Marketing Analytics Stephan Sorger Disclaimer: All logos, photos, etc. used in this presentation are the property of their respective

Marketing Analytics

Stephan Sorgerwww.StephanSorger.com

Disclaimer:• All logos, photos, etc. used in this presentation are the property of their respective copyright owners and are used here for educational purposes only

© Stephan Sorger 2015 www.StephanSorger.com; Marketing Analytics: Cover Page

http://www.stephansorger.com/

Chapter 1.

Introduction

Disclaimer:• All logos, photos, etc. used in this presentation are the property of their respective copyright owners and are used here for educational purposes only

© Stephan Sorger 2015 www.StephanSorger.com; Marketing Analytics: Introduction 1


Topic Description

Definition (Broad) Broad definition (but too vague):Data analysis for marketing purposes, from data gathering to analysis to reporting

Definition (Applied) Techniques and tools to provide actionable insight- Models - Metrics

Models Decision tools, such as spreadsheets

Metrics Key performance indicators to monitor business

Marketing Analytics: Models, Metrics & Measurements

Models:Decision tools,like spreadsheetsExample: Bass Forecasting

Metrics:KPIs to monitor business,like charts and graphsExample: Sales/ Channel



Models and Metrics

Metrics = Gauges:- Monitor situation- Diagnose problems

Models = GPS:- Representation of Reality- Decide on course of action



Metrics Gone WrongMilitary leaders in World War II used metrics regarding airplane damage incorrectly“Reinforce damaged areas”Abraham Wald, a statistician skilled in analytics, said: Right Metrics, Wrong Conclusion“Reinforce non-damaged areas” (fixing selection bias from studying only airplances that returned)



Trends Driving Marketing Analytics Adoption

Before:Huge budgets

Now:Tiny budgets

MarketingAnalyticsAdoption

Online Data Availability

Reduced Resources

Massive Data

Accountability

Data-Driven Presentations

Improve productivityReduce costs“What gets measured gets done”

Data to back up proposalsPredict success of plans

Initiatives to capture customer informationWhat to do with all that data?

Cloud-based data storageOnline = speedOnline = convenience

Do more with lessScrutinized budgetsMarketers must show outcomes



Marketing Analytics Advantages

MarketingAnalytics

Advantages

Persuade Executives

Side-step Politics

Encourage Experimentation

Drive Revenue

Save Money

Marketing as cost centerMarketing as profit centerCorrelation between spending and results

Old way: Execute campaign guess outcomeNo longer tolerate such an approachNew way: Predict outcome

Test multiple scenarios before proceedingRun simulationsPredict which will work best

Focus on revenue impact from marketingCorrelation between spending & results

Some CEOs do not appreciate marketingShow impact of efforts with metrics



Topic Description

Model Simplified representation of reality to solve problemsExample: Advertising effectiveness model

Purpose Evaluate impact of input variablesExample: Assess how advertising impacts sales

Decisions Models provide guidance on marketing actionsExample: Decide on ad budget to achieve objectives

Models: What is a Model?

Advertising Effectiveness:Response (sales revenue)increases with increasing ad budgetuntil Point A, then decreases

Sales

time

A



Topic Description

Verbal Expressed in words“Sales is influenced by advertising”

Pictorial Expressed in picturesChart or graph of phenomenon

Mathematical Expessed in equationSales = a + b * Advertising

Styles: Verbal, Pictorial, Mathematical

Verbal Pictorial Mathematical

Sales = f(advertising)


Topic Description

Descriptive Characterize (describe) marketing phenomenonIdentify causal relationships and relevant variablesExample: Sales = a*Advertising + b*Features +c*…

Predictive Determine likely outcomes given certain inputsClassic “What If?” spreadsheet exerciseExample: Sales forecast model

Normative Decide best course of action to maximize objective,given limits on input variables (constrained optimization)“Given X, what should I do?”Example: Determine price using forecasts at diff. prices

Models: Forms

Descriptive Predictive NormativeSales

Advertising

This Way


Topic Description

Variable Quantity that can be changed, or variedExamples: Advertising budget, Sales

Independent Variable Variable whose value impacts dependent variable (x)Controllable: Advertising budgetNon-controllable: Customer age

Dependent Variable Variable representing marketing objective (y, or output)Responds to changes in independent variableFor-profit: Revenue, Profit; Not-for-profit: Donations

Models: Variables


Models: Terminology: Linear Response Model

Y = a + b * X

Y = Sales (Dependent Variable) (Output)a = Parameter: Y-interceptb = Parameter: Slopex = Advertising (Independent Variable) (Input)

1

b

Slope = rise/run = b/1

X (Advertising)Independent Variable

Y (Sales)DependentVariable

Y-intercept(Sales levelwhen advertisingspending =0)


Topic Description

Definition Business-oriented key performance indicatorsExamples: Sales per channel, Cost per sale

Purpose Monitor and improve marketing effectivenessTake corrective action as necessaryExample: Marketing expense as percentage of sales

Metrics Families Groups of control metrics; Diagnostic & predictive infoExample: Sales metrics: sales/industry; sales/product

Metrics Dashboards Marketing automation systems- Eloqua, Marketo, PardotSalesforce automation systemsNetsuite, Salesforce.com

Metrics

Metrics Dashboard


Let’s Get Started!

East Bay

South Bay

Peninsula

SF

North BayExample: Team 1: SF-MarinaTeam 2: SF-DowntownTeam 3: East BayTeam 4: North BayTeam 5: Peninsula/ South Bay

Participant Introductions- Name Say your name clearly so others can hear you- Reason for being here What you hope to learn in the course- Geographical area Desired geographical area for team meetings

Listen for your area during introductions

During Class Break- Meet with Others Meet with others from your area during break- Contact Info Exchange email addresses & phone numbers- Get to Know Familiarize yourself with others during cases


Documents

Marketing Analytics Stephan Sorger Disclaimer: All logos, photos, etc. used in this presentation are the property of their respective