Analytics 2.0
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Most companies traditionally allocated advertising budgets to different channels like TV, print, radio, and online ads independently. However, new data and analytics show that advertising channels interact with each other and are more effective when coordinated. Analytics 2.0 uses predictive tools and large data sets to quantify the contribution of each advertising element, run optimization scenarios to test different channel combinations, and enable real-time allocation of resources across channels based on what will be most effective. Proper implementation of Analytics 2.0 requires organizational change, data collection across marketing and business metrics, starting with small tests, and continuous improvement of models.
Analytics 2.0
- 3. Most Companies had the notion that TV, print, radio and online ads each functioned independently to drive sales.
- 4. Traditional Ad Budget Allocation Tv Ads Youtube Search Ads Others 6% 4% 5% 85%
- 6. were nearly twice effective in prompting online searches that led to purchases. And….
- 7. Search Ads generated 25% sales.
- 8. Swim-Lane Measurement “Marketers commonly measures the performance each of their advertising activities as if they work independently of one another.”
- 9. That‟s no longer effective!
- 10. Because…!
- 11. Advertising touch points does not works in isolation. They interact.
- 12. After advent of Digital Marketing marketers are able to track every online action of consumers.
- 13. But it generates oceans of data within a moment.
- 14. Analytic1.0 to Analytics 2.0
- 15. Analytics 2.0 With the predictive tools (latest computing technologies, cloud- based analytics and cheap data storage) measures interaction of advertising across media and sale channels and identifies precisely how exogenous variables affect ad performance.
- 16. Analytics 2.0 Provides fundamentally new insights into marketing‟s effect on revenue.
- 17. Analytics 2.0 Involves three broad activities: Attribution, Optimization, Allocation.
- 18. 1.Attribution The process of quantifying the contribution of each element of advertising.
- 20. Start by gathering data…
- 21. Challenge…!!!
- 22. Knowing what to focus on-the single rather than the noise.
- 23. Companies must collect data across five categories: Marketing conditions Competitive activities Marketing actions Consumer response Business outcomes
- 24. 2.Optimization Or War gaming! -by using predictive analytics tools to run scenarios for business planning.
- 25. It‟s like advertising virtually and observing the effect of different advertising mediums.
- 26. You can assign „elasticity‟ to every business drivers you‟ve measured, from TV advertising to search ads to fuel price and local temperatures.
- 27. War gaming runs thousands of scenarios within minutes.
- 28. Can test „What if‟ conditions.
- 29. Thus Optimization software generates most likely scenarios along with marketing recommendation.
- 30. Then…?
- 31. 3.Allocation “Real-time redistribution of resources across marketing activities according to optimization scenarios.”
- 32. On monthly, weekly or daily basis- and, online, even from one fraction of a second to the next.
- 33. Five steps to implementation First, embrace analytics 2.0 as an organization-wide effort that must be champion by a C-level executive sponsor.
- 34. Second, assign an analytics- minded director or manager to become the point person for the effort.
- 35. Third, armed with a prioritized list of questions you seek to answer, conduct an inventory of data throughout organization.
- 36. Fourth, start small with proofs of concept involving a particular line of business, geography, or product group.
- 37. Fifth, test aggressively and feed the result back into the model.
- 38. In a multichannel business analytics 2.0 becomes more complex and requires vendors with specific analytics and computing abilities.
- 39. Companies that don’t adopt next-generation analytics will be overtaken by those that do.
- 40. THANK YOU!