In the old, pre COVID-19 world, marketers could answer most business questions with a degree of confidence, and that confidence came from years of investment in data and analytics.
As COVID-19 mortality and recovery data floods in from various countries informing government guidance, we still don’t know with absolute confidence how things will pan out. The impacts of the pandemic will continue to be felt across consumer behavior and businesses in various ways.
The ‘old rules’ have gone out the window and many marketers have landed in the situation where their finance departments are taking the reins, making marketing decisions.
In this uncertain world, how can marketers find the confidence to make data-informed business decisions that maximize marketing efficiency?
Claudia Sestini, our Global CMO, hosted a fireside chat with two experts at Gain Theory, Karen Kauffman and Shawn O’Neal, to discuss how marketers can use data and analytics insights to navigate with greater certainty in these uncertain times.
To view the full length episode click here or watch the segments and key takeouts below.
- The Role Marketers are Playing Today
- Ensuring Marketing Investments are Not Wasted
- Modeling in A COVID-19 World
- Data and Analytics Available Now
- “Wargaming” with Agent Based Modelling
- Marketing Analytics Modelling in an Uncertain Environment
- Making a Case to Finance for Marketing Investment
- Accounting for Changes in Media Consumption
- Survival Tips for Marketers
The Role Marketers are Playing Today
- Marketers have been investing in data and insight for a long time and that information is more valuable now than ever.
- More than any other department, marketing leaders have the opportunity to lead now, with insights around consumer behaviors and media consumption, for example.
- Take stock of what information is available, using early data and existing insights, to ensure that we are making the right decisions for the business.
- There’s a natural inclination today to cut investment, but there is a smart way to do that.
- Bring that information back to the organization and explain the ‘why’ behind decisions you’re making today.
Ensuring Marketing Investment is Not Wasted
- It’s critical that marketers learn and pivot quickly using the data and analytics available.
- Don’t wait until next year when the dust clears to measure effectiveness. This is the defining moment, between competitive advantage and market share gains, that will be lasting for the future.
- For those marketers who can afford to invest right now, there is a significant opportunity to win market share.
- We’ve seen research that indicates brands and businesses that invest in marketing do well, and often better than their competitors, both during and after recessions.
- Studies suggest that getting new customers to try your product today can have a substantial effect on the business in the long term.
- Reframe how you define success. There is a standard approach for marketers to think about incremental volume, incremental sales, ROI, etc. – but they should also be asking, “How can I gain more share of wallet?” or “How can I gain more share of consideration?”. Those are equally important in today’s time where categories are constricting.
- Think beyond the immediate. We don’t know what the new normal will look like, or when that will take place, but agile scenario planning is essential right now.
- Imagine different worlds and create a variety of different plans that will take advantage of different types of realities.
- Think about what data you can use to infer which direction to take and how you can use that data to pivot marketing strategy and take advantage of what might come.
- In the midst of cost cutting, we can use insights to suggest strategies that produce a higher ROI.
- We’ve already seen substantially reduced costs across digital investments. For example, in April, Facebook cost per million was at 40% and digital on average was down roughly 10%.”
- If you have the data, you can quickly understand and know what’s working and what’s not; you can know the financials behind those strategies and can dramatically change the investment and return you’re going to get.
Modeling in A COVID-19 World
- Understanding the break between pre and post COVID-19 models and the drivers behind that point in time will enable you to better predict the future and you’ll hit a point, this year, where that modeling makes incredible sense.
- In the near term, any techniques that enable you to see and model data as it comes through will help inform you on which tactics are working, as well as what the drivers are now vs. what they were historically.
- Don’t abandon modeling done in the past. There are ways in which we can take existing models and calibrate them to be more reflective of today’s reality.
- Take variables, like changing consumer media behaviors or marketing interactions, and look at the effects on media response or cost.
- Questions like, “Should we model today?” and “Should we refresh an existing model?” require marketers to reframe the business question they need to solve for at that time.
- Don’t generalize variables or outcomes. Consumer behaviors can vary by geography, audience, etc. and there are ways we can build compelling models that allow us to interrogate those.
- Ask the right questions: “Are there ways we can tailor our media strategy to unique geographies as they come back to the new normal?” “Are there audiences that are less price sensitive?” “Are those the ones we should be targeting?” “How can we market to them?”
- Take a step back and ask, “What can I learn today that is applicable to how I manage the business today? And how can I use that to generate new insights that may be more valuable 3, 6, or 12 months from now?”
- It’s a missed opportunity to plan for 2021, post COVID-19, without having done some of the modeling work today to connect the dots between pre, during, and post COVID-19. This will allow for predictions, estimates, and forecasts about what things may look like, given the break in trends and new things that are happening.
Data and Analytics Available Now
- MMM, and marketing analytics in general, have given us a language that works for finance by articulating the return on marketing investment.
- Gain Theory’s Sensor near-term measurement solution looks at the relative investment values for tactics at a granular level. If you’re starting to look post COVID-19 to see what is working and what is not, this kind of analysis works brilliantly for that kind of scenario.
- Scenario planning – i.e. if it goes this well, or that well – gives us different ranges to show the financial impact and business return on your investment. This is a great basis on which to discuss with the finance team low-risk to high-risk investments and potential ROIs.
- MMM and Multi-Touch Attribution have become common approaches today to measure marketing’s impact but there are other solutions relevant to today’s uncertain world.
- Agent Based Modeling, for example, enables “wargaming” in environments that are not certain or in categories that are experiencing a lot of disruption.
- Agent Based Modeling (ABM) “wargaming” has two phases:
- Questioning how a marketplace operates: how consumers make decisions to buy one brand over another brand; differentiate one brand from another; and what influencers drive business decisions. Then, creating a model to help explain and understand that environment.
- Once we have created that environment, we start to see a variety of scenarios to help inform the answers to “What would happen if…?”.For example, in retail, ABM can answer, “What would happen if my main competitor goes out of business; where do those shoppers go and what can I do to pull market incremental share?” For pharmaceutical marketers, ABM can answer, “When we lose a patent, what can happen?” or “What is the role of the doctor and the pharmacist in the decision for a consumer to go out and buy a specific script?”.
- There’s a lot of value in digging deeper on a variety of data resources to understand what is happening today and see how consumers are behaving. This may be through consumer survey data, panel data, receipt data, etc. These can highlight changes in behavior and help determine if you can take advantage of that data. Data exploration is going to be a critical tool for us now and in the future.
Should I Continue Marketing Analytics Modeling Given the Uncertainty?
- You will need to do some form of modeling—maybe not the same “traditional” modeling, however. Modify multiple variables to see how the pre and post COVID-19 models look. It may not be focused as much on your sales, but perhaps on other factors that you’ve modeled against to understand both pre and post COVID-19 to see how those factors are then aligned for sales.
- We’re putting COVID-19 variables into our models for clients, factoring in variables like when announcements are made by state, when people go into quarantine, the number of sicknesses and deaths reported, etc. These variables form a curve of the consumer response to COVID-19. That timing of the consumer response matches up with how people view your business, your brand, your sales—and redefines 2021 when you look at it.
- There is an opportunity for marketers today to take advantage of what is happening. If your competitors have gone dark, there may be an opportunity to take advantage of that by placing the right compelling message in the market to win market share that has opened up.
- If you can generate new trial today, there often is a good chance this behavior will continue when we have returned to a “new normal” if a consumer has had a good experience with your brand.
- The cost of media is at an extreme low. The consumption of media, digital, and TV is also going up significantly, about 10-15%, depending on which channel you’re talking about. You’re paying less to get more in terms of every investment you’re making right now. Even if all you’re doing is just testing, it’s a great time to do so.
Making a Case to Finance for Marketing Investment
- A universal occurrence that we’re finding for companies who are losing revenues, is the need to have finance step in and make some difficult decisions about costs.
- The key is not to fold and go home. The key is to get to the other side of the crisis point.
- Currently, we are still under the crisis point with several economic factors rapidly changing all around us, where finance teams don’t feel comfortable with predicting what the future is going to bring.
- You need to do your homework to find the best ways to (a) understand what is changing; (b) how it is changing; and (c) apply testing in small amounts. Test your ROIs and see if low-cost media buys are more effective than ever.
- Prepare yourself for either the back half or the fourth quarter—or, if your business cycle is longer, for 2021. Focus on a mindset of using the data and the tools we’re describing, along with the ROI language for the finance department. Be ready, when the time is right, to make the next ask, for the next investment, for the next initiative.
- A lot of information is available in the public domain. Many studies have all concluded that marketing during recession leads to better outcomes during and after the recession.
- Put a business case together for the finance team on what is the short-term value and long-term value of advertising and marketing.
- For example, we modeled for one brand—who went off air for several months during a recession—that took 13 months to get back to where they were before going off air.
- If you can, put together the case to explain, not only is there a short-term impact and market share loss from going off air, but there is a longer-term challenge to the business by not advertising. Put that information into financial terms to help it resonate better and make a business case for testing to see what will work today.
- Long-term effectiveness is a capability we are actively developing and measuring. We’re currently working with clients today to measure long-term effectiveness as well as the regular effectiveness for marketing mix models.
Changes in Media Consumption
- Take advantage of the opportunities and silver linings right now. People are spending 10-20 percent more of their time on channels and in places where you can communicate with them. Combine that information with the fact that costs are lower, and it is clear should take advantage of this unique time.
- Digital is truly leapfrogging. This entire COVID-19 consumption pattern is impacting digital at a rate of 3-5x of the rate TV watch is increasing. People are going online, they’re going on mobile and Netflix, but they’re not necessarily watching traditional TV.
- Take this time to be more selective and precise as to who you target and on which channels you spend. Taking the time to be data-informed and invest in this moment may be the most valuable thing you do.
Survival Tips for Marketers
- Don’t throw out the past: it’s still a bridge to where we are today. It is important to understand what is happening during COVID-19, and it starts with the way it was before.
- Use the fast-moving data and information that is available to you today. Keep measuring the trends and consumer habits.
- Test and learn fast. Fail fast. By far, this one of the best environments to test, learn, fail or succeed, and then move on to the next thing. Don’t make big bets. Make smaller bets that you learn from and actively change and evolve month over month on your media mix.
- Think locally: tactically, the United States will vary significantly by geography, and as different markets open up (and maybe close back down) you could take a local approach. This is an important change for organizations with national scale who might usually think from a national marketing perspective.