Kaushansky-Data Driven Marketing

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Automotive Marketing Mix Model – Case Study Moving to Results-Driven Investment! August 4 th 2011

Transcript of Kaushansky-Data Driven Marketing

Automotive Marketing Mix Model – Case Study

Moving to Results-Driven Investment!

August 4th 2011

The Assignment

How can data and analytics be used to make the smartest possible marketing decisions by defining attributable channels, using results to optimize advertising spend and help manage the growth of the business

Approach – Defined KPIs across stages of the purchase funnel to monitor the

progression of prospects and understand linkages between advertising spending and sales volume

Methodology– Developed a marketing mix model to optimize total marketing

investment

Results– Developed 4 models which explain key drivers for each stage of the

marketing funnel, i.e. what drive search, leads, sales…

Discussion Overview

• Objective

• Recommended approach

• Detailed Findings & Implications

• Future Enhancements

• Discussion

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Our Modeling Capability – Moving Data Forward

• Established marketing mix practice with global presence; we thrive on being the strategic partners.

• Recent modeling accomplishments: Sears, Oppenheimer, and Evian Water.

• Our strength is evident by our proximity to large amounts of data and our deep understanding of media planning and buying.

• Experienced network of analytics worldwide. Led by statisticians, researchers, analysts, and strategic planners.

Align Investment

Track 360 Communications

Establish a link to business metrics

Optimize Near Real-time

Marketing Effectiveness System

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Modeling Process

DirectIndirect

Business ImpactOnline and Offline Sales

Sales, Dealerships, Promotions Marketing

Search Volume Display/Social EmergingDigital

Paid Search Impressions

Paid Search Clicks

Brand Awareness

Purchase

Tim

ing

• Our specialty is understanding Online and Offline

AwarenessKPIs

ConsiderationKPIs

PurchaseKPIs

LoyaltyKPIs

EngagementKPIs

We modeled each stage

of the funnel

Analysis Path

Modeling Approach

• We modeled one mid-sized model, since most of our US media was focused on the re-launch

• Aggregated weekly data from multiple online/offline sources

• We used 2009/2010 performance to ensure the learnings are recent and representative

• Total showroom traffic was our main primary performance indicator (KPI)

• To account for each stage of the conversion funnel we developed four econometric models to accommodate US and eventually global communication efforts

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Comprehensive Data Collection

• Defined and aggregated 12+ unique data sources • Including: all media, site engagement, social buzz, and sales activity data

Structured Equation

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= r2 > .87

Yt= α + β1Mt + β2Et + β3St + β4Tt

+ εtY (represents the dependent variable, e.g.,sales)M (media), E (engagement), S (searches), T (store

traffic), etc…

Focused on understanding the impact of marketing communications at five stages of the purchase funnel

Stage KPI*

Awareness Total Brand Search (from Google Insights)

Engagement Model Unique Page Views (from Google Analytics)

Consideration Model Total Leads Activities (from Urban Science)

Purchase (1) Total Model Showroom Traffic (from Manufacturer)

Purchase (2) Unit Sales (from Ward’s Auto)

• National level analysis/data• 41weeks (broadcast weeks 9/13/10 through 6/20/11)• Marketing communications: GRPs, impressions, clicks, dollar spending

* KPIs are: (a) representative of the stage in the purchase funnel, (b) ultimately linked to purchase behavior and (c) we understand how to affect

variation9

Stage

Awareness

Engagement

Consideration

Purchase (1)

Purchase (2)

Working our way up the funnel

Hierarchical Modeling was used to Assess Impact at Each Stage

Four Independent Models

Strong Existing Correlation

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Detailed Findings & Implications

Total Brand Google Searches

• TV is with branded Display are a primary driver of Google search (natural search volume)

• Over 11% contribution but with diminishing returns with higher spend

• So how do consumer initiated searches contribute to site traffic?

Stage

Awareness

Engagement

Consideration

Purchase (1)

Purchase (2)

40434

40448

40462

40476

40490

40504

40518

40532

40546

40560

40574

40588

40602

40616

40630

40644

40658

40672

40686

40700

40714

505560657075808590

Estimate Actual

40434

40448

40462

40476

40490

40504

40518

40532

40546

40560

40574

40588

40602

40616

40630

40644

40658

40672

40686

40700

40714

0

20

40

60

80

100

Base TV Display

88%

11%1%

Contribution

Base

TV

Display

12

Model explains 86% of variation in Total Leads

Unique Page Views

• TV aligned with Display Clicks are key drivers of Unique Pages

• Display ads and natural search contribute almost 60% of all unique page views; YouTube’s augmented reality drove a significant spike in March

• So how do pageviews contribute to online leads?

Stage

Awareness

Engagement

Consideration

Purchase (1)

Purchase (2)

9/13

/201

0

10/3

/201

0

10/2

3/20

10

11/1

2/20

10

12/2

/201

0

12/2

2/20

10

1/11

/201

1

1/31

/201

1

2/20

/201

1

3/12

/201

1

4/1/

2011

4/21

/201

1

5/11

/201

1

5/31

/201

1

6/20

/201

10

20,00040,00060,00080,000

100,000120,000140,000160,000

Actual Predicted

14%

25%

34%

27%

Contribution

TV

Tier1 Display

Search

Base

9/13

/201

0

10/4

/201

0

10/2

5/20

10

11/1

5/20

10

12/6

/201

0

12/2

7/20

10

1/17

/201

1

2/7/

2011

2/28

/201

1

3/21

/201

1

4/11

/201

1

5/2/

2011

5/23

/201

1

6/13

/201

1

TV Display Search Base

Pag

e V

iew

s

YouTube Masthead

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Model explains 98% of variation in Total Leads

Online Leads

• Google searches/visits & TV are primary drivers of Total Leads• Google searches lead to page views and represent 65% of contribution, a function

of its role in online exploration of cars

• So how do leads contribute to showroom traffic?

Stage

Awareness

Engagement

Consideration

Purchase (1)

Purchase (2)

9/13

/201

0

10/2

/201

0

10/2

1/20

10

11/9

/201

0

11/2

8/20

10

12/1

7/20

10

1/5/

2011

1/24

/201

1

2/12

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1

3/3/

2011

3/22

/201

1

4/10

/201

1

4/29

/201

1

5/18

/201

1

6/6/

2011

0

200

400

600

Estimate Actual

To

tal

Lea

d A

ctiv

itie

s

15%

20%65%

Contribution

Base

S60 TV

S60 Search

9/13

/201

0

9/27

/201

0

10/1

1/20

10

10/2

5/20

10

11/8

/201

0

11/2

2/20

10

12/6

/201

0

12/2

0/20

10

1/3/

2011

1/17

/201

1

1/31

/201

1

2/14

/201

1

2/28

/201

1

3/14

/201

1

3/28

/201

1

4/11

/201

1

4/25

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1

5/9/

2011

5/23

/201

1

6/6/

2011

6/20

/201

10

100

200

300

400

500

600

700

Base S60 TV S60 Search

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Model explains 90% of variation in Total Leads

Showroom Traffic

• Online Leads and TV GRPs are primary drivers of Showroom Traffic and TV is a key driver of Online Leads, which includes: Configuration, quick-quote, test-drive, and 3rd party leads

• So how does showroom traffic contribute to sales?

Stage

Awareness

Engagement

Consideration

Purchase (1)

Purchase (2)

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Model explains 90% of variation in Total Leads

Showroom Traffica Useful Proxy for Unit Sales

Stage

Awareness

Engagement

Consideration

Purchase (1)

Purchase (2)

• Advertising drives showroom traffic• Model showroom traffic as success criterion• Unit sales ultimately tie to product availability, price, other

non-advertising factors

1/1/

2010

2/1/

2010

3/1/

2010

4/1/

2010

5/1/

2010

6/1/

2010

7/1/

2010

8/1/

2010

9/1/

2010

10/1

/201

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11/1

/201

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12/1

/201

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1/1/

2011

2/1/

2011

3/1/

2011

4/1/

2011

5/1/

2011

6/1/

2011

2400

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2800

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raff

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Topline conclusions

• The hypothesized purchase funnel is supported by this analysis. Tight linkage exists between each of the stages and ultimately showroom traffic.

• The impact of TV is strong and present throughout each stage of the funnel.

• Other media work with TV exerting disproportionate influence at different stages of the funnel.

• A strong statistical correlation is seen to sales as a result of cumulative media impact.

Awareness

Engagement

Consideration

Purchase (1)

Purchase (2)

TV

Display

Searches

Online Leads

Total Showroom Traffic

Unit Sales

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Implications for Investment

• TV is a consistent driver of search volume, due to search’s important impact on total online leads – continue to invest

• Online Display is a proven awareness driver and influencer of search activity resulting in site traffic activity, most effective when in conjunction with TV is most effective – invest and align with TV

• Media’s impact lasts 3-4 weeks before it loses most of its effect – going dark with media may cost more to recapture share

• Online leads supported by TV and searches, leads drive showroom traffic – ensure search budgets are proportional to TV investment and align creative as needed

• Planning implication: maintaining a continuous mix of TV & online display remains essential for a steady flow of showroom traffic

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Attribution

• Strong brand equity results in high 88% top-level brand search

• Display Ads contributes 26% and paid search 34% to site traffic

• Paid search contributes to 65% of the online leads, TV adding another 20%

• Online leads are responsible for 16% of showroom traffic with TV adding a 5% contribution;

• Showroom traffic has a 0.88 R-squared correlation to sales

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14%

25%

34%

27%

Site Traffic

TV

Tier1 Display

Search

Base

15%

20%65%

Leads

Base

S60 TV

S60 Search

Spending Optimization Tool

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• Budget Planning and Scenario Optimization Tool

• To aid in the planning process, the model equations were coded into a tool to provide scenario and budget planning

• Run unlimited number of scenarios to set budgets by channel

Next Steps and Future Enhancements

• Control for competitive and external influences (e.g. economy)

• Evaluate further impact .COM and 3rd party site engagement

• Include granular sales data (e.g. sales, profit)

• Test synergy between all channels

• Consider other auto models

• Deployment strategy

• Integrating data into planning decisions (e.g. next dollar invested)

• Socialization of data-driven direction

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Thank you

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Discussion

• Today we’ve given you a first look at how we would approach the big picture question using modeling

• Havas Digital Analytics’ rigor and 360° approach to communications modeling ultimately provides more-usable outputs (offline/online +retail +competitive)

• We believe:

• Analytics are best done by our strategic brand/media owners given our deep brand understanding and local ability to respond in real-time

• The best multi-market analytic systems combine local market intelligence and interpretation with a shared global platform

• Next steps:

• Further analyses can be developed pending your further direction

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