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Congreso AMAI 2009
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Confidential & Proprietary • Copyright © 2009 The Nielsen Company
Investing to Grow:
How Nielsen can Help Clients Maximize Return
on their Investments
September 9, 2009
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
Confidentiality StatusPage 2
We live in a fragmented marketing world…
Multiple Screens: Internet, Mobile
Numerous TV Channels: including Digital TV
More ways to reach & target consumer!!
Manufacturers are working harder than ever to influence
consumer choice, and reach them in multiple ways…
Questions often asked in this context are:
•How do I stretch my budget to maximize returns?
•Given the new media reality, does traditional advertising still work?
•Should I continue to invest in media, or focus more on promotions?
•Does Digital media work? Should I replace traditional media for Digital?
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
Confidentiality StatusPage 3
Clients utilize Nielsen’s Marketing ROI Solutions Framework to grow profitably while addressing marketing fragmentation.
Measure the impact & ROI
of marketing spending
through Marketing Mix
Models & Analysis
Evaluate impact
compared to norms
and maximum
potential
Recommend
improved execution &
investment
strategy to grow.
Implement strategy.
Track execution and
impact of new marketing
plan
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
Confidentiality StatusPage 4
Nielsen Marketing ROI Solutions encompass the store, the market and the consumer.
Measure store-level marketing
response by using store-level
data
Integrate market-level trends &
differences
Understand consumer-level
response to marketing
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
Confidentiality StatusPage 5
Model measurements are used in a holistic framework to improve ROI.
Category Dynamics
Portfolio Management Rules
CompetitiveScenario
BrandObjectives
Marketing Mix Principles:Based on measurement & norms
Brand objectives should be considered. Example: small or new brands with the potential to be large brands require large investment but may have low ROIs initially.
Consider competitive dynamics (share of voice, level of category promotion, need to retain shelf space) when setting budgets.
Take into account the role of the category : is the category stagnant or growing? Is there down-shifting in the category? Is it impacted by the economy?
Build a Portfolio Management discipline by understanding how the investment of one business impacts the portfolio investment.
What works best? What do we know from norms? Note that differences in the size of the business, purchase frequency, penetration, and brand share can drive ROI differences.
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
Confidentiality StatusPage 6
From Total ROI to Consumer Insights: The Nielsen
Advantage
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
Confidentiality StatusPage 7
Consumers respond differentially to marketing: Nielsen models measure this difference.• Besides “national” ROI metrics, Nielsen also provides “consumer” ROIs
• Consumer groups based on AMAI survey results
BehaviorScape Framework
Social-Economic Level
BehaviorStage A/B C D+ D/E
New Family
FHHs <40 and Oldest Child <6 0.4% 3.0% 3.1% 5.2%
Young Family
FHHs <40 and Oldest Child 6-11 0.6% 3.8% 4.3% 6.3%
Family with Teens
FHHs <40 and Oldest Child 12+ 0.6% 4.1% 4.5% 6.3%
Established Family
FHHs 40-49 with Any Kids 1.1.% 5.6% 5.4% 5.8%
Mature Family
FHHs 50+ with Any Kids 0.7% 3.0% 4.0% 4.3%
Young Couple
FHHs <45 No Kids 0.4% 2.2% 2.4% 2.5%
Mature Couple
FHHs 45-59 No Kids 0.9% 3.4% 3.9% 3.0%
Senior Couple
FHHs 60+ No Kids 0.8% 2.4% 3.5% 2.6%
Total 5.5% 27.4% 31.0% 36.0%
• A/B Educated
professionals in
modern homes.
Family Income
+$82,000 pesos
• C Educated mid level
business people,
teachers, technicians.
$11,000 to $81,000
pesos
• D+ Less educated
workers, often in
informal commerce.
$6,000 to $10,000
pesos.
• D/E Laborers and
itinerant workers.
Income less than
$6,000 pesos
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
Confidentiality StatusPage 8
Example: Advertising Response by Mexican Lifestyle Segments
1) Measure the “Average Household” ROI = $1.05
2) Quantify differences in ROI using consumer
demographics data
Television Advertising
Response/ROI Summary
Consumption
Index
Response
Index
ROI
Index
TV Advertising ROI
Potential
Lifestyle A/B 115 100 115 $1.21
Lifestyle C 111 83 91 $0.96
Lifestyle D+ 104 52 54 $0.57
Lifestyle D/E 79 148 117 $1.23
Average Household 100 100 100 $1.05
Lifestyle D/E 79 148 117 $1.23
Highest ROI potential for this brand’s TV:
Lifestyle D/E ROI = $1.23 (compared to $1.05 average)
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
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$1.21
$0.93
Lifestyle C Lifestyle A/B
Targeting more responsive consumer segments can increase ROI
Action: Target Lifestyle C Consumers Through Media
TV Shows Online Ads Magazines
Result: Increase in Total Media ROI and Response
What are the media consumption habits of consumers in Lifestyle C?
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
Confidentiality StatusPage 10
Balancing the Short-Term & Long-Term: What We Know from our Research
• Media has a measurable impact on brand penetration both in the current year and the subsequent one.
• Media prevents churn and increases trial, thus leading to true buyer gains (positive longer term effects)– Media has both “re-distribution” and “expansion” benefits.– Going dark on media increases churn and decreases trial.
• Promotion does not impact brand penetration in the longer term.
• Promotions cause both churn and trial, in effect losing buyers on one hand while gaining buyers on the other – Promotions therefore tend to increase price elasticity
• Category actions matter a lot – it’s your share of activities rather than how much you do... – Category promotion rates have more influence on trial &
churn than a brand’s own rates
Impact of Media on
Brand Penetration*
Year One Year Two
Inc
rem
en
tal P
en
etr
ati
on
* Based on US FMCG Study
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
Confidentiality StatusPage 11
Argentina Case Study: The Long-Term Effect of Marketing in Recession
2002 2003 2004 2005 2006
2002 Argentina Background:
• Economic instability, high unemployment•More rationalized purchases• Brand Switching, looking for price-quality benefit•Increased Price Sensitivity•Once the economic stability began, the consumers slowly began to buy again the brands they used to purchase before the crisis
A large FMCG brand continued to spend on media during the recession
While returns were low during the recession, they increased dramatically during the economic recovery, giving the brand a
competitive advantage!!
Media ROI Trends
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
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Increasing Consumer Touch-points: Does Digital Media Work?
130
100
Digital TV
Digital ROI indexed to TV *
* Based on US and EU FMCG Studies
Digital ROI is measured to be 30% higher than TV ROI in FMCG
What drives effectiveness?•Content / Creative•Placement / Website
What drives high ROI?•Effectiveness / Response•Lower cost
What tactics work best?•Email, Paid Search, Broadband advertising•Neither reach nor frequency guarantee success•High click-through does not guarantee high ROI
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
Confidentiality StatusPage 13
Top 5 Things to Remember for your Marketing Budget
1. All consumers not equal in response – understand and target your most
responsive consumers.
2. Brand communication investment is crucial to maintain or increase your user
franchise – promotional activities alone will not achieve this.
3. As the traditional media market fragments, digital technology offers new and
innovative ways to communicate with your consumers in an ever more targeted
way. TV generally dominates as a volume driver, especially for big brands.
4. Digital works best when synergised with other brand activities and is well
targeted – it should be part of a holistic campaign.
5. Make your investments work as hard as possible through maximising both halo
and synergies.
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
Confidentiality StatusPage 14
Realizing Improvements in Marketing ROI: Nielsen Process
Bringing together our experience in…..
- 30+ Countries
- 100+ Brands
- 10+ Years
August 27, 2009 Confidential & Proprietary
Copyright © 2009 The Nielsen Company
Presentation Name or
Confidentiality StatusPage 15
Customized
Models
Models “fit to
purpose”
Right
specification
Right trade-off
between
speed &
flexibility
Expert Analysis
&
Interpretation
Senior Mix
expertise
Integrate
client in
interpretation
Integrate other
research or
data available
Continuous
Application &
Learning
Marketing Mix
a process, not
an event
“Test & Learn”
What-if
scenarios
Meta-
learnings
Nielsen works with clients to create a best-in-class Marketing ROI program.
Right
Program Set
Up
Multi-
functional
participation &
buy-In from all
levels of the
organization
Client
leadership as
sponsors
BIC Marketing
Mix Program
Improvement
in marketing
ROI
Integrated
ROI-based
planning &
decision
making
Confidential & Proprietary • Copyright © 2009 The Nielsen Company
Thank You!!
Questions?