13 Investing to Grow How Nielsen Can Help Clients Maximize Return on Their Investments German...

8/8/2019 13 Investing to Grow How Nielsen Can Help Clients Maximize Return on Their Investments German Gutierrez Nielsen

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Confidential & Proprietary Copyright 2009 The Nielsen Company

Investing to Grow:

How Nielsen can Help Clients Maximize Returnon their Investments

September 9, 2009


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August 27, 2009 Confidential & ProprietaryCopyright 2009 The Nielsen Company

Presentation Name orConfidentiality Status

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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 influenceconsumer 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?


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Clients utilize Nielsens Marketing ROI SolutionsFramework to grow profitably while addressingmarketing fragmentation.

Measure the impact & ROIof marketing spendingthrough Marketing Mix

Models & Analysis

Evaluate impactcompared to norms

and maximumpotential

Recommendimproved execution &

investmentstrategy to grow.Implement strategy.

Track execution andimpact of new marketing

plan


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Nielsen Marketing ROI Solutions encompassthe store, the market and the consumer.

Measure store-level marketingresponse by using store-level

data

Integrate market-level trends &differences

Understand consumer-levelresponse to marketing


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Model measurements are used in a holisticframework to improve ROI.

Category Dynamics

Portfolio Management Rules

Competitive

Scenario

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 lowROIs 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 orgrowing? 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.


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From Total ROI to Consumer Insights: The NielsenAdvantage


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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 FamilyFHHs


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Example: Advertising Response by MexicanLifestyle Segments

1) Measure the Average Household ROI = $1.05

2) Quantify differences in ROI using consumerdemographics data

Television Advertising

Response/ROI Summary

ConsumptionIndex

ResponseIndex

ROIIndex

TV Advertising ROIPotential

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 brands TV:

Lifestyle D/EROI = $1.23 (compared to $1.05 average)


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$1.21

$0.93

Lifestyle C Lifestyle A/B

Targeting more responsive consumer segmentscan 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?


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Balancing the Short-Term & Long-Term:What We Know from our Research

Media has a measurable impact on

brand penetration both in the currentyear and the subsequent one.

Media prevents churn and increases trial, thus leadingto 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 brandpenetration in the longer term.

Promotions cause both churn and trial, in effect losingbuyers on one hand while gaining buyers on the other

Promotions therefore tend to increase price elasticity

Category actions matter a lot its yourshare of activities rather than howmuch you do...

Category promotion rates have more influence on trial &churn than a brands own rates

Impact of Media on

Brand Penetration*

Year One Year Two

IncrementalPenetration

* Based on US FMCG Study


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Argentina Case Study: The Long-Term Effectof 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 onmedia during the recession

While returns were low during the recession,

they increased dramatically during theeconomic recovery, giving the brand a

competitive advantage!!

Media ROI Trends


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Increasing Consumer Touch-points: DoesDigital 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


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Top 5 Things to Remember for your MarketingBudget

1. All consumers not equal in response understand and target your mostresponsive consumers.

2. Brand communication investment is crucial to maintain or increase your userfranchise promotional activities alone will not achieve this.

3. As the traditional media market fragments, digital technology offers new andinnovative ways to communicate with your consumers in an ever more targetedway. TV generally dominates as a volume driver, especially for big brands.

4. Digital works best when synergised with other brand activities and is welltargeted it should be part of a holistic campaign.

5. Make your investments work as hard as possible through maximising both haloand synergies.


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Realizing Improvements in Marketing ROI: Nielsen Process

Bringing together our experience in..

- 30+ Countries

- 100+ Brands- 10+ Years


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CustomizedModels

Models fit to

purpose

Rightspecification

Right trade-offbetweenspeed &flexibility

Expert Analysis&

Interpretation

Senior Mixexpertise

Integrateclient in

interpretation

Integrate otherresearch or

data available

ContinuousApplication &

Learning

Marketing Mixa process, not

an event

Test & Learn

What-ifscenarios

Meta-learnings

Nielsen works with clients to create a best-in-class Marketing ROI program.

RightProgram Set

Up

Multi-functional

participation &buy-In from alllevels of theorganization

Clientleadership as

sponsors

BIC MarketingMix Program

Improvementin marketing

ROI

IntegratedROI-based

planning &decisionmaking


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Confidential & Proprietary Copyright 2009 The Nielsen Company

Thank You!!

Questions?

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