Roundtable – Doing the math

With more decisions to be made about where you put your marcom dollars these days, there’s more to measure when it comes to return on marketing investment (ROMI). And given the impact of influencers and the speed at which programs can be tweaked, there’s also more need for speed to keep up on both attitudinal and actual performance metrics.

With more decisions to be made about where you put your marcom dollars these days, there’s more to measure when it comes to return on marketing investment (ROMI). And given the impact of influencers and the speed at which programs can be tweaked, there’s also more need for speed to keep up on both attitudinal and actual performance metrics.

Kevin Banderk, chief Koodo officer, Koodo Mobile
Shelley Brown, president, Zig
Kevin Edwards, VP marketing, Grand & Toy
Ian Madell, managing director, Level5 Strategic Brand Advisors
Gord Meyer, Household Care business unit director, Procter & Gamble Canada
Martin Rydlo, director of portfolio strategy & initiatives, Campbell Company of Canada
Christine Saunders, SVP group director, Starcom MediaVest Group
Karrie Van Belle, director, Canada marketing, BlackRock Asset Management (iShares)
Annette Warring, president, Genesis Vizeum

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Joan McArthur, Joan McArthur Training & Consulting

Joan McArthur: Has the evolving, conversational nature of marcom changed your ROMI metrics, practices and thinking? If so, how?

Gord Meyer: We’ve always been a company that measures things, but recently we’ve taken more of a global stance. When I first started looking at marketing ROI it would have been more micro, local stuff, but now that we have big global brands, we take a more macro approach. Some localization is okay, but we use a suite of tools so now we can begin to compare; now I can talk to counterparts in Western Europe or in regions of the States, and say ‘okay, what are you trying, and what am I doing, and how can we compare notes?’
So it’s a very different, much more globally collaborative activity than it used to be. Now we’re looking at the literally billions of dollars that we spend on marketing investment to identify the best practices.

McArthur: So you can now measure your measuring against countries that are ostensibly in somewhat the same position.

Meyer: And we can dine off of their best practices. If we’re [wondering] should we try something, perhaps someone else has tried it already, or if we’re entering new space, we’re part of a collaborative network; we can put our toe in the water and measure our way through it, and then we’ll feed that learning into the global system. So it’s a great community effort as opposed to a solitary effort.

McArthur: I read an article today that talked about P&G and Facebook. Already there’s a lot of press around it, and questions.

Meyer: We’re entered into that space. Somebody had to run the first TV commercial, and they don’t work for us anymore, but somewhere we probably have that genetic learning; we have a tendency to want to test and try things.
In Canada, we said we’re going to take our digital spend up significantly, three to 10 times, brands mandated it. We didn’t know what the measurements were at the time, but we measured on the fly and now, just as I was arriving here, I got a BlackBerry message with a suite of tools for our brand managers and measurement insights on what works, what doesn’t, rich vs. video vs. banner ads, how we should test your creative. We’ve created all of that learning in the last three years.

McArthur: What I’m hearing is that it is indeed on the fly, we’re all on the fly, and so measurement tools have to follow suit.

Martin Rydlo: These days you can track anything you want. The ROI piece can become a very theoretical calculation in terms of a percentage.
You start getting to specific initiatives, and we found ourselves going round and round and not really coming up with anything that was actionable. So we’ve taken it down to the objective level. Are ads breaking through? Is our innovation hitting its targets? Are we actually getting the shopper to stop, shop and buy? Those are the three big objectives, and we measure those very actively, in fact every month, which is once again different from when I started at the company four and a half years ago; we’d get an ad tracker six months into the year and 12 months into the year. What are you going to do at that point? You’ve already spent all your money. Now we can adjust it every single month.

McArthur: Those are the overarching measurements, not the tactical measurements.

Rydlo: We’ll literally pull a campaign 24 hours after we get the results in to say it’s not meeting our hurdle rates in terms of breakthrough. The only reason that works, though, is because we have the diagnostic metrics underneath it in our ad tracker, for example, to ask, ‘what’s in fact not working about this?’ Brand linkage isn’t there, it’s not breaking through. In some cases we found the ad working, but the media buy wasn’t quite right so we weren’t getting our fair share of the top 25 shows, and that was impacting the overall breakthrough of the ad.
To me, the diagnostics have to come along with the high-level objectives because otherwise you’re sitting there wondering, what have I actually learned? That’s where I think things have evolved.

McArthur: Just staying with Campbell for a moment, are you getting into social media?

Rydlo: Absolutely. We had our ‘Help Hunger Disappear’ program – one of the first companies in Canada to partner with Facebook – [and we have] over 35,000 friends on there as a result of it. But we don’t measure that specifically in terms of ROI, because to me that ladders up much higher to the communication objective: what kind of awareness to do we want to generate?
Therein lay the challenges of what kind of tool you’re using. Ipsos Ad Tracker will not get to the sensitivities you need to track the social media that’s engaging consumers these days. You need to ask your suppliers to come up with different vehicles to be able to get at those sensitivities you now need. Thirty or 40 years ago, an ad tracker for your TV campaign was sufficient to track 99% of your activity. Now if it captures 60 to 70% of our activity we’re lucky.
We’ve got the ‘Most Valuable Coach’ campaign on Facebook right now, and awareness of the campaign on Ad Tracker is not breaking through. So there’s something going on there, we see it on Google, we see it in what we’re hearing, but we’re not seeing it the way we’re measuring it. And that’s our biggest challenge.

McArthur: It sounds like there’s an element of creativity in measuring now.

Kevin Edwards: We’re trying to change perceptions about who we are and our brand, and so I’m teaching our marketing people to ignore the metrics and value a new set of objectives. Ninety percent of our business comes from B2B, so we have to find a way to translate that valuable brand perception into a margin. We have very sophisticated CRM activity, but if we’re going to see true growth it’s going to come from people’s willingness to associate with our brand.

Meyer: It’s a blend of metrics and creative, because we’re now able to dimensionalize how important creative is to the process, and if anything [metrics] is amplifying how important creative is to the process, because you can put even better numbers to it.
I went online to buy an Apple laptop, and the [customer service] guy asked me, ‘are you watching the Grammys?’ and I said, ‘no, I’m not, why?’ ‘Well, we’re running our new TV copy, and we add staff to our customer service, because when our new ads run we get more orders.’ And I’m thinking, you’re telling me that a new piece of ‘I’m a Mac’ copy drives your order rate up for multi-thousand dollar items?
So I tell my people that they don’t need a measurement system, they just need to know what their orders are when [the ads] run. Your brand creative is as important as the right medium, running 30s or 15s, all those quantitative things.

Shelley Brown: Isn’t one of the points that you’re making really that the best data is the data you already have? Do sales go up every time we run the ad? Hmm, it’s probably a good ad. Too often we’re looking at these intermediary measures, advertising awareness – those are all useful, and we’re going to need them to do the full analysis, but the best measure is your own data.

Edwards: But there are so many people who would tell us it’s not that, it’s something else. There’s always all the other data that’s used to play against that argument.

Rydlo: I have a friend that runs a supplement company, and he knows within a week whether that ad is working or not. He doesn’t need any specific tracking. But when businesses get more complex, that’s the part where we’ve seen the emergence of scorecards and ROI measurement become much more important.
We also have it as a way of validating our decisions and providing the rationale for it. We need it to sell it to our upper management here and even more so in the U.S. The advertising line has become more and more scrutinized, and I think everyone’s experiencing it. There’s always this pressure to cut 25%, and it’s part of the rationale to say ‘well, no, it’s working, here’s what’s happening.’
I think we’ve been driven to it by need more so than necessarily saying it’s nirvana to have an ROI scorecard that’s going to resolve all of our business issues.

McArthur: Christine, what is changing at your end?

Christine Saunders: The challenge is that some of the tools haven’t caught up with landscape that we’re dealing with. With the more formal tools a lot of our clients are using, like marketing mix modelling (MMM), we’re using last year’s data to influence next year’s plans. You’re looking at two-year-old data and the landscape’s completely changed.
And it’s hard to get the level of data in Canada to make a real impact. Canadians don’t want to answer questions, so it’s really hard to get sample size. We recently did, for a smaller client, a cross-media optimization study in the U.S. and Canada; U.S. had robust numbers, all kinds of metrics across all kinds of new media, as well as robust traditional media choices. In Canada we got sample sizes back from television. Great.
And the other challenge is that often, depending on the client again, ROI decisions fall to the youngest marketers in the room, and they can be life preservers for them. No one ended their career by making the choice [based on the fact] that the ROI on this is higher than this.

McArthur: I love that Campbell’s and P&G are talking about right-brain thinking in terms of measurements.

Meyer: It’s a balance. What we learned is that some of the things that have always been true are true, like testing your creative and making sure that you’ve got good ideas that are clear. You can go crazy with all kinds of interactive stuff, but guess what, people don’t always remember what they’ve just been interacting with, or they don’t want to because they’re really on a mission that isn’t really to interact with your business and you’ve just wasted a lot of money on some tool. On the other hand there’s a time to use [and] learn about these new tools, but don’t forget about the rules of the old tools.
And we make sure trade is in the mix. Sometimes for brands the biggest insight is, if I could just get more display compliance when I do run my trade events, that’s the biggest ROI lift I can get, and that shouldn’t cost me any money, that’s just better execution of what I’m already doing.
Then the other thing is retailers are starting to buy these tools, and whereas you used to have a debate with retailers about what to do, now more and more, optimistically, we’re seeing the ability to say ‘okay, let’s together pick the best mutual ROI tool as opposed to you trying to sell me something that seems like a good ROI for you and lousy for me and vice versa.’
So now we’re using a common language to talk about what can be affecting one part of the business so that we can let all our stakeholders know we’re spending all the pennies and not just the TV or classic marketing money vs. the trade money. It’s one big pool now as opposed to two conflicting pools.

Kevin Banderk: We take a ‘let’s try and fail and if we fail, fail fast’ approach to new media, because I’d say existing metrics are great for existing solutions, but with new media you’ve got to try stuff out. We’ve experimented with a few things, some worked very well. Our most recent one was probably our biggest success; we launched a YouTube game called ‘Sugar Streak.’ In less than two months we had over 1.2 million video hits and about 350,000 channel views, mostly in Canada.
But we don’t look at social media as the only avenue. When we started we needed to be all about awareness so we obliterated OOH. It’s an awareness media.
I would say too often the metrics make people say, ‘oh this group hates our message!’ And they take that as a bad thing. Early on we made it onto a lot of the most loved and the most hated advertising lists simultaneously.A lot of companies try to appeal to everyone, they don’t want (anyone) to dislike them, and you can have all the measures in the world, and you can have all the right media, and it’s still not going to do anything unless the creative has made an impact.

McArthur: I’m wondering if ROI is the new creative in terms of combining the hard metrics and tracking that have always been in place with some instinct, some reading between the lines, some looking at trends.

Madell: When we’re talking to clients, generally the finance department calls us in and says ‘these marketing guys are spending tens of millions of dollars, what’s going on here?’ As an ex-marketer that’s a very uncomfortable conversation to have.
So our observations are a couple things. One is that if the focus is purely on ROMI, it’s too short-term. But there’s also the long-term, which is brand equity. With new accounting policies you can measure the financial value of a brand, we can see where the drivers are, so that organizations put their resources against driving that value. But that’s longer-term thinking. You need to have a perspective that the brand is a business system and an asset.
In our experience, when CFOs get the value of a brand, all of a sudden the brand thing is on their job description, not the marketing guy’s. The CEO is the master of the brand, not the marketing department. That’s where organizations are starting to go.
We had a client that said the marketing guys aren’t doing a good job in clearly articulating what the objective of the spend is; in other words, are we building brand equity or are we building to get the short-term pull? We have to do both of those things, and strategically figure out where the emphasis is going to be.
So now we’re working with [the client] to develop a dashboard as opposed to a scorecard, because a dashboard is actually trying to look at the future. ROMI tends to be just the past, and it’s not enough. ROMI is a good thing to do, but the dashboard looks at the value of the brand and the brand equity, and then you can get a much more fulsome conversation.

Edwards: I’ve got a president who’s visionary, but he came from finance. I made a point to him one day that ROI is kind of what anchors us, but it’s also that anchor around our necks, and he gets that. I’m lucky with respect to that, because as you’re trying to change a 128-year-old company, you need that kind of vision; you need to sometimes just say there are other objectives here that we will eventually see translate.

Ian Madell: The guys in the CEO chair, right now the trend is that they’re more finance guys. So the whole ROMI thing gets heated up even more because they’re comfortable in that world. So brand equity becomes even more important, and you can start to quantify it now and do something about it.

Karrie Van Belle: Where companies need to get to, and I think we’ve been very successful, is having marketing right at the table, setting the business objectives. So I’m not just looking at brand awareness targets, I’m looking at what net new assets we are driving to bring in the door, and that’s going to influence, along with the ROI measurements that we’re doing, how we’re going to market to our target audience. You just need to get at that table.

Annette Warring: Coming from the agency side, we’re rooted in measurement originally. So we have a huge direct response unit and all clients measure DR campaigns. [And we] used to or still do brand tracking for a lot of our clients, top-line brand measurements like awareness, advertising. We follow propensity.
We’ve realized that we can do all that and look at business results, but at the end of the day it still has that intangible that is people. We can measure the impact of pretty much everything, but where we’re taking measurement as an agency is understanding more what it means for our consumers. How is what we’re doing impacting consumer behaviours and attitudes towards the brands?
It’s not as easy as an ROI scorecard, but we think unless we invest in that kind of research and measurement, we’re not going to be able to help our clients plan forward. It used to be so numbers-driven, and now we’re getting into the softer, human measurements.

McArthur: Are people getting distracted from measuring sales?

Meyer: Dick Currie was the chair of Loblaw when they were starting up PC Financial. They were partnering with CIBC, and CIBC was saying, ‘we’ve never seen such a large customer acquisition at such a pace,’ and Currie’s comment was, ‘we didn’t measure it that way; we only measured a customer acquired if they deposited their paycheque.’
You try to find the measures that are catalytic. If I’m trying to get that person to sign up to my bank, I better do something more, because awareness alone might only get me people that are going for PC points, and not somebody that I can make mortgage money from, that’s the real money. Then you’re entering new territory.

Rydlo: The business objective can always come down to volume. What is the key driver of that volume? In the case of our cooking business, it’s all about recipe dissemination. Three years ago we were not measuring recipe dissemination; now we are taking a look at how we drive it in any shape or form – interactive, print, in-store, you name it.
Look at your objectives that are most closely linked to your volume and take it from there. And the rest, they’re diagnostics, in terms of helping you fine-tune.

Madell: I find it ironic that the finance guys really want to know how the marketing dollars are spent, but if it’s the same finance guy at an oil company, they’re willing to let an engineer spend billions of dollars placing certain bets. If you don’t allow people to experiment, you’re probably going to erode the value of the brand.

Banderk: When we do a marketing campaign we usually have a test market that we leave out, and we measure sales in that market without the campaign. It’s needed to say, ‘did this work.’ Because there are too many factors.
It could be nothing that you did, it could be market, it could be industry, it could be your competitor went out and dropped the price
10 bucks. So I love the idea of brand equity, and we probably should figure out how to establish better metrics on that. But the ROI should be more about how to get better and continuously improve than it is about a direct line of sight.

Rydlo: One thing we’re just rolling out right now is, where before we had one scorecard to try and measure everything, we’ve more actively said there’s a consumer that consumes our products, and there is a shopper that goes in and actually shops for our stuff. And that has actually given us inroads into looking at long-term, into what the consumer is doing, not only what’s based on purchase intent but brand equity, a huge lead indicator.
But then we have the shopper scorecard, which is telling us exactly what kind of ROI we’re getting on specific initiatives literally six weeks later and then analyzing the numbers. And we’ve seen the marketing department completely think differently around how they allocate dollars.
Where before it was, ‘I’m going to do a promotion.’ What kind of promo? ‘I’m not sure.’ How is it going to impact revenue? ‘I’m not quite sure.’ To ‘let’s do a promo focused on the shopper, and let’s do it with a specific account and see how that resonates, because that account has a huge database and a huge website presence and we can now have a Facebook program online that links into the website.’ And all of a sudden you’re starting to see the returns, whereas before it would have been intangible.
So for us that consumer/shopper perspective has helped us alleviate some of the stresses that exist out there in terms of marketing and what you’re really focusing on. We’re focusing on both longer-term and shorter-term issues.

McArthur: Now that this boom in the need for ROI is in the air, are people coming to you with all kinds of nifty new tools?

Saunders: There are also a lot of tools in the U.S. that are very hard to transfer in this market. We get the shiny presentations with the fun graphics and then you dig a little deeper and there’s not a lot of substance behind it, or it doesn’t work in this market, we just don’t have the volume or the tools to make it come to life. So there’s a lot of different distractions out there.

Banderk: The better thing is there’s lots of free stuff: there’s Google analytics, there’s Twitter; every day, one of the first things I do is search Koodo on Twitter. It’s real-time feedback that you can tweak. But one of the things we haven’t figured out how to do is to programmatically look at all of that information, put some radar around it, and that’s what the next step for the metrics is going to come from. But if you want instantaneous feedback, we have it, more than you can ever want.

Carey Toane: With that instantaneous feedback, are you doing more regular comparison with other regions or countries?

Meyer: The best example for us has been in digital because we stuck our chin out first. So that was an area that we just kind of said, the eyeballs are there, we’ll just figure out how to get the eyeballs interacting and caring about what we’re saying.

Madell: Was there any catalyst that drove you to do it?

Meyer: We’re a good market in terms of high-speed [internet], and Canadians are very engaged, so we had all that data. And then it was a leader who said ‘I’ve seen this before,’ and trying to compensate for the rearview mirror, because if we keep following all this great data, then 100% of our media budget will be on TV, and that’s not where 100% of the consumers are. It’s just the fundamental principle it’s always been in our business, which is go where the consumers are. That’s what we’re paid for.
That was our contribution to the rest of the world, and the rest of the world catches up quickly. It wasn’t 12 months before we were getting as much as we were giving.

Toane: Within your global organizations, where Canada stand in terms of innovation, execution in this area, relative to other markets?

Rydlo: I’m not sure I can speak to innovation as such, albeit we put a lot more focus around tracking than even the U.S. does. The part where I think we are really ahead is actually having a monthly review of our key scorecard metrics that we’ve all aligned to as a company. We have an update from Ipsos, an update from AC Nielsen, it gets plugged into the scorecard, and our agencies sit there, we sit there, we share it with our upper management.
We shared that at a conference down in the U.S. back in September, and they just looked at us, because they never brought all the different parts together.
The really big difference is it’s actually from within that the new tools and innovation is coming at Campbell. I lead a planning team, a cross-functional group, and we review that scorecard once a month, that’s where we’re getting the ROI.
I literally had the finance guy yesterday say, ‘what if we front-loaded all of our marketing investments to the first three quarters so we still have a reserve in the back end, but at least that way you are going to
have the results in four months after the campaign starts, so we can figure out what we’re going to do with that.’ This is the finance guy saying this, so I think that’s a result of the innovation from within. That’s where the magic really happens; it’s not the shiny box that a third-party supplier comes in.

McArthur: There’s been a lot of conversation in the last few years about using Canada as a test market or a lab for things. Are they turning to Canada to do some experimentation?

Rydlo: We’ve tested out different things, like the scorecards, they’re an example of something that virally came up, and we presented it, and all of a sudden they’re saying ‘thank you, Canada.’ You can wait to be given the permission to go off and do it, but in some cases, because we are a smaller country, we can just get things done quicker because the collaboration is easier.

Van Belle: As part of a global brand, I think Canada operates as more of a generalist model vs. a specialist model. So we look at our global world, the big U.S. and U.K. partners, and they’re very specialized and they use specific agencies in certain ways. In Canada we’re able to be pretty innovative and look across the agencies and use them for different things and just have a more open look at our processes.
When thinking about the global brand, what the research metrics have really brought is the recognition that Canada is in fact its own country, and that they respect that we need to localize the conversation, it’s not ‘here, take a U.S. campaign or take a U.K. campaign.’ The metrics have given us the ability to say ‘we are different, this works better for us’ and be able to almost operate on our own, so to speak, and learn when we need to learn.

McArthur: We’re a long way from them calling Canada and saying, could you help us out.

Meyer: ROI is a common denominator. In our company’s history we used to talk about payouts and so on, but when you have some common tools or use a common third-party with a common tool, now we’re able to say ‘hey, look at this tool that we’ve come up with in Canada to achieve these objectives, and now the U.S. is picking it up.’ And that didn’t use to happen as much.
And when they pick up your tool and they scale it up, we get it back at a lower cost because then we’re getting the benefit of 30 million as opposed to three million. Those kinds of things are happening, but I would say they’re early days, because a lot of what we’re talking about is still not centre line; it’s not all stable.

Saunders: What we try to do is look for business-building innovation. So not getting distracted by the shiny ideas and objectives, but aligning, up front, the goals of that campaign, what do we have to deliver, what are the metrics? It could be just that we’re trying to listen, so we use social media tactics just for a listening post. That’s a really interesting new measure that we’re doing more of, having community listeners for our brands to understand what consumers are talking about. We’re trying to circle around and not just have one metric, so it could be MMM, it could be listening posts and it could be other metrics.
We’ve all been in those awkward conversations with clients: ‘Love it, love the idea, everyone’s really excited, it’s won awards but we don’t know if it worked.’ That just makes me cry. So it’s about making sure we have the right metrics in place that we can work with and then not letting those metrics stifle creativity, because that’s the other barrier.
Sometimes nothing can replace common sense and gut feel, and I think we do lose that.

McArthur: Are you noticing that there’s a backlash to the kind of incendiary atmosphere around social media there was, say, a year ago?

Saunders: I still see frenzy.

Banderk: There’s a worry that sometimes you believe your own hype. There are some people who have fallen into that trap and are pulling back to say this isn’t the holy grail that I thought it might be, I’d better get a deeper understanding. But companies who’ve understood it from the get-go, those are the ones that are still going gangbusters.
I’m going to put 10 bets out there, nine are going to fail and be bad ROI but the one that has an ROI it’s not a two to one, it’s a 100 to one ROI; it’s a monstrous success.

Saunders: It’s about hedging your bets right though, because at the end of the day I work on a lot of brands and we have to impact millions of Canadians, so if I’m reaching 1,000 Canadians in Toronto, I’m not going to put [in the investment], because it’s not just dollars, it’s man-hours – that’s the real cost these days.
So it’s about finding those right bets and being astute, and also about learning the history and about knowing those human truths and common sense.

Meyer: I wouldn’t frame the ROI discussion as one of TV vs. social media. There’s a lot of what we know in ROI, we know when and how to value ER and PR, down to the number. We know when and where to value influencers, we’ve got businesses where we use vets and breeders and oral care professionals and pediatricians, and that used to be a bit of a shot in the dark, and it’s less so today. Now that helps us refine our push there.
Occasionally you’ll end up with absolute white space, like social media, but even then you’ll have tool and principles to kind of forage into that area, but our marketing mix is richer than ever, and ROI is helping it be even richer. Even as we add things, we’re able to be more literate.
So I think the key is not to fall prey to the blind spots of not valuing creativity or not looking out the windshield. Once you don’t fall prey to those you’ll get a lot of value out of an ROI mentality.