom ROI

Marketers surveyed by MLC* waste on average 26% of marketing budget

Marcom Analysis & Reporting

Overview of Marcom ROIOverview of Marcom ROI

*Marketing Leadership Council Benchmarking Research: Measuring Marketing Performance, August, 2001

1%3%4%

19%20%

36%

17%

1-10% 11-20% 21-30% 31-40% 41-50% 51-60% 61-70%

% of MLC Respondents

Average Waste = 26% of Budget

MLC survey* shows limited ability to calculate marketing ROI

Marcom Analysis & Reporting

Overview of Marcom ROIOverview of Marcom ROI

*Marketing Leadership Council Benchmarking Research: Measuring Marketing Performance, August, 2001

6%

24%

35%30%

5%

0% 1-25% 26-50% 51-75% 76-100%

% of MLC Respondents

Fewer than a third of marketers can show returns for more than half of their marcom spend.

MLC obstacles to improved ROI:

Marcom Analysis & Reporting

Overview of Marcom ROIOverview of Marcom ROI

*Marketing Leadership Council Benchmarking Research: Measuring Marketing Performance, August, 2001

MLC obstacles to improved ROI:Lack of data (58%)

Marcom Analysis & Reporting

Overview of Marcom ROIOverview of Marcom ROI

*Marketing Leadership Council Benchmarking Research: Measuring Marketing Performance, August, 2001

MLC obstacles to improved ROI:Lack of data (58%)Lack of consistency in measurement (52%)

Marcom Analysis & Reporting

Overview of Marcom ROIOverview of Marcom ROI

*Marketing Leadership Council Benchmarking Research: Measuring Marketing Performance, August, 2001

MLC obstacles to improved ROI:Lack of data (58%)Lack of consistency in measurement (52%)Lack of expertise (50%)

Marcom Analysis & Reporting

Overview of Marcom ROIOverview of Marcom ROI

*Marketing Leadership Council Benchmarking Research: Measuring Marketing Performance, August, 2001

1. Must know current value of the customer

Marcom Analysis & Reporting

Requirements for measuring ROI*Requirements for measuring ROI*

*Measuring Brand Communication ROI by Schultz & Walters

?

1. Must know current value of the customer

Marcom Analysis & Reporting

Requirements for measuring Requirements for measuring ROI*ROI*

*Measuring Brand Communication ROI by Schultz & Walters

?X Must be able to identify messages sent

to customer

1. Must know current value of the customer

Marcom Analysis & Reporting

Requirements for measuring Requirements for measuring ROI*ROI*

*Measuring Brand Communication ROI by Schultz & Walters

?X Must be able to identify messages sent

to customer Must be able to measure the difference in response (income flow) from customer/prospect

X

Focus on business-building communications

vs. brand-building communications:

Marcom Analysis & Reporting

Model for measuring ROIModel for measuring ROI

Business Building Brand Building

Short-term returns

Transactions

Immediate expense

On the margin

Variable cost

Long-term returns

Brand value

Amortized investment

Replenishment

Fixed cost

Marcom Analysis & Reporting

1. Assess Demand/Opportunity1. Assess Demand/Opportunity

Requirement Assumptions

Historical demand

Estimated % increase/decrease in demand

Adjusted demand

Total legal market and requirement expressed in dollars and percentages

Totals SMLF LLF Corp Gov Academic

$0

0.0%

$0

$0

0.0%

$0

$0

0.0%

$0

$0

0.0%

$0

$0

0.0%

$0

$0

0.0%

$0

Marcom Analysis & Reporting

2. Assess Income Flow vs. 2. Assess Income Flow vs. CostsCostsIncome Flow Assumptions

Base share of requirement

Base income flow to West

West share of market and requirement expressed in dollars and percentages

Totals SMLF LLF Corp Gov Academic

0.0%

$0

0.0%

$0

0.0%

$0

0.0%

$0

0.0%

$0

0.0%

$0

Marcom Analysis & Reporting

2. Assess Income Flow vs. 2. Assess Income Flow vs. CostsCostsIncome Flow Assumptions

Non-Communication costs ($)

Non-Communication costs (%)

Communication costs

Advertising

Direct Mail

Internet

Trade Show

Promotion

Sponsorship

Publicity/PR

Distinguish communication expenses from non-communication expenses

Totals SMLF LLF Corp Gov Academic

$XX

X%

$XX

$x

$x

$x

$x

$x

$x

$x

$XX

X%

$XX

$x

$x

$x

$x

$x

$x

$x

$XX

X%

$XX

$x

$x

$x

$x

$x

$x

$x

$XX

X%

$XX

$x

$x

$x

$x

$x

$x

$x

$XX

X%

$XX

$x

$x

$x

$x

$x

$x

$x

$XX

X%

$XX

$x

$x

$x

$x

$x

$x

$x

Marcom Analysis & Reporting

2. Assess Income Flow vs. 2. Assess Income Flow vs. CostsCostsIncome Flow Assumptions

Contribution Margin ($)

Contribution Margin (%)

Income flow from each segment (less communication and non-communication costs) expressed in dollars and percentages

Totals SMLF LLF Corp Gov Academic

$XX

X%

$XX

X%

$XX

X%

$XX

X%

$XX

X%

$XX

X%

Marcom Analysis & Reporting

3. Determine baseline with no marcom 3. Determine baseline with no marcom spendspend

No Communication Investment

Change in Share Requirement (+/-)

Resulting Share of Requirement

Resulting Customer Income Flow to West

Less: Non-Communication Costs

Less: Communication Cost

Net Contribution

Assumptions:

Totals SMLF LLF Corp Gov Academic

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

Marcom Analysis & Reporting

3. Determine baseline with no marcom 3. Determine baseline with no marcom spendspend

No Communication Investment

Change in Share Requirement (+/-)

Resulting Share of Requirement

Resulting Customer Income Flow to West

Less: Non-Communication Costs

Less: Communication Cost

Net Contribution

Assumptions:

Totals SMLF LLF Corp Gov Academic

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

Customer requirement remains the same1.

Marcom Analysis & Reporting

3. Determine baseline with no marcom 3. Determine baseline with no marcom spendspend

No Communication Investment

Change in Share Requirement (+/-)

Resulting Share of Requirement

Resulting Customer Income Flow to West

Less: Non-Communication Costs

Less: Communication Cost

Net Contribution

Assumptions:

Totals SMLF LLF Corp Gov Academic

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

Customer requirement remains the same1.

West share of requirement will decrease2.

Marcom Analysis & Reporting

3. Determine baseline with no marcom 3. Determine baseline with no marcom spendspend

No Communication Investment

Change in Share Requirement (+/-)

Resulting Share of Requirement

Resulting Customer Income Flow to West

Less: Non-Communication Costs

Less: Communication Cost

Net Contribution

Assumptions:

Totals SMLF LLF Corp Gov Academic

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

X%

X%

$x

$x

$x

$X

Customer requirement remains the same1.

West share of requirement will decrease2.

Change of requirement estimates based on historical data and management judgment

3.

Marcom Analysis & Reporting

4. Estimate impacts of communication investment 4. Estimate impacts of communication investment

Communication Investment

Communication Efforts (initiatives)

Contact Points

Total Communication Investment

Change in Share of Requirement (+/-)

Resulting Share of Requirement (%)

Resulting Customer Income Flow to West

Less: Non-Communication Costs

Less: Communication Costs

Net Contribution

Measure total investment against customer groups

Totals SMLF LLF Corp Gov Academic

X

X

$x

X%

X%

$X

$x

$x

$X

X

X

$x

X%

X%

$X

$x

$x

$X

X

X

$x

X%

X%

$X

$x

$x

$X

X

X

$x

X%

X%

$X

$x

$x

$X

X

X

$x

X%

X%

$X

$x

$x

$X

X

X

$x

X%

X%

$X

$x

$x

$X

Marcom Analysis & Reporting

5. Determine marcom ROI 5. Determine marcom ROI

ROI Calculation

Incremental gain/loss vs. no investment

Incremental ROI

Compare total investment to resulting change in income flow

Totals SMLF LLF Corp Gov Academic

$x

x%

$x

x%

$x

x%

$x

x%

$x

x%

$x

x%

Marcom Analysis & Reporting

Dependencies & Dependencies & Impediments Impediments Data:

Don’t know market size/share

Marcom Analysis & Reporting

Dependencies & Dependencies & Impediments Impediments Data:

Don’t know market size/shareDon’t know customer value (LTV)

Marcom Analysis & Reporting

Dependencies & Impediments Dependencies & Impediments

Data:

Don’t know market size/shareDon’t know customer value (LTV)BMMS is lower priority client for DBM

Marcom Analysis & Reporting

Dependencies & Dependencies & Impediments Impediments

Commitment:

Top & Middle Management support

Data:

Don’t know market size/shareDon’t know customer value (LTV)BMMS is lower priority client for DBM

Marcom Analysis & Reporting

Dependencies & Impediments Dependencies & Impediments

Commitment:

Top & Middle Management support

Data:

Don’t know market size/shareDon’t know customer value (LTV)BMMS is lower priority client for DBM

Consistent budget management

Marcom Analysis & Reporting

Dependencies & Impediments Dependencies & Impediments

Commitment:

Top & Middle Management support

Data:

Don’t know market size/shareDon’t know customer value (LTV)BMMS is lower priority client for DBM

Consistent budget managementResources:Manage/maintain marcom roll-up & reporting

Marcom Analysis & Reporting

Dependencies & Impediments Dependencies & Impediments

Commitment:

Top & Middle Management support

Data:

Don’t know market size/shareDon’t know customer value (LTV)BMMS is lower priority client for DBM

Consistent budget managementResources:Manage/maintain marcom roll-up & reportingExpertise to build marcom ROI model