For someone like me who spent a lifetime in marketing, the change in marketing over the past decade has just been amazing. For almost 50 years till the turn of the century, marketing had a clear code and the insight processes also had a settled feel about it. We knew how much we could find out and what approaches we could use. The differences between brands were all to do with how well these processes (including creative) were applied.
With that, changes have been nothing short of a tsunami, with only some solid processes remaining in place. Almost all processes have changed to a degree. While qualitative and quantitative research remain the key to insights, social listening and online research has made these insights more real time. Similarly, the ability of the marketer to collect granular information and use statistical methodologies has changed the “warm and fuzzy” aspects of the earlier marketing paradigm and brought hard data to the forefront. This trend is getting more accentuated with data exploding all around us and the ability to manage this is already deciding who the winners are in the new marketing world.
We have read a lot on how digital online platforms are real time in terms of analytics and we need not focus on that again. All kinds of tools are available to the marketer to understand the impact of different online elements such as ad impressions, social buzz, impact of communities, contextual targeting etc. What is not clear to many a marketer, is how the other 90% spend that happens for a typical brand on offline media, consumer offers and below the line activities can be looked at with the same rigour. The good news is that Marketing Analytics has made huge strides in the offline space as well, making nonsense of the oft repeated quote “I know half of my advertising is wasted, but I do not know which half”.
Not only can you identify which half but can also predict with reasonable accuracy what will work in the future and by how much. Marketing Analytics can tell you which of your inputs are working (and which money is going down the drain) but also give you insights on which of the competitor activities are impacting your brand sales and equity. Optimization of resources available to marketing is now leading to effectiveness improvements of as much as 20 -30% for the same budgets spent, according to papers published by many learned researchers. Therefore it is not a surprise that analytics is an integral part of the strategy development of all leading brands world-wide. Analytics is also now identified as one of the key ingredients for the secret sauce of many leading brands such as P&G, Coca-Cola and Capital One.
Let me give you a few examples of how analytics helps in redefining a path that a brand takes. The first example is that of a cookie brand, leader in its market with a solid equity. This brand had however, after decades of delivering growth, started to deliver flat sales for the last few years. With a settled marketing deployment strategy, continuing high scores in brand tracking studies – the marketing team was in a fix. A complete mix analytics project was conducted across key sub markets. Apart from many insights on which media was working and its ROI at a channel level, the price impact at an a key SKU level that added to a more effective deployment, the astonishing insight was the complete ineffectiveness of a big consumer scheme run for the past few years. The key recommendation was to drop this promo and move the money to equity building new “news” on the brand as advertising was returning a good ROI. The result was a 20% growth in sales.
Another example is of a luxury brand, which found that its strategy worked in some markets but that similar deployment was not giving it results in other markets. Analytics could build models at a market level and come up with reasons for this difference in performance. In this case a universal strategy had its pitfalls and unless the marketer recognised the difference, it would be perplexing. The brand has now divided the market it operates into 3 clusters of sub-markets and designs strategy at a cluster level. The “difficult” markets are again on the growth path.
The above two are examples of how data available to a typical marketing company can be used for insight. But you can ask if this is so useful, why is marketing analytics not used more extensively? The reason for this is simple – the time for Marketing Analytics has only come now. With more data getting collected, faster computing possible, eco-system of consultants, data scientists and statistical software developing fast, Marketing Analytics has started the journey to redefine marketing as we know it.
Watch this space for more on this subject.
The writer is Manoj Tadepalli, director at RainMan Asia Consulting, a Marketing Analytics Consultancy.