How Big Data Brings Marketing and Finance Together – Wes Nichols – Harvard Business Review

How Big Data Brings Marketing and Finance Together – Wes Nichols – Harvard Business Review.

When Raja Rajamannar became CMO of MasterCard Worldwide in 2013, he moved quickly to transform how the credit card giant measures marketing. His artillery: Advanced Big Data analytics. MasterCard had always been a data-driven organization. But the real power and full potential of data was not being fully realized by marketing.

Rajamannar involved finance early. To spearhead analytic efforts, he assigned a finance person – who was already embedded in marketing – to create an ROI evaluation framework and integrated her deeper into the marketing function. With a better understanding of the marketing context, she has brought a new level of financial discipline and rigor to the marketing team. This has reframed the conversation to balance the interests of both sides.

For example, in the credit card business, understanding the importance of deals with issuing banks is critical. While marketing might focus on maximizing card transactions, or swipes, finance understands that not all swipes are equal (depending on the deal with a given bank). Likewise, marketing wants to clearly quantify the impact of its long-term branding efforts while finance is more focused on macro-economic drivers of marketing performance, such as interest rates, employment levels, inflation and retail sales.

At many companies we work with, analytics becomes the connective tissue between the different visions of what drives results emerging from marketing and finance. Combining data from both marketing and finance, analytics reveals the true picture of what drives marketing performance, and connects marketing to revenue.

Inside Intel

Consider Intel, which began eyeing Big Data’s potential to quantify marketing’s contribution to revenue in about 2010. As an ingredient brand, Intel often struggled to link marketing to P&L impact. But David Ginsberg, VP, Corporate Insights, Brand and Strategy, saw the potential for analytics to create a bridge between marketing and finance by illuminating marketing’s impact on sales – the focal point of where marketing and finance meet.

Intel formed a special Marketing ROI (MROI) team – a first-of-its-kind collaboration between marketing and finance. The result has been transformational. Intel’s research team, for example, has been rebuilt as an analytics and strategic insights team that identifies, collects and harnesses unprecedented amounts of the company’s data. This now provides its marketing teams globally with predictive decision-making capabilities they never had before. Financial accountability for marketing performance has become front and center. Marketing and finance share a fully transparent analytics platform that all parties can access to run what-if scenarios, optimize marketing-dollar allocations across products and markets, and get course-correcting feedback on the performance of those allocations.

In one instance, we worked with both Intel and Facebook to quantify how the chip maker’s social media marketing on Facebook affected consumer PC sales. This targeted effort showed that paid Facebook ads and the company’s own unpaid (organic) Facebook postings increased Intel brand and product search volume by 1.9%-2.3% – which in turn led to increased PC sales.

Organizational Anachronisms Exposed

Similar reform in the relationship between marketing, finance and analytics is taking place across many sectors – from manufacturing and retail, to financial services, travel and entertainment, pharmaceuticals and toys. Analytics has exposed organizational anachronisms such as adversarial marketing-finance relationships and a focus on traditional year-long planning (instead of constant optimization) in marketing groups little changed for decades. This has spurred re-thinks that include changes to key executive relationships.

At Mattel, another company we work with, a cross-functional group of executives from insights, brand, marketing, media, digital and finance now meets regularly to adjust spending allocation plans based on modeling and analytic results, says Ed Gawronski, Global SVP. This has brought agreement on a common set of ROI metrics and helped facilitate decision making about investing in short-term sales versus brand equity.

In effect, analytics creates a common language between marketing and finance for the first time by allowing the two functions to clearly see marketing’s impact on financial performance. Consider how USAA – the nation’s 6th largest consumer P&C insurer – has reinvented how marketing, finance and data analytics work together, starting with a first-ever partnership between the CMO, CFO and Chief Data Analytics officer.

Roger Adams, CMO says: “As USAA developed into a data-driven organization, we were able to accurately predict the impact of different marketing investment decisions. It’s completely reframed the conversation.” Forrester Research recently published a case study describing how USAA’s new partnership between marketing, finance and analytics has helped deliver better business insights.

At MarketShare, we’ve seen these partnerships play out in a change in who’s sitting at the table during discussions with major brands about advanced marketing analytics technology. Once mostly marketing, it’s now equal parts marketing, finance and analytics. In some cases, finance even leads a vendor selection process once dominated by marketing.

Companies that fail to update their marketing organizations and continue using antiquated measurement solutions are at risk of being left behind. New marketing-finance relationships combined with advanced analytics technology are increasing efficiency and delivering “found” dollars to the bottom line. Short of creating a killer new product or service, there are few ways a big company can move the needle quite so dramatically.

CMO Spend 2014: Running on Digital (Gartner Infographic)

CMO Spend 2014: Running on Digital (Gartner Infographic)

Selon une enquête de Gartner, menée entre juillet et septembre 2013 auprès de marketeurs américains de grandes entreprises, les budgets de marketing digital devraient augmenter de +10% en 2014.
En 2013, le marketing numérique représentait 28,5% du budget marketing total, contre 25,5% en 2012. La plus grosse part du budget était consacrée à la publicité digitale (12,2%), contre 10,3% pour le site internet corporate, 9,6% pour le commerce numérique et 9,5% pour le marketing mobile et social. En moyenne, les entreprises ont dépensé 10,7% de leur chiffre d’affaires 2013 sur l’ensemble de leurs activités marketing, et 3,1% en marketing digital, contre 2,5% du CA en 2012, soit +20%. En 2014, les dépenses en marketing digital devraient représenter 3,3% du CA.

L’étude “Marketing 2020″ insiste sur l’enjeu d’intégration – Désilotage (Think, Feel, Do)

“Plutôt que d’essayer d’imaginer le marketing digital du futur, le véritable enjeu aujourd’hui est de réinventer le rôle et l’organisation du marketing à l’ère du digital (…)”, a résumé Patrice Favière, Directeur EffectiveBrands, qui a révélé les résultats de l’étude “Marketing 2020″ lors du HubForum 2013. Menée en partenariat avec l’UDA, cette étude découle de 250 entretiens avec des CMO à l’international.
Le rôle du marketeur évolue puisque dans 58% des entreprises, il collabore étroitement avec la direction générale pour déterminer les priorités stratégiques de croissance, contre 38% en 2006.

L’enjeu d’intégration passe, selon les entretiens, par un “dé-silotage” de la structure pour repenser les compétences des équipes, dans un modèle 365/24/7, selon 3 axes : Think (marketing analytics), Feel (customer engagement), Do (content production).
L’étude révèle que les entreprises sur-performantes dans leur secteur investissent en moyenne 20% de plus que les autres dans le développement des compétences de leurs équipes.

Les challenges qui attendent les CMO dans le futur seraient : l’infobésité, le respect de la vie privée, la multiplication des points de contact et les silos.
Les entretiens d’une heure de plus de 250 CMO et marketers américains, français, britanniques, brésiliens, chinois, singapouriens, néerlandais, belges et allemands ont été compilés et 10 231 professionnels du marketing de 92 pays ontété interrogés.

Coca-Cola Marketing Shifts from Impressions to Expressions – Joe Tripodi – The Conversation – Harvard Business Review – StumbleUpon

Coca-Cola Marketing Shifts from Impressions to Expressions – Joe Tripodi – The Conversation – Harvard Business Review – StumbleUpon.


Joe Tripodi leads global marketing, customer management and commercial leadership as Executive Vice President and Chief Marketing and Commercial Officer of the Coca-Cola Company.

Coca-Cola Marketing Shifts from Impressions to Expressions

This post is part of Creating a Customer-Centered Organization.

A lot of us remember when the role of the CMO was much simpler. Information flowed in one direction: from companies to consumers. When we drew up our plans and budgets, the key metric was consumer impressions: how many people would see, hear or read our ad?

Today the only place that approach still works is on Mad Men. Now information flows in many directions, consumer touch points have multiplied, and the old, one-size-fits-all approach has given way to precision marketing and one-to-one communications. Perhaps the most consequential change is how consumers have become empowered to create their own content about our brands and share it throughout their networks and beyond. It has changed my role as the chief marketing and commercial officer at Coca-Cola, and the company’s approach to consumer engagement as we work to double our business by 2020.

In the near term, “consumer impressions” will remain the backbone of our measurement because it is the metric universally used to compare audiences across nearly all types of media. But impressions only tell advertisers the raw size of the audience. By definition, impressions are passive. They give us no real sense of engagement, and consumer engagement with our brands is ultimately what we’re striving to achieve. Awareness is fine, but advocacy will take your business to the next level. (I used to think that loyalty was the highest rung on the consumer pyramid until I became the CMO of Allstate Insurance. There, I saw clearly that so much business was driven through personal referrals and advocacy by individuals for their agent.)

So, in addition to “consumer impressions,” we are increasingly tracking “consumer expressions.” To us, an expression is any level of engagement with our brand content by a consumer or constituent. It could be a comment, a “like,” uploading a photo or video or passing content onto their networks. We’re measuring those expressions and applying what we learn to global brand activations and those created at the local level by our 2,700 marketers around the world. For example, in our 24-Hour Live Session with Maroon 5, we captured impressions (the number of online views) but gained tremendous insights from expressions by our consumers — their comments, input on the song that was being created and what they shared with their networks.

So what are the keys to winning in this new era of empowered, engaged and networked consumers? Here are some of the top “expression” lessons we’ve learned so far:

Accept that consumers can generate more messages than you ever could. Don’t fight this wave of expression. Feed it with content that touches consumers’ passion points like sports, music and popular culture. We estimate on YouTube there are about 146 million views of content related to Coca-Cola. However, only 26 million views were of content that we created. The other 120 million views were of content created by others. We can’t match the volume of our consumers’ creative output, but we can spark it with the right type of content.

Develop content that is “Liquid and Linked.” Liquid content is creative work that is so compelling, authentic and culturally relevant that it can flow through any medium. Liquid content includes emotionally compelling stories that quickly become pervasive. Similarly, “linked” content is content that is linked to our brand strategies and our business objectives. No matter where consumers encounter it, linked content supports our overall strategy. When content is both “Liquid and Linked,” it generates consumer expressions and has the potential to scale quickly. An example of “Liquid and Linked” was our FIFA 2010 World Cup program, which was the largest-ever Coca-Cola activation in history. More than 160 countries used a common World Cup Visual Identity System, a pool of television commercials, and a common a digital platform. All were linked by the common thread of celebration.

Accept that you don’t own your brands; your consumers do. Coca-Cola first learned this lesson in 1985 with the introduction of New Coke, but it’s become even more important with the growth of social media. As I write this, Coca-Cola’s Facebook page has more than 25 million likes (fans). Our fanpage wasn’t started by an employee at our headquarters in Atlanta. Instead, it was launched by two consumers in Los Angeles as an authentic expression of how they felt about Coca-Cola. A decade ago, a company like ours would have sent a “cease and desist” letter from our lawyer. Instead, we’ve partnered with them to create new content, and our Facebook page is growing by about 100,000 fans every week.

Build a process that shares successes and failures quickly throughout your company.Increasing consumer expressions requires many experiments, and some will fail. Build a pipeline so you can quickly replicate your successes in other markets and share the lessons from any failures. For example, our “Happiness Machine” video was a hit on YouTube so we turned it into a TV commercial, and we’ve replicated that low-cost, viral concept in other markets.
Be a facilitator who manages communities, not a director who tries to control them. In 2009, we launched Expedition 206. Consumers voted for the three people they wanted to see travel the world as Coca-Cola Ambassadors, visiting most of the 206 countries where Coca Cola is sold and driving an online conversation about what makes people happy around the world. On every step of their 273,000 mile journey, the ambassadors blogged and created all the content. Our role was to facilitate their journey, which was no small task. We had to give up control of the content, so our ambassadors could share their own experiences. In an era of consumer expressions, seek to facilitate and participate with communities, not control them.

Speak up to set the record straight, but give your fans a chance to do so first. Of course, not every consumer expression will be positive. You have to be part of the conversation so you can set the record straight when you need to. Even better, we’ve found that our fans make online communities self-policing. When our Facebook site was targeted by an activist group whose members posted negative messages, our fans responded with messages of support for our company, and our fans challenged the use of the community for activist purposes.

Marketing has changed dramatically since Doc Pemberton poured the world’s first glass of Coca-Cola in 1886. On May 8th, 2011, Coca-Cola and our fans around the world will celebrate our 125th anniversary. While I’ll be curious how many impressions our activities generate, I will look most closely to the expressions of our consumers as a better measure of our success in keeping the world’s most valuable brand relevant for the next 125 years.

Joe Tripodi leads global marketing, customer management and commercial leadership as Executive Vice President and Chief Marketing and Commercial Officer of the Coca-Cola Company.

CMOs Struggling To Keep Up With The Digital Revolution | THE SOCIAL CMO Blog

CMOs Struggling To Keep Up With The Digital Revolution | THE SOCIAL CMO Blog.

Great Stuff from The Social CMO

October 17th, 2011 · No Comments · All PostsSteveOlenski

In a wide-ranging survey of more than 1,700 chief marketing officers from 64 countries and 19 industries, IBM’s 2011 Global CMO Study revealed that a large portion of CMOs, while excited at all the changes happening in the marketplace – are ill-equipped to deal with and manage it. 

Back in July I shared with you the results of the State of Marketing Report from the Chief Marketing Officer (CMO) Council which revealed that “Social Media And Integration is Chief Among Marketers’ Priorities.” Then in September it was the results of a study conducted by Duke University’s Fuqua School of Business that showed that “CMO’s To Increase Spending On Social Media But Integration Still Lacking.”

And today I want to share some of the results of the aforementioned IBM 2011 Global CMO Study which revealed four (4) key challenges that CMOs feel unprepared to manage:

  1. The explosion of data. It goes without saying we are ALL swimming in a sea of data. It’s all around us and the key will be not only managing all of it but measuring it and gleaning

    the right information from it. Yes the operative word is “right.” One CMO survey put it very bluntly “At this moment, I don’t know how our marketing department will cope with the expected data explosion.”

  1. The social media revolution. As the aforementioned previous surveys/studies indicated, CMOs recognize the importance of social media, however, as one CMO put it “The risk is huge, whether you touch it or not. Don’t make the mistake of thinking you reduce the risk by not trying to manage it.” That last line should scream at every CMO: Never make the fatal, yes fatal, mistake of assuming you are reducing the risk by deciding not to manage social media.
  2. The proliferation of channels and devices. Consumers are continually inundated with advertising and marketing messages just as they are continually seeking the latest device to theoretically make their life easier. From mobile phones to tablets to whatever comes next, marketers need to always stay on top of the ever-changing technological landscape.
  3. The ever-shifting demographics of consumers. 63% & 37%. That’s the difference between the number of CMOs who believe a shift in consumer demographics will have a significant impact on their marketing functions and decsions and. the number of CMOs who believe they are either substantially or fully prepared to handle this shift in the first place. As one CMO put it “A new generation with totally different needs and consumption habits is coming. Companies will have to adapt to this change in order to survive in the marketplace.”

In terms of areas of improvement, the majority of CMOS indentified three (3) key areas to improve upon:

  1. Customers are empowered and we need to deliver value to them. “If CMOs are to understand and provide value to empowered customers and citizens, they will have to concentrate on getting to know individuals as well as markets. They will also have to invest in new technologies and advanced analytics to get a better grasp of how individual customers behave.”
  2. Create customers for life. “To effectively cultivate meaningful relationships with their customers, CMOs will have to connect with them in ways their customers perceive as valuable. This entails engaging with customers throughout the entire customer lifecycle, building online and offline communities of interest and collaborating with the rest of the C-suite to fuse the internal and external faces of the enterprise.”
  3. Measurement, ROI and self-improvement. “CMOs will have to quantify and analyze the financial results of their marketing initiatives and communicate them to the wider organization to enhance the marketing function’s credibility and effectiveness. They also will have to inject new skills into the marketing function by expanding the digital, analytical and financial capabilities of existing employees and by hiring staff or by partnering with specialists to fill the gaps. And since it’s important to lead by example, CMOs will need to invest in enhancing their own expertise in these areas as well.”

    Although it would appear from the survey that many CMOs need to be more congizant and take more seriously their lack of skills for when asked to name which attributes they personally need to be improve upon only 28% said technological competence, 25% identified social media and 16% said financial acumen. Those are some pretty telling numbers boys and girls, especially the first two. The last one perhaps you can chalk up to their belief that that’s what a CFO is for but the first two? Maybe it’s just me but shouldn’t that be part of their job?

Most CMOs pay more attention to markets than individuals.

That’s a line directly from the survey findings and I wanted to use it verbatim here because it is extremely disconcerting as this chart below…

  • 26% of CMOs track blogs
  • 42% track 3rd party reviews
  • 48% track consumer reviews to use as part of their marketing strategy

I have to tell you those statistics blow me away. On one hand you have CMOs telling us how important social media is and how vital it is to engage with your customers, to theoretically hear what they have to say yet on the other hand you have these CMOs telling us that they place more priority on the “impersonal” factors. I am not saying these “impersonal” factors are not important… they are. But you should not have to sacrifice one for the other. “… blogs, consumer reviews and third-party reviews disclose what discrete customers want. They provide a rich source of information about customer sentiment, with context, that can help companies more accurately predict demand patterns.”

Carolyn Heller Baird, CRM research lead for the IBM Institute for Business Value and global director of the study, thinks CMOs are suffering from tunnel vision when it comes to traditional marketing vs. digital: “They’re (CMOs) still very focused on traditional market sources and less focused on digital sources and they could be looking at what people are thinking. We think this is something they need to pay a lot more attention to. What that requires is a shift of priorities and investment. They’re kind of in the middle of that transformation now.”

There’s a wealth of information to be gleaned from the survey findings and I highly recommend you reading it, however I want to share one more line fro the findings…

“The most effective CMOs focus on getting to know individuals, not just markets. They mine new digital information sources. And they use customer analytics to turn data into insights on which their organizations can act.”

I would add to this that the most effective CMOs identifiy not just his/her marketing department core strengths but also their weaknesses. To paraphrase Dirty Harry “A man (or woman) has to know their limitations.” Translation: Work with outside agencies who can help you with those weaknesses and help you meet those challenges head on and help you be ultimately successful.

Sounds easy yet why do I think so many CMOs  - be they from the B2B Marketing or B2C Marketing side of the fence, won’t get it?

Steve Olenski

Source: IBM 2011 Global CMO Study

Is the Click Still King? (Source: e-marketer)

Online marketing has been touted for its measurability, a quality that should make it easy for marketers to determine effectiveness and value for money. Despite widespread recognition that the click-through does not measure the full effect of an online ad—even ones placed with direct response objectives—and calls for better branding metrics, many marketers still rely on the easy-to-track click as their top performance metric.

A March 2010 survey by Chief Marketer showed the click remained on top, with 60% of US marketers reporting they measured performance in click-throughs. Fewer than two-fifths measured overall return on investment (ROI).

Metrics Used by US Marketers to Measure Interactive Marketing Performance, March 2010 (% of respondents)

Those responses were similar to the 2009 edition of the same survey, and Chief Marketer suggested respondents were sticking with “old-school metrics” while playing lip service to the importance of ROI.

Similarly, Collective Media reported that in February 2010, click-throughs were the most common measurement of ad network performance, used by 64% of responding advertisers.

Datran Media found in December 2009 that marketers worldwide considered conversions the most important success metric, with nearly 90% saying it was “very important.” Click-throughs were rated important by 56.7% of respondents. But when Datran asked what types of measurement marketers actually used, clicks came out on top, with 72% of respondents tracking them.

These measurement practices left one-quarter of respondents to the Chief Marketer survey unsure whether interactive campaigns produced greater ROI than traditional marketing efforts.

The CMO Council’s “State of Marketing” survey did not ask about click-throughs specifically, but found marketers worldwide were most likely to measure their campaigns through page views, registrations, and the volume and origin of site traffic.

Methods Used by Marketers Worldwide to Measure the Effectiveness of Online Marketing/Advertising Campaigns, 2010 (% of respondents)

Asked about their online marketing performance measurement ability, the plurality of respondents to that survey (44%) were either working on increasing their capabilities or “struggling” to put a value on their interactive spending.

“Marketers’ familiarity with clicks is only one factor that contributes to its continued usage as the top metric,” said David Hallerman, senior analyst at eMarketer. “Click are easy to count, too, and therefore an inexpensive metric to gather.

“In contrast,” Mr. Hallerman said, “measuring either brand effectiveness or the indirect effects of online ads—such as how display ads contribute to search clicks—is more complex and typically costs more to accomplish that just tallying up clicks.