We are in an unprecedented time of change and now more than ever need to work collaboratively to create solutions that help sustain business and the economy. As we progress through the next few months, bracing a new normal will become our new normal.
As marketers, you will have questions such as ‘will my brand survive?’ and ‘what can I do in the short term to protect my brand and then help it recover in the longer term’.
At Gain Theory, we are accustomed to using data to model uncertain scenarios, both in the long and short term. Many of the techniques used to forecast future impacts of marketing and media do not necessarily apply in this uncertain world. Whereas techniques such as Agent Based Modelling, currently used by governments to understand the impact of Covid-19, can also be used to help brands such as yours.
There are many ways in which to support decision making using data in an uncertain world.
To help guide you through this challenging time we are opening a brand-side marketer’s ‘helpline’ offering complimentary 30-minute Q&A sessions with our experts who will answer any questions you may have.
To join the sessions please email email@example.com.
In the meantime, if you’re just looking for decision making inspiration during these uncertain times, we’ve curated some quick reads below from our Marketing Measurement and Optimization experts to help stimulate your thinking and get you on your feet.
We will be publishing more articles to support you in making the right decisions over the coming months as the global situation develops.
Simulating Consumer ‘New Normal’ Behaviour to Answer ‘What if..?’
Classical economic theory assumes that individuals are rational. However, in the real world, we often see irrational behavior. In times of crisis even more so. Simulating potential consumer behaviours in the face of change can help brands with strategic planning and war gaming in the face of:
- Demographic changes e.g. the implications of a younger or ageing population
- Cultural changes e.g. recreational shifts from one activity to another
- Competitive changes e.g. the emergence of new or alternative brands
One leading global brand approached Gain theory with a burning question:
What are the conditions that lead to seismic shifts in our market in which one category starts to grow and take share from others? Also, how can these shifts be anticipated in the future to give us a competitive advantage?
Our experts applied Agent Based Modelling, a simulation that reflects the real-world behaviour of a population. Their findings helped this brand forecast and plan for future market behaviour via:
- Simulation of different trends and quantification of their potential impact on future sales within the market.
- Enhanced understanding of trend drivers and controllable factors.
- Testing of various scenarios and impact of doing nothing, launching a new product development, increasing media spend, or what might happen if the competitor does instead.
- Clear view on the impact of environmental changes such as working patterns shifting.
Brand vs Performance: Where should the Pendulum Swing?
Our experts give a point of view on what proportion of marketing budget should be spent on brand advertising and performance advertising. They examined 3 scenarios:
- Taking a brand off air
- Spending heavily on brand
- Spending heavily on performance
Three scenarios are below or you can read the full article here:
1. Taking a brand off air
If brand spend is cut, there can be a short-term improvement on profitability. However, in the longer term we’ve seen profitability go negative, due to the lost sales outweighing the cut in costs. One client of Gain Theory, a short term $0.4m gain turned into a $1.1m loss. Erosion of brand metrics follows: we’ve seen clients where brand metrics have declined for at least 3 years following a cut of brand advertising. It is then harder and takes longer to recover from this and in that client, we subsequently quantified a negative effect on sales of 20%. So, while this approach can be appealing to hit short term targets, it can be hugely damaging in the long run. This leaves one asking: is it worth it?
2. Spending heavily on brand
Some businesses will invest significantly in brand for a specific purpose, for example to build awareness or tell stories to keep the brand feeling relevant and alive for customers. This type of investment can be a brave decision for marketers without appropriate measurement, as there is unlikely to be an immediate sales result.
One of our clients invests significantly in their brand advertising throughout the year. They view this as crucial to maintaining their strong brand position in the market and place importance on tracking brand metrics to measure its impact. They also see this spend build sales in the long term. To balance out this heavy brand advertising, this client will also pulse with performance campaigns to ensure they are also meeting sales expectations in the short term.
3. Spend heavily on performance
In some clients, we’ve seen a move towards heavily investing in promotions. Unsurprisingly, this shows immediate uplifts in sales and profit. As well as producing seductive metrics, it can also be very attractive from an investment POV. And there’s nothing inherently wrong with that – everyone needs to drive sales. However, taking a longer view, we’ve seen clients where significant spending on price and promotions brought a negative impact on the brand and value for money metrics.
Demand Generation: 9 Golden Rules
Senior Partner, Matthew Chappell gives us a practical best practice campaign measurement guide that will enable businesses to effectively evaluate, learn and grow their media returns.
For the downloadable version click here.
For the video presentation ‘Demand Generation’ click here which covers (a) How to balance trade off decisions (b) 9 golden rules of measurement (c) How Kellogg’s are accelerating analysis.
The 9 Golden Rules:
- Define success. Avoid the Texas sharpshooter fallacy: Painting the target once the shots have been fired.
- Use a level playing field. Treat every channel alike. Think about the metrics used for (a) inputs (b) outputs and (c) outcomes.
- Know your fundamentals across all media channels. Cost per thousand impressions, cost per TVR, viewability, advertising context etc.
- Right methodology, right job. Don’t use partial advanced analytics methods, like digital attribution, for holistic challenges.
- Triangulate. Seek consensus from multiple sources.
- Timely results. Be honest and realistic about what can be delivered.
- Be choosey about metrics. Don’t succumb to death by data.
- Allocate budget towards testing. Don’t optimize into a corner Be prepared to fail and learn.
- Context is important. Context changes so what worked in the past, might not work today. Apply human judgment to assess when this is true… and what to do next.
Avoid Analysis Paralysis
Lindsay Egan, Partner lends her counsel on how to make best use of insights and not fall into analysis paralysis.
Full length article found here.
- Align on ROMI: We often hear that different pockets of the organization have very different definitions of ROMI (Return on Marketing Investment). No one wants 5 different yard sticks to measure success by. Have an open and honest conversation about what the drivers of your business are.
- Hold your team accountable: this involves: clear expectations; clear capability; clear measurement; clear feedback and clear consequences.
- Triangulate Decision-Making: in light of the current climate it is particularly important to look beyond analytics models to understand marketing performance optimization opportunities. Who is the target audience? Is there an opportunity to invest more into specific marketing channels? What additional media is in the market? What will the next 2,4 and 6 weeks look like?
- Partner closely with your analytics teams: give crystal clear direction on what the types of marketing decisions you need to make, when you need to make them and the format you need them in. This will guide your analytics teams on the insights they need to generate and help them figure out the best marketing analytics solutions to deliver.
- Involve your media agency and activation partners early: this will ensure everyone is aligned with coming up with the best solution.