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November 18, 2014 | By: Damon Ragusa

The Evolution of the Modern Marketer to Smarter, Faster Decisions

INSIGHTS

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THE EVOLUTION OF THE MODERN MARKETER TO SMARTER, FASTER DECISIONS

We live in a highly connected world where real‐time access to news, data, and information has transformed the way both people and businesses make decisions. More and more businesses are adopting technology to harness both the amazing amount of data available as well as to automate the execution of processes previously done manually. Marketing is no exception to this. With real-time bidding systems, ad exchanges, and “big data” projects, just to name a few, the focus of the marketer’s job is blurring with that of the CIO. With all this data, the risks remain high in what Eric Schmidt, then CEO at Google, termed the “last bastion of unaccountable spending.” And, the biggest risk is maintaining a focus on the consumer, while developing habits and adopting the appropriate technology to keep pace with a fast changing marketplace.

Reducing Risk is Key

Planning is all about reducing risks. Traditionally, marketers plan annually, aligned with the cycle of TV and print media buying. The planning timeframe would typically address only the following year. The key stakeholders form an executive committee where the marketer makes recommendations based on insights and analytics of historical spend data and aggregations of consumer data, which becomes foundational to the plan. In a stable marketplace, this backward‐looking approach has been an acceptable method because of the assumption that the future will be much the same as the past. In today’s rapidly changing marketplace, it is becoming increasingly difficult for marketers to continue to eliminate risks through traditional planning methods for four critical reasons: • The proliferation of consumer devices

and emerging media channels has dramatically increased the number of options marketers have for investments. With digital media now embedded in every aspect of the customer journey, marketers must understand the impact of these emerging trends on consumer purchase behavior, alongside traditional marketing channels.

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INSIGHTS


• The barriers for people to switch from one media to another and adopt new technologies are disappearing. People are no longer consuming information in a vacuum but across channels and, often times, simultaneously; they have more CHOICE and VOICE than ever. This increasing power of the consumer, coupled with the screaming pace of technology, makes it more critical than ever for marketers to understand and align their marketing spend with their consumer segments.

• The marketer has become inundated with the explosion of rich, but complex data

sources. From a world where only GRPs mattered, marketers are now overwhelmed with impressions, mentions, likes, clicks, etc. As a result, much of the focus in planning has turned to data collection, processing, and cleansing issues rather than focusing on the core planning issue – how to target, reach, connect, and influence consumers to take action.

• Marketing planning committees are becoming overcrowded with stakeholders, each

working in their own silos, and each acting as an advocate for the tactic they represent. Within a company, there is a growing number of functional team members covering a variety of roles all connected to the overall marketing plan such as price, promotion, digital, brand, distribution, etc.

Additionally, companies are working with more agencies than ever that play a key role during the planning process. Because of this, much of the discussion around the future of planning revolves around the relationship between the agency and the marketer, which, again, is losing sight of the core questions marketers need to address.



Answer The Right Questions

The byproduct of these four intersecting trends is that it is significantly more difficult for marketers to process competing pressures and answer the foundational questions of a successful marketing plan. The big questions marketers want answers to is how to understand, target, reach, and measure their relationship with customers in such a volatile and data-driven marketplace. More specifically, they want to know: where to spend, how much to spend, and when to spend in order to hit the right people at the right times with the right message to drive engagement and purchase probability of a product or service. And, they can no longer operate on an annual planning cycle; marketers need the flexibility to plan often and the speed to gain valuable insights faster to adapt to market changes.

To navigate this ever-increasing complexity, marketers must shift the focus from data -intensive tactical planning to a smart data approach for strategic planning that is centered around real people they are

targeting. And, to keep with the rate of change, they must rely more on technology that breaks down the barriers to a more efficient, agile, and objective planning process. As a result, planning will be more focused on linking the brand directly with consumers to positively impact sales, market share, and financial performance in a transparent and measurable way.

Many of the insights, analytics, and processes used to inform marketers today are based on aggregations of consumer data, boiling all the diverse demographics, media consumption, and behaviors into one average consumer. This makes it impossible to connect the very people they target to specific marketing activities and messages. For example, marketers have relied on classical marketing mix models for decades to provide insights on marketing effectiveness. These models have never provided insight as to how different marketing plans can activate different people, especially new media with no historical data. This is because the basis of the plan is to analyze the marketing effectiveness in the past marketplace rather than what the marketplace moving forward will look like.

What makes marketing work is that different people use media to varying degrees and to carry out very different day-to-day activities. The planning process must be able to synthesize the audience estimates commonly used to make media buying decisions (GRPs, AQHs, circulation)



with emerging digital measurements (CTR, Impressions, mentions, likes, conversions, etc.), and reconcile all these against measures of how people behave. A consumer-centric approach to marketing is a more data-agnostic way to measuring and forecasting the ROI across channels, tactics, and consumers to make more informed marketing decisions. It ensures that when making key marketing decisions on how and when to spend marketing dollars, it will have the greatest possibility of positively impacting performance.

Rather than aggregating all of the data together for analysis, a consumer-centric approach to planning starts from the bottom-

up. To be effective in an evolving marketplace, marketers must take an objective and detailed view of the demographic make-up of their consumer targets, the behavioral traits related to media consumption, and the way in which demographics are correlated to media consumption. For example, older people are more likely to watch more TV and read more magazines, and younger people are more likely to use mobile phones and social media. Once this foundation is laid, standard marketing science rules around purchase probabilities become more practical because it’s not just about how people consume media but how they respond to marketing and purchase products or services.

Take a Consumer Driven Approach

With increased C-suite pressure for accountability, marketers across industries are already adopting a consumer-driven approach to planning as a more sustainable and effective method. A market leading pharmaceutical company was looking to optimize its direct-to-consumer (DTC) marketing plan for the launch of its new product, while maintaining constant flexibility to implement post‐launch adjustments in real-time. Because of strict FDA regulations around approved consumer targets and no historical data existed, the company turned to a consumercentric approach to plan and optimize its go-to market plan. Leading up to the launch, the company was able to simulate patient responses in varying targets and geographical markets to measure how each tactic influences patient adoption and purchase behavior in order to accurately reflect and improve the ROI of its plan. The product leadership team leveraged the results to better forecast ROI by marketing tactic and consumer group. It also was able to incorporate external influences such as healthcare professionals and doctors and how these would influence short and long-term product sales volume.



A large provider of automotive products wanted to forecast and measure all its marketing activities against its consumer segments for the greatest return on investment. Additionally, the company was focused on growing sales within the Hispanic population and wanted to understand how to allocate spend to optimize results within this segment. But, not all of its marketing activities could be tracked back to specific consumer demographics. By adopting a consumer-centric planning model that focused less on collecting massive amounts of data and more on identifying the most relevant data for individual channels, the company was able to measure and compare more than 200 marketing activities across four of its product lines to forecast consumer purchase behavior within its demographic‐specific segments.

The company not only achieved ROI clarity by media channel, but also was able to forecast the cost benefit of Hispanic mass media and determine that another media channel allocation would be more profitable. Additionally, the company identified a link between Hispanic and Youth segments for more integrated and profitable campaigns.



Focus on Smart Data, Not Just Big Data

Completely shifting the foundation from where marketers have traditionally built their plans can be a huge undertaking. They are still left with piles of data from traditional as well as emerging media and digital channels that they must sort through to extract value through a “smart‐data” approach. Today, marketers are inundated with technologies that purport to help manage cross‐channel marketing.

Many of these technologies speak of handling “big data” with powerful algorithms, but we’ve been down this road before. The advent of customer relationship management to support one-to‐one marketing initiatives during the 90s started with a lot of promises of sorting through huge amounts of data about consumers that would revolutionize the planning and execution of marketing.

In time, the practical solutions emerged and were adopted after years of marketers complaining about being “data rich but information poor.” Digital marketing channels offer access to even larger amounts of data, but “big data” is a means to an end. At the end, we are still left with the fundamental questions that the marketer is asking. The solution to today’s twist on being “data rich and information poor” is figuring out how to extract “smart data” from the myriad of new data silos being created, and the “smart data” needs to be managed in a technology system that seamlessly integrates with the planning process.

Don’t Just React — Forecast

Marketers, especially marketers who are doing more and more digital marketing, no longer plan just once or twice a year the way marketers did when the majority of their budget was invested in TV and print – two media outlets that historically worked primarily on an annual basis. Now, especially in the digital world, marketers are continually trying new things, seeing what works, and making changes. The archaic processes of calling each agency and getting recommendations from each functional head through excel or PowerPoint in a binder that collects dust on a shelf is no longer a sustainable model to stay ahead of the competition. Innovative technology that incorporates market and consumer research into a multi-year planning process for more accurate forecasts as well as advanced collaborative capabilities will emerge as market leaders.



A large financial services firm was looking to optimize its marketing spend to acquire new households at a cost effective price. Having recently increased its digital marketing efforts, the company also wanted to measure the impact on short- and long-term financial performance. And, all of this needed to be done considering the overall lifetime value of the households they were targeting. By using consumer-centric planning software, the company was able to quantify and provide in-depth analysis on how it’s measured and unmeasured marketing activities, including digital, directly affected the addition of new accounts of varying value. Additionally, it had actionable guidance on how much and where to invest its marketing budget in the future to influence behavior within its target audience. The software also provided a more agile and collaborative tool during the planning process to include the committee of principals and managing directors as well as agency stakeholders in one central system for a more streamlined planning and approval process.

As the marketplace continues to fragment, the risk is the consumer is slipping through the cracks. Marketers spend too much time and resources investing in solutions to react to the change, rather than embracing the fundamental shift that is occurring in the way they think about and approach marketing planning. It’s becoming a world where the marketer needs to think more like a CIO. They need to understand the information in front of them and put what’s most important at the forefront – the consumer – to drive technological advancement that integrates, automates, and streamlines the marketing process from research and planning to collaboration and execution. From Schmidt’s warning, an age of marketing empowerment has risen that will drive the evolution of the modern marketing world where every decision is accountable and starts and ends with the consumer.

To speak to someone at ThinkVine to learn new ways to put the consumer at the center of your marketing planning process, visit www.thinkvine.com or call + 1.513.842.5900

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