How to Visualize Cause and Effect in Local Brand Marketing
Mark Stouse, CEO and co-founder of Proof Analytics, says there are ways for chief marketing officers to gird themselves in case of market downturns by using data to support their value to the businesses they serve. This is especially critical, he says given the growing control over tech spending that CMOs now command. Proof Analytics is an analytics software company that gauges the impact and value of marketing and communications.
Stouse says his platform democratizes business intelligence tools for many different types of users, essentially so cost-effect analysis can be done without the aid of data scientists. His prior positions include serving as CMO at Honeywell Aerospace, and he says his career included trying to show senior management what they got for their money when it came to marketing. He spoke to Street Fight about using analytics to prove the effect campaigns can have, which can support the positions of CMOs.
How can businesses with data from local and hyperlocal make use of your platform?
We’re not measuring anything; we’re the analytics platform. The customer is using their own data, so if they have instrumented something, and they have time-series data about that, they can use it. There are no limits to this in terms of granularity. You can do something local or hyperlocal. It is about what the business has chosen to instrument and measure.
When doing a campaign, there is a time lag between when you launch and when it has an effect on your audience. That can be days, weeks, months, and even years. The longer that lag is, the more difficult it becomes to visualize and see the cause and effect.
If your target is selling toothpaste with a coupon, you’re going to know within 72 hours of issuing that coupon campaign whether or not it was working. You have the scanner data and it is happening in compressed time.
But if you are selling aerospace equipment where the average deal cycle is 18 months, there’s no way for you to say that. You don’t have scanner data or anything like that. You have to be able to compute the cause and effect relationships. In order to do that, you have to understand the time lag. How long did it take to for that to have any kind of effect?
How can CMOs go about “recession proofing” their budgets?
It comes down to opportunity cost. If you talk to any CFO or CEO, any board member, if their CMO wants to spend $100 million on marketing next year, they want to know what they will get for that investment. What’s the return? Specifically, if marketing exists to help the sales teams sell more to more people faster and more profitably, that is a basic set of measurements.
Right now, the problem is a lot of marketers are focused on the top of the funnel, which means selling to more people — but they are ignoring selling more to more people and faster. The faster aspect is what is important because it is what sales cares about the most. If they were closing deals faster, they are selling more. If CMOs want to impress their business leaders, they would to be able to show them that spending $100 million with them will improve their average deal velocity by certain percentages. They will drive deal expansion, selling more to the same customer. They will increase the top line, promote revenue growth, and more deals. All together that is going to give you a return, cash on cash, of solid multiples. If it is 8X, you get $800 million back.
Now the business leader is going to look at that, compare what everybody else is asking for and promising and stack rank that. It comes down to being able to say with some degree of certainty what the return is likely to be, and show them how it would be computed and proven. That is a transformative act by marketing because everyone else in the business traditionally does exactly that, accept for marketing and communications.
Doing this would be a major departure from marketing’s standard operating approach.
How does hyperlocal marketing data need to be handled in your analytic process?
With hyperlocal, in this age of personalized and customized marketing campaigns and marketing deliverables, you have to instrument them appropriately if you’re going to understand the patterns across all of these customized interactions. If you don’t instrument them correctly, you wind up with a lot of pieces of individual data. There’s no pattern. You have to instrument them in a certain way so you understand what the commonalities are, even though they’re personalized and customized. You want to understand things such as; did this improve the customer’s levels of confidence and trust?
The critical thing about instrumenting microlocal and customized activities is you have to be able to roll all that up into some aggregate insights. How did this impact most of your customers?
Is there a dark side to marketing technology, and is it bringing more scrutiny to marketing?
Bot fraud, digital ad fraud, and waste created by marketing and the business in the marketing budgets exist. A lot of finance departments now are focusing on governance and regulatory compliance in marketing to a far greater extent. There’s been a lot of situations where analytics help reveal the existence of fraud. Companies have fired vendors for flooding their website with bots to simulate traffic, because that’s how the vendor was paid. I think we’re going to see a lot more of this type of shakeout to address digital ad fraud.
Joao-Pierre Ruth is a Street Fight contributor.