It's Not the Size of the Data -- It's How You Use It
Smarter Marketing with Analytics and Dashboards
Author: Koen Pauwels
Pub Date: March 2014
Print Edition: $29.95
Print ISBN: 9780814433959
Page Count: 240
e-Book ISBN: 9780814433966
Buy the book:
Such data-driven action typically involves the following four questions:
1. What happened?
2. Why did it happen?
3. What will happen if?
4. What should happen?
Better, faster, and more transparent answers to these questions help
establish marketing accountability.
Yet marketing accountability—let alone the accurate calculation of
return on marketing investment (ROMI)—remains an elusive goal for
most companies, which are struggling to integrate big and small data
and marketing analytics into their marketing decisions and operations.
In their March 2013 article, McKinsey experts share that “in our experience,
the missing step for most companies is spending the time
required to create a simple plan for how data, analytics, frontline tools,
and people come together to create business value. The power of a plan
is that it provides a common language allowing senior executives, technology
professionals, data scientists, and managers to discuss where the
greatest returns will come from and, more important, to select the two
or three places to get started.”
The benefits of “getting started” and “marketing smarter” are huge
in both academic studies and business cases. Even a small improvement
in using marketing analytic dashboards brings companies on average 8
percent higher return on assets compared to their peers. This benefit
increases to 21 percent for firms in highly competitive industries.
Organizations of any size and in any industry have seen sustainable
competitive advantage from using marketing analytic dashboards.
However, only 16 percent of large international companies use marketing
analytics. In my experience, this percentage is even lower for small
and medium-sized firms across America, Europe, and Asia. I see similar
issues across multinationals and companies with a few dozen
employees and in industries ranging from business-to-consumer,
government, and business-to-business. The next three short stories illustrate
the issues that have inspired this book.
In early 2012, I found myself at the U.S. headquarters of a fast-moving
consumer goods multinational. I had been called in to moderate the
discussion between the chief financial officer (CFO) and the chief marketing
officer (CMO) on marketing effectiveness. The CFO insisted on
measuring all main activities either by ROMI or by return on marketing
objective (ROMO). The list of activities included market research,
marketing data management, offline marketing communications,
online marketing communications, promotions, and direct marketing.
Across all activities, the CFO was unhappy and had three concerns:
objectives were not clearly defined, the timing of expected returns was
not specified, and the marketing department showed resistance to
measurement. I helped the CMO to:
* Clarify marketing objectives and align them with the
* Overcome marketing’s resistance to measurement.
* Obtain excellent and relevant data.
* Develop the analytics that showed not just the size but also
the timing of the profit returns to marketing investment in
The second illustrative tale took place in an executive meeting at a
European-based business-to-business manufacturer. Country managers
were accustomed to obtaining a certain percentage of their revenues
to spend on marketing. Faced with new competitive threats, all
decision makers felt that this rule was far from optimal and needed to
change—but how? Some countries asked for more money for joint promotions
with their customers—to then sell more of their product to
end consumers. Others considered this simply giving away money to
the customers, and instead advocated a direct-to-consumer campaign
to create awareness and preference for their product. Still a third group
believed the firm should target policy makers directly with sustainable
business credentials, pointing to huge successes of having a prime minister
come talk at the company’s trade shows. Unfortunately, the lack of
before/after measurement of sales lift left country managers unwilling
the change their positions. In this case, I worked in three steps. First,
I ensured that each campaign had a stated, measurable objective that
was defined in place and time and had a before/after measurement as
backup. Second, after collecting data across years and countries, I categorized
all campaigns by objective and ran analytical modeling to
quantify the link between each objective and profits, accounting for
country differences. Third, I recommended an improved allocation in
the direction of the findings.
The third story I want to share involves an Asian manufacturer of
consumer durables who had only sixty employees and nobody in
charge of data maintenance, let alone of the analytics to make them
actionable. Managers were overwhelmed by the hundreds of online
metrics regarding their paid, earned, and owned media, and had little
insight in the exact costs or returns of their offline marketing, which
makes up 85 percent of their budget. When sales quotas loomed, they
would often “shoot from the hip”—doubling spending on marketing
actions that were untargeted and probably inefficient. A nagging feeling
was telling them they might be increasing sales, but at the expense
of profits. Moreover, several customers told them they put in an offline
order based on online marketing touch points. Should online be credited
for offline sales? The offline marketing manager definitely did not
think so! I worked with both the offline and the online marketing manager
to discuss how both channels contributed to sales. Based on this
framework, the company put in place the right metrics and collected
the data over time. A marketing analytics dashboard allowed both
managers to play around with spending scenarios and observe the
projected size and timing of profits, not just sales. They agreed on dramatic
budget shifts and saw their company’s profit—and their reputations—
Across these cases, we see the same three issues:
1. Unclear vision on how objectives relate to company
2. Uncertainty on the size and timing of expected returns
to marketing investment.
3. Resistance to measurement.
Sound familiar? Wouldn’t it be great to have a comprehensive set of
steps that can help you improve marketing decisions at your company?
How about a book that is steeped in both scientific research and practical
applications to guide you along?
This book is all about marketing analytics dashboards, what they
are, how you can develop, use, and renovate them—and how they help
you make better decisions. This book guides you along a full journey of
data, analytics, dashboard insights, and the action they inspire. In specific
chapters, you will learn the dashboard lingo, how to start the dashboard
initiative, how to build it, design it, and implement it, and how to
renovate the dashboard to maintain its relevance to decision makers in
your organization. This book doesn’t shy away from the tough parts,
both technically and practically, and it gives special attention to hot
topics such as leveraging online data and emerging markets. You will
learn about what worked to overcome obstacles, how specific companies
did it, and what the evidence shows for your situation.
Welcome to the brave new world of marketing analytics dashboards.
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