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#EffWeek
The Creation and Communication of
Marketing Value dffh Sanoma – Get Tomorrow 2019 sdfad
Fran Cassidy, Founder, Cassidy Media Partnership
#EffWeek
Components of S&P 500 Market Value
17% 32%
68%
80%
84% 83%
68%
32% 20% 16%
0
10
20
30
40
50
60
70
80
90
100
1975 1985 1995 2005 2015
Intangible Assets Tangible Assets
Source : Ocean Tomo llp, Intangible Asset Market value study 2017 / Jonathan Knowles Type 2 Consulting
Research, Databases, Contracts, Copyright, Tech, Software, Patents dfg
Marketing, Brand 20%
#EffWeek
0
5
10
15
20
25
30
35
40
45
50
Average brand value 20% but varies between 5 - 45% by sector
Source : Jonathan Knowles : Type 2 Consulting - analysis of data from annual brand value league tables by Brand Finance, Eurobrand, Interbrand, Millward Brown for 6 yrs 2010 to 2015.
Brand Value as % of market capitalisation
#EffWeek
Brand Z “Strong Brands” Portfolio v S+P 500 v MSCI World Index
Brand Z - 124.9% S+P 500 - 82.1% MSCI - 34.9%
2007 2010 2011 2012 2013 2014 2015 2016 2017 2009 2008
Value increase over 10 yrs April 2006 to April 2017
Source : Kantar Millward Brown
#EffWeek
Gap exists between some of the perceived benefits of ‘brand’ and current business priorities
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Increased Profitability
Margin improvement
Future Cash flow
Risk Reduction
Benefit of Brand Business Priority
64%
63%
72%
41% 53%
49% 71%
59%
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Boards are not confident in brand management Knowledge of brand building is perceived as average to poor in 50% of boardrooms
0 20 40 60 80 100 120
Marketers
Business Leaders
Excellent Good Average Poor Very Poor
Source : FT / IPA - Board Brand Rift Q: “How would you rate the knowledge and understanding of how a strong brand is built and maintained at board level in your organisation?
52%
#EffWeek
Are we in danger of losing brand building skills? A third of marketers rate themselves average to poor
0 20 40 60 80 100 120
Marketers
Business Leaders
Excellent Good Average Poor Very Poor
Source : FT / IPA - Board Brand Rift Q: “How would you rate the knowledge and understanding of how a strong brand is built and maintained at board level in your organisation?
33%
#EffWeek
When business leaders understand how brands are built they believe in the benefits of a balanced approach to marketing
Low Brand Understanding High Brand Understanding
49%
83%
Q: “Our board understands that a balanced approach to short and longer term marketing objectives will deliver a stronger commercial performance.” Strongly Agree / Agree
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New Performance related pay image here From Sanoma graphic designer
#EffWeek
5 Key Factors to develop better marketing
effectiveness
#EffWeek
Pure financial activities increasingly automated
Finance has moved from reporting business performance to driving it
Source : McKinsey, 2018
1.Collaboration ( esp finance )
100
33
40
20
18
11
19
9
4
67
40
60
43
34
24
18
17
18
12
10
20
21
45
19
36
4
4
12
10
18
11
38
36
75
79
77
Business development
External relations
Audit
Risk management
Treasury
Financial planning and analysis
Tax
Financial controlling and external reportin
Revenue management
Cash disbursement
General accounting operations
Fully
automatable
Highly
automatable
Somewhat
automatable
Difficult to
automate
#EffWeek
How companies make money
12
Shareholder Value/
Profitability
GROWTH
Expand
market
Convert
non-users
Increase
usage
Enter new
segments
Market
penetration
Take share from competitors
CASH/MARGIN/
PRODUCTIVITY
Reduce lower
profit activities Raise prices
Cut costs
Variable
costs
Fixed costs
Growth Focus
Margin/ Productivity
Focus
Source : Based on Peter Doyle / Marketing Management and Strategy
#EffWeek
How companies make money
13
Shareholder Value/
Profitability
GROWTH
Expand
market
Convert
non-users
Increase
usage
Enter new
segments
Market
penetration
Take share from competitors
CASH/MARGIN/
PRODUCTIVITY
Reduce lower
profit activities Raise prices
Cut costs
Variable
costs
Fixed costs
Growth Focus
Margin/ Productivity
Focus
Source : Based on Peter Doyle / Marketing Management and Strategy
Marketing Contribution
#EffWeek
Know where you are adding value
Do The Maths
Common language
Show your metrics matter
Have an evidence based mindset
5 Steps to Building Bridges with Finance
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I am a Finance person. I like certainty. Marketing also look at – I can’t
quite remember the name of it – something to do with ‘brand equity’.
If I’m really honest from a finance point of view I don’t give much
weight to the softer ones – the ‘brand equity stuff’.
Finance Director
2. Language
#EffWeek
Change the terminology
Non Working Media
Management Information
Brand Halo Effect
Soft Metrics
Longer Term Spend
Asset Creation
Business Intelligence
Margin Protection
Levers to unlock future growth
Risk reduction, Positive Cash Flow
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Change how we frame the task
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- Put effectiveness at the beginning not at the end of the process
- Move towards a Learning culture rather than a Justification culture
3. Process
CHECK
PLAN
DO ADJUST
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Government
Communication
Service
Which of the government’s narrative Communications strategy/idea
strands does this activity fall under?
Context and background
(100 Words max) Evidence of effectiveness
Policy Aim Summary and breakdown of
spend
Communications objectives Value for money
( ensure these are robust, numeric
and measurable )
What is the expected return
on this marketing investment
Target audience/s ( as an ROI figure )?
#EffWeek
Emotional messages drive almost twice as many profit effects as rational / activation
messages 35
%
Rational messaging Combined approach Emotional priming
Ve
ry l
arg
e p
rofi
t e
ffe
cts
30
% 25
% 20
% 15
% 10
% 5%
0%
Source: Binet & Field 2013
#EffWeek
• Source: ‘Profit Ability: the business case for advertising’, November 2017 • Gain Theory long-term ROI study
18%
42%
58%
Attribution
modelling
Short-term
econometrics
Long-term
studies
The majority of
advertising
returns occur in the
long-term
The proportion of total
profit revealed by
attribution modelling
and econometrics
#EffWeek
4. Toolbox
Do you have data or do you have evidence ?
Do you understand the quality of that evidence ?
Are your metrics credible to senior management and have they agreed them?
Are you in a “reporting culture” or a “So What, What’s Next” culture ?
Price elasticity ? / Quality of the message?
#EffWeek Source : Data 2 Decisions 2014
Top 10 ways to Improve Advertising ROI
Position Profit Multiplier Factor
1 2 3 4 5 6 7 8 9 10
Market/Brand Size and share 18.00 Creative and ad length 12.00 Budget setting across geographies 5.00 Budget setting across portfolio 3.00 Multimedia campaigns 2.50 Budget setting across variants 1.70 Cost and product seasonality 1.60 Product .v. equity .v. seasons 1.40 Laydown of spend over time 1.15 Target audience 1.10
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Measures/Metrics that matter*
Methods
Intent to Purchase
Digital Attribution
Experiments/A+B testing
Methods
Integration of above
Hierarchy/Agent models
Net Promoter Score ( NPS )
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Consideration
+1%pt Uplift in sales
0.5 - 1.5%pt
Clear link between Consideration + Base Sales / SOV + Price
SOV increase
+10%
Decrease in
price sensitivity
5-20%
Source : Profit Ability – Gain Theory/ Ebiquity
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Hierarchy of Metrics
Source : Gain Theory / Measurement Strategy
#EffWeek
- Improve commercial and analytical skills and improve language used
- Use customer understanding skill for internal stakeholders AND external customers
- Focus on the credibility of brand health metrics and the integration of datasets
- Develop an evidence based mindset. Do not be afraid to communicate uncertainty
- Capability increases influence and ability to challenge status quo and grow together
5. Capability