ROI Real-Time
It’s a perennial complaint: there’s no really good way to measure the impact of marketing. “Making marketing more measurable” was the greatest challenge of 2004 for 55% of respondents to a recent study commissioned by Boston, MA-based Unica and conducted by Forrester Research.
So what do you do — give up? When agency execs were polled for PROMO’s 2004 Industry Trends Report earlier this year, just 10.4% said ROI measurement had an extreme effect on their clients’ overall marketing and promotional strategies. (On a scale of one to six, with six being “extreme effect,” 25.8% gave ROI measurement a four, and 19.9% answered three.)
The task of ROI measurement gets more complex as marketing disciplines become more integrated. More than estimating the traffic passing a billboard or the demographic yield for a 30-second spot, brand marketers must now parse out the individual and combined impact of promotion, advertising and p.r. efforts. Fortunately, the calculus has matured with the advent of the Internet and mobile phones. The accuracy of self-entered data, the creation of ready-for-use databases and the immediacy of real-time results have more brands shifting marketing dollars to campaigns that include some sort of online or text-messaging presence.
“More and more [brands are] moving promotions online to increase database and customer attention,” says Sheila Murphy Brian, senior VP for Dallas-based SCA Promotions. “Eventually, there will be online aspects to nearly every promotion.” SCA provides insurance and prize coverage for the sponsors of games, contests and sweepstakes.
One of her favorite examples is the Summer 2003 version of Pepsi’s Play For $1 Billion sweepstakes, which SCA insured. That under-the-cap effort (with support via weekly broadcasts of drawings on The WB TV network) resulted in more than 1 million customers submitting over 20 million online entries. As a result, Pepsi captured demographic info for future marketing efforts. Tracy Locke, Wilton, CT, developed and handled the campaign, with media support by sibling shop BBDO, New York City.
The beauty of digital promotions is the ability to measure both sales and consumer behavior. “Today it’s no longer just about eyeballs; it’s about action and real-time hard data. It’s data that the Web and CDs with hyperlinks can provide, versus billboards that can’t,” says Ron McInnis, president of Los Gatos, CA-based Acquire, Inc., which creates promotional CDs that send consumers directly to a Web site for prize downloads as well as recording their information.
Digital promotion helps improve a marketer’s ROI in four ways, McInnis says. First, it reduces data entry costs. Basically, the consumer does all the data entry for the client, instead of paying a third party to enter consumer names and addresses into a database from a piece of paper.
Second, it improves data accuracy, since the consumer is entering his own info once. And who better to ensure that it’s accurate, versus a data entry clerk who must enter thousands of names over and over again?
Third, digital promotion saves time. And since the data from a Web or CD promotion is collected in real-time, it can be monitored on an hour-to-hour or day-to-day basis, generating further insight into consumer behavior.
Fourth, if the promotion is not producing favorable results, it can be changed or enhanced mid-stream to produce the desired result before all the campaign funds have been spent.
That flexibility is invaluable, since it helps consumers cut to the chase, says Josh Linkner, CEO of Farmington Hills, MI-based ePrize.
“Let’s say a consumer goes to a Web site for an automotive promotion. Based on how he or she answers questions on buying intent or family size, the entire promotion can be dynamically driven,” Linkner says. “Based on the response data, we can serve up promotion content that is the most appropriate to that consumer.” Such data can also help drive offline promotions. The car manufacturer can send the single female from Miami a kit about the convertible via direct mail, he says, whereas a dad from Los Angeles might receive mini-van info.
Data generated via online promotions can also be used to build future promotions, McInnis says. “The data helps determine how compelling the call to action for the consumer was. For example, was the sweepstakes registration [process] too long based on a high number of dropouts?”
Vibes Media takes data collection a step further with its text-messaging promotions. It recently ran a program for Hershey’s Milk Shake drink that motivated customers to text message UPC codes from each bottle to a phone number promoted on in-store displays. Each text message became a chance to win a trip for 10 to the X-Games in Los Angeles.
“The consumer is right at a White Hen convenience store and taking nothing home [but the product]. But with an online promotion, you have to stick someting in your pocket and take it home,” says Jack Philbin, president of Chicago-based Vibes.
Text messaging further improves ROI, Philbin says, by giving Hershey’s parent Dean Foods real-time data on when the product is consumed, not just the fact of purchase. The client also gets a breakdown of sales per area code. “We can tell if there’s low participation in a state, and they can send someone out to make sure the promo is on display,” he says. “It’s an incredible way to monitor the dollars you’re spending on a program.”
Like online promotions, text messaging promotions also deliver self-service data entry. “It’s not making the brands money, but it’s improving their ROI,” Philbin says. Better yet, the data is available in real-time. “When you have real-time access to that kind of information, who in their right mind is going to ignore it? Especially when you’re a VP of marketing or a brand manager, or an agency account manager.”
Made to measure?
While personalized promotional content has boomed in recent years, traditional one-size-fits-all marketing is hardly obsolete. The visual impact of billboard or stadium signage, a sample placed in someone’s hand and a consumers word of mouth still count.
For example, when Meow Mix went on the road with the Meow Mix Summer Games earlier this year, it had an impact on more than just the people who filled out entry forms.
“People were registering what was going on, and while they may not have participated in the games, they may have taken a giveaway, so we could chart how many samples were given out,” says Matthew Glass, president of Grand Central Marketing, New York City, which handled the promotion for Meow Mix.
And in June, MassMutual Financial got an unexpected return on its investment in New York Mets shortstop Kaz Matsui, spokesperson for the Japanese subsidiary of the Springfield, MA-based company.
In a pre-game ceremony, Matsui received a samurai helmet from MassMutual, and that video footage was shown during the game broadcast on FOX Sports New York. When Matsui was shown in the dugout, FOX broadcaster Fran Healy not only talked about its partnership with Matsui, but talked about its partnership with the U.S. Open, which is played across the parking lot from Shea Stadium.
While most sports marketing firms calculate their ROI based on some form of comparative ad value, the in-game mentions were literally priceless because of their credibility, says Bill Pearse, VP of New York City-based The Graubard Group, the p.r. firm that assisted with the media component of the Matsui announcement.
“Fans tuning in to the game can tune out commercials and they may have become somewhat immune to on-field signage, but they still hang on every word from their hometown announcer,” Pearse says. “Fran Healy’s frequent references to the deal and the Matsui presentation, especially in conjunction with the game story about Matsui’s playing streak ending, could not be missed by anyone watching the game broadcast.”
The same video footage is aired in Japan, but MassMutual does not know how much talk about MassMutual Japan was heard overseas.
“I was really surprised to see the footage of Matsui being presented the helmet,” says MassMutual VP Suzanne Tougas, adding that FOX “over-delivered” for her company. “If you had to buy that footage, it would have been too expensive. The value of that alone is huge, let alone what we’d get in return on a bus or the billboard.”
With stadium signage, Tougas says companies such as Joyce Julius & Associates count the on-screen impressions, add that time, then let the sponsor know how that compares to that amount of commerical time.
Other marketers advocate supply-chain solutions that link to cash registers to determine the ROI on promotions. For example, Dunkin’ Donuts is using Waltham, MA-based Demantra’s Spectrum and Promotion Effectiveness solutions not only to track sales during the summer promotions for cold drinks, but also to determine if consumers had their beverage with a breakfast sandwich, a bakery item or as a solo purchase.
“With the competitive landscape in which we operate, it’s important for us to measure ROI and focus on marketing activities that deliver the greatest benefit,” says Nancy Goldston, strategic planning manager at Dunkin’ Donuts. “This increased visibility into marketing strategy and performance enabled us to determine which marketing and advertising programs work best, ultimately improving the return on our promotion spending and increasing profit margins.”
By integrating the software, Dunkin’ Donuts franchisees have the analytics and predictive modeling capabilities to consider impacts on the cold drink promo, such as cannibalization and halo effects. This provides Dunkin’ Donuts with a single tool to collect and analyze disparate market data, enabling greater visibility into the true impact of promotions — not only on overall sales, but also on sales of individual products in specific categories, including hot, cold and specialty beverages, among others.
“With this type of technology, you can see the dramatic double-digit increases and the ROI from promotions that turn a profit,” says Mike Liebsen, senior director of product marketing for Demantra.
And that’s a real-time return.
BOOK REPORT
Marketers need to focus on more than ROI
Measure What Matters
Reconnecting Marketing to Business Goals
By Laura Paterson VisionEdge Marketing, Austin, TX
Living under a microscope? So are most marketers these days. A new book presents a metrics framework to help readers ensure their marketing efforts are tightly connected to business goals — and that brand marketers can prove it.
“Our goal was to provide a framework along with practical suggestions readers can use right away,” says Laura Patterson, president of VisionEdge Marketing and the book’s author.
Patterson says that marketers need to re-examine the metrics they are using from the perspective of the conversations they are going to have with the executive team.
“It’s very hard when you’re sitting at the executive table to have more influence over the direction of the company if your metrics don’t connect with the primary business outcome,” Patterson says.
CEOs and CFOs tend to look at market share, how it has been sustained or decreased, what kind of lifetime value is being grown in a customer base, and the value of the brand is faring. This doesn’t mean current metrics are not relevant, but that CEOs and CFOs need to know how marketers are driving the deeper picture.
According to Patterson, you won’t be able to articulate a strategic conversation until you adopt measures related to market share, lifetime value and brand equity.
“Most times the notion of ROI, which is being driven specifically by the CFO, is really around a very short-term sales focus — incremental sales and how this campaign is going to do something in the next 30 to 60 days,” she says. “If we continue to go down that path, then we’re really going to do that at the expense of the more strategic things.
“You see a lot of companies that have had short-term bumps in their sales, but in the long term the company has been in decline,” she continues. “The reason is they got involved in short-term projects and not the long-term issues that face the company.”
Patterson isn’t suggesting marketers stop paying attention to ROI, but she does believe that marketers should recognize the opportunity to play more strategic roles and that they may be missing that opportunity if they are exclusively tactical.
“By the time a program is up and running, I don’t think anything is going to happen within the first 30 days,” Patterson says. “By the time everything is planned and executed, it’s still going to be more than 30 days. So I think short-term is two quarters to be effective, with long term being about 18 months. But every company is going to be different.”
