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The Creation and Communication of

Marketing Value dffh Sanoma – Get Tomorrow 2019 sdfad

Fran Cassidy, Founder, Cassidy Media Partnership

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Components of S&P 500 Market Value

17% 32%

68%

80%

84% 83%

68%

32% 20% 16%

0

10

20

30

40

50

60

70

80

90

100

1975 1985 1995 2005 2015

Intangible Assets Tangible Assets

Source : Ocean Tomo llp, Intangible Asset Market value study 2017 / Jonathan Knowles Type 2 Consulting

Research, Databases, Contracts, Copyright, Tech, Software, Patents dfg

Marketing, Brand 20%

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0

5

10

15

20

25

30

35

40

45

50

Average brand value 20% but varies between 5 - 45% by sector

Source : Jonathan Knowles : Type 2 Consulting - analysis of data from annual brand value league tables by Brand Finance, Eurobrand, Interbrand, Millward Brown for 6 yrs 2010 to 2015.

Brand Value as % of market capitalisation

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Brand Z “Strong Brands” Portfolio v S+P 500 v MSCI World Index

Brand Z - 124.9% S+P 500 - 82.1% MSCI - 34.9%

2007 2010 2011 2012 2013 2014 2015 2016 2017 2009 2008

Value increase over 10 yrs April 2006 to April 2017

Source : Kantar Millward Brown

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Gap exists between some of the perceived benefits of ‘brand’ and current business priorities

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Increased Profitability

Margin improvement

Future Cash flow

Risk Reduction

Benefit of Brand Business Priority

64%

63%

72%

41% 53%

49% 71%

59%

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Boards are not confident in brand management Knowledge of brand building is perceived as average to poor in 50% of boardrooms

0 20 40 60 80 100 120

Marketers

Business Leaders

Excellent Good Average Poor Very Poor

Source : FT / IPA - Board Brand Rift Q: “How would you rate the knowledge and understanding of how a strong brand is built and maintained at board level in your organisation?

52%

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Are we in danger of losing brand building skills? A third of marketers rate themselves average to poor

0 20 40 60 80 100 120

Marketers

Business Leaders

Excellent Good Average Poor Very Poor

Source : FT / IPA - Board Brand Rift Q: “How would you rate the knowledge and understanding of how a strong brand is built and maintained at board level in your organisation?

33%

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When business leaders understand how brands are built they believe in the benefits of a balanced approach to marketing

Low Brand Understanding High Brand Understanding

49%

83%

Q: “Our board understands that a balanced approach to short and longer term marketing objectives will deliver a stronger commercial performance.” Strongly Agree / Agree

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New Performance related pay image here From Sanoma graphic designer

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5 Key Factors to develop better marketing

effectiveness

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Pure financial activities increasingly automated

Finance has moved from reporting business performance to driving it

Source : McKinsey, 2018

1.Collaboration ( esp finance )

100

33

40

20

18

11

19

9

4

67

40

60

43

34

24

18

17

18

12

10

20

21

45

19

36

4

4

12

10

18

11

38

36

75

79

77

Business development

External relations

Audit

Risk management

Treasury

Financial planning and analysis

Tax

Financial controlling and external reportin

Revenue management

Cash disbursement

General accounting operations

Fully

automatable

Highly

automatable

Somewhat

automatable

Difficult to

automate

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How companies make money

12

Shareholder Value/

Profitability

GROWTH

Expand

market

Convert

non-users

Increase

usage

Enter new

segments

Market

penetration

Take share from competitors

CASH/MARGIN/

PRODUCTIVITY

Reduce lower

profit activities Raise prices

Cut costs

Variable

costs

Fixed costs

Growth Focus

Margin/ Productivity

Focus

Source : Based on Peter Doyle / Marketing Management and Strategy

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How companies make money

13

Shareholder Value/

Profitability

GROWTH

Expand

market

Convert

non-users

Increase

usage

Enter new

segments

Market

penetration

Take share from competitors

CASH/MARGIN/

PRODUCTIVITY

Reduce lower

profit activities Raise prices

Cut costs

Variable

costs

Fixed costs

Growth Focus

Margin/ Productivity

Focus

Source : Based on Peter Doyle / Marketing Management and Strategy

Marketing Contribution

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Know where you are adding value

Do The Maths

Common language

Show your metrics matter

Have an evidence based mindset

5 Steps to Building Bridges with Finance

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I am a Finance person. I like certainty. Marketing also look at – I can’t

quite remember the name of it – something to do with ‘brand equity’.

If I’m really honest from a finance point of view I don’t give much

weight to the softer ones – the ‘brand equity stuff’.

Finance Director

2. Language

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Change the terminology

Non Working Media

Management Information

Brand Halo Effect

Soft Metrics

Longer Term Spend

Asset Creation

Business Intelligence

Margin Protection

Levers to unlock future growth

Risk reduction, Positive Cash Flow

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Change how we frame the task

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- Put effectiveness at the beginning not at the end of the process

- Move towards a Learning culture rather than a Justification culture

3. Process

CHECK

PLAN

DO ADJUST

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Government

Communication

Service

Which of the government’s narrative Communications strategy/idea

strands does this activity fall under?

Context and background

(100 Words max) Evidence of effectiveness

Policy Aim Summary and breakdown of

spend

Communications objectives Value for money

( ensure these are robust, numeric

and measurable )

What is the expected return

on this marketing investment

Target audience/s ( as an ROI figure )?

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Emotional messages drive almost twice as many profit effects as rational / activation

messages 35

%

Rational messaging Combined approach Emotional priming

Ve

ry l

arg

e p

rofi

t e

ffe

cts

30

% 25

% 20

% 15

% 10

% 5%

0%

Source: Binet & Field 2013

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• Source: ‘Profit Ability: the business case for advertising’, November 2017 • Gain Theory long-term ROI study

18%

42%

58%

Attribution

modelling

Short-term

econometrics

Long-term

studies

The majority of

advertising

returns occur in the

long-term

The proportion of total

profit revealed by

attribution modelling

and econometrics

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4. Toolbox

Do you have data or do you have evidence ?

Do you understand the quality of that evidence ?

Are your metrics credible to senior management and have they agreed them?

Are you in a “reporting culture” or a “So What, What’s Next” culture ?

Price elasticity ? / Quality of the message?

#EffWeek Source : Data 2 Decisions 2014

Top 10 ways to Improve Advertising ROI

Position Profit Multiplier Factor

1 2 3 4 5 6 7 8 9 10

Market/Brand Size and share 18.00 Creative and ad length 12.00 Budget setting across geographies 5.00 Budget setting across portfolio 3.00 Multimedia campaigns 2.50 Budget setting across variants 1.70 Cost and product seasonality 1.60 Product .v. equity .v. seasons 1.40 Laydown of spend over time 1.15 Target audience 1.10

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Measures/Metrics that matter*

Methods

Intent to Purchase

Digital Attribution

Experiments/A+B testing

Methods

Integration of above

Hierarchy/Agent models

Net Promoter Score ( NPS )

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Consideration

+1%pt Uplift in sales

0.5 - 1.5%pt

Clear link between Consideration + Base Sales / SOV + Price

SOV increase

+10%

Decrease in

price sensitivity

5-20%

Source : Profit Ability – Gain Theory/ Ebiquity

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Hierarchy of Metrics

Source : Gain Theory / Measurement Strategy

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- Improve commercial and analytical skills and improve language used

- Use customer understanding skill for internal stakeholders AND external customers

- Focus on the credibility of brand health metrics and the integration of datasets

- Develop an evidence based mindset. Do not be afraid to communicate uncertainty

- Capability increases influence and ability to challenge status quo and grow together

5. Capability

fran@cassidymedia.com