Joined by guest speaker Chris Other, a customer and marketing director with a wealth of experience at major brands like Studio Retail (Frasers Group), Specsavers, and Tesco, Jaywing's experts took to the virtual stage in our latest webinar “How To Navigate Marketing Effectiveness In An Uncertain World”.
Hanna Wade, Strategy Director of Data Science, sets the stage by exploring the current marketing landscape.
Marketing impacts virtually every aspect of a business, from acquiring new customers to re-engaging existing ones, and from fostering brand strength to creating a tolerance for price increases.
In fact, recent research by Ian Whittaker indicates that brand strength has surpassed factors like leadership and reported profit in the eyes of City Analysts when assessing a business's worth. In fact, 89% of analysts view marketing as an investment rather than a cost.
But securing budgets for marketing initiatives is becoming increasingly challenging.
In the face of a cost-of-living crisis, escalating media costs and diminishing brand loyalty, businesses are relentlessly seeking effective growth strategies and want proof of the impact of every pound spent. This isn’t surprising given that only 8% of marketing metrics in the DMA database mirror real business impact figures that CEO’s want to understand.
In this ever-evolving landscape, where all marketing budget must be accounted for, we’ve seen a resurgence of interest in effectiveness, particularly marketing mix modelling, a type of econometrics model, which holistically measures what is truly driving demand. This type of modelling can become a catalyst in a business – providing confidence to make decisions that will impact growth and secure marketing investment.
Hanna Wade explores how marketing teams can foster a culture of effectiveness.
McKinsey estimates that only 10% of Fortune 250 CEOs have marketing experience, highlighting the urgent need for alignment and understanding between marketing and C-suite colleagues.
The key lies in democratising marketing across the business, translating marketing language and metrics into tangible business effects that resonate with leaders. This doesn’t mean that elements such as awareness and reach aren’t important, but unless these can be linked to financial terms, they are perceived as fluffy and not understood.
By aligning teams across marketing, sales, and finance, companies can achieve increased growth in annual revenue, awareness, and overall size, leading to 27% faster profit growth over a year.
Econometrics has supported this democratisation, as it can act as “a mixing desk that the board can huddle around and play with the faders”, as said by Media Strategist, David Grainger.
Matt Triggs, Head of Analysis and Modelling, unpacks how brands can start their effectiveness journey using econometrics.
In an ideal world, all businesses would know exactly what drives their key goals, whether that’s sales, revenue, applications, or even footfall.
They’d be able to understand:
Marketing Mix Modelling, a type of econometrics, answer these question. It can quantify the impacts of internal and external activity on outcomes.
At a simple level, an MMM might assess various marketing channels, promotions, partnerships, and PR efforts. It can then factor in external elements such as macroeconomic conditions, seasonality, or even the impact of events like COVID. However, businesses can elevate this simplicity based on their unique needs. This could involve delving into segments like different product groups, brands, or customer categories.
But before delving into the intricacies of these models, crucial questions need answers:
One thing that the model can’t do is answer questions about things it hasn’t seen. This underscores the importance of involving all stakeholders in the project. Their insights and perspectives ensure the model aligns with the diverse and evolving needs of your business, capturing the unseen nuances that shape success.
Customer and Marketing Director, Chris Other, shares advice on how to drive a culture of effectiveness in your business. Watch the recording to hear the real-life examples from his time at Studio Retail and Tesco on how he’s navigated this in his previous roles.
As a marketing director or leader, your primary responsibility is to propel sales, necessitating both the justification and the allocation of a budget. This task, however, cannot be undertaken in isolation. Building a cohesive team and accessing the right data-driven insights is crucial, and the approach can be divided into three key phases as per Mark Ritson's teachings: diagnosis, strategy, and execution.
Delving into examples from his time at Tesco and Studio Retail, Chris outlines the importance of: