Deloitte marketing

performance management
Helping clients understand
and optimize their marketing
investments
Content
Digital technology, Big Data and the future of marketing ....................................................................... 1

What is the customer responding to? .................................................................................................... 1

An explosion of data and tools ............................................................................................................... 2

Toward a new solution ........................................................................................................................... 4

So, what is Ncyte? .................................................................................................................................. 5

The Ncyte data model ............................................................................................................................ 5

Visualization: The analyst knows best ...................................................................................................... 8

Baselines: A different spin on predictive analytics .................................................................................... 9

Ncyte: An ongoing strategic offering ...................................................................................................... 11

From change management to analytical services ..................................................................................... 11

Quantifying the benefits: A case in point ................................................................................................. 11

Helping marketers fulfil their mandate ................................................................................................... 12

References .............................................................................................................................................. 13

2 Deloitte marketing performance management Helping clients understand and optimize their marketing investments
Digital technology, Big Data
and the future of marketing
Marketing is getting its due as a strategic plank in business strategy – it’s no longer just
a cost center to be controlled. CMOs are fast becoming key players in the boardroom
and are facing unprecedented challenges, along with pressures and demands for
accountability and performance. First and foremost, the advances of digital technology
and dramatic changes in consumer shopping behaviour have conspired against the
traditional marketer and changed the game for today’s CMOs.

The data and analytical tools generated by this new digital Figure 1 – Defining today’s marketing ecosystem:
activity are unprecedented and growing by leaps and How companies and brands interact with consumers
bounds. Accordingly, marketers must adopt new data
strategies or face a disadvantage. Digital communication
and social channels used by the new consumer are putting TV
pressure on marketers to make better decisions and react
to market dynamics more quickly than ever before. One Search
SMS
false move can destroy years of brand building.
Apps
Mobile
CMOs require clear visibility into the impact of their Youtube Facebook
marketing dollars and deep understanding of the channels Twitter
and vehicles that drive performance. The optimal mix of Phone Community Social
brand-, customer-, and product-driven marketing is still Word of
Site Mouth
the “Holy Grail,” but the playing field has grown more
Mobile site
complicated. New ways of thinking are required.

What is the customer responding to? Print Sales

Digital technology has altered the marketing eco-system Sales
Store
forever, employing a complex network of vehicles Postal Mail
and channels designed to interact with and motivate Mail
customers. Figure 1 shows the many options that Mobile
marketers have to engage with a consumer. Every Store app
company and brand uses a unique combination of vehicles Loyality
Program
to engage their customers. Each “path to purchase” now
In Store
has more touch points than ever before, providing a rich
data repository and insight into customer behavior.
Radio
All companies wonder if they’re getting maximum value
from their customer interactions. The data is available, but
organizations struggle to understand which investments
are making the most difference.

To leverage these touch points, organizations must learn

how to harness data big and small so that they can derive
the insights they need to better serve their customers.
Theintegration of data from all of these touch points is
the #1 challenge faced by organizations.

Deloitte marketing performance management Helping clients understand and optimize their marketing investments 1
 An explosion of data and tools
The recent “Global CMO Study”1 published by IBM states that only 48% of CMOs feel they are prepared for the volume
and complexity of data in the next five years. In another report by EMC, researchers found that only 38%2 of business
intelligence analysts and data scientists strongly agree that their company uses data to learn more about customers,
leaving a surprising number of companies ill-prepared to deal with the new marketing landscape.

The top item on the worry list is the current data explosion, automation software (MAS) and business intelligence at
followed closely by social media, mobile devices and one end, and marketing mix consultancies at the other.
shifting demographics. It is estimated that the total data
generated will grow from 180 billion gigabytes today to In a recent Deloitte Consulting CMO Council survey,4
40 trillion by 2020.3 Younger people are becoming a more CMOs were asked about the technology in which they
influential buying group, so knowing how to engage them planned to invest. Email marketing solutions led the list,
through all types of communication vehicles, including followed by social and online community building, web
mobile devices, is very important. site performance optimization, campaign management,
and lead management systems.
As a consequence of digital technology and the resulting
data explosion, the software and solution offerings “50 percent of respondents think they are underprepared
available to address these issues appear to be deep. The to manage all but two [areas]: regulatory considerations
space is dominated by two polar extremes–marketing and corporate transparency” CMO Study.5

Figure 2 – IBM 2012 CMO Sudy

Percent of CMOs reporting underpreparedness

Data explosion 71%

Social media 68%
Growth of channel and device choices 65%
Shifting consumer demographics 63%
Financial constraints 59%
Decreasing brand loyalty 57%
Growth market opportunities 56%
ROI accountability 56%
Customer collaboration and influence 56%
Privacy considerations 55%
Global outsourcing 54%
Regulatory considerations 50%
Corporate transparency 47%

2 Deloitte marketing performance management Helping clients understand and optimize their marketing investments
Given the access to software tools, why the lack of preparedness for the coming data and digital revolution quoted in
these studies? Forrester provides a clue and describes the shortfalls of these technology solutions in the following way:
• Vendors have shown an inability to keep pace with for things like real-time response tracking and event-
the breadth of changes in customer activities regarding based triggering.
their interactions with the brand and their purchase • Most vendors offer planning platforms, but most do
channel usage. not offer forecasting or simulation to support strategic
• Vendors show a reluctance to adjust to the needs of planning efforts.6
online and offline to accommodate new functionality

In the same survey, CMOs were asked to define their key mandates. The top three responses were “drive top line growth,”
“define brand” and “define value proposition”. To address these challenges, marketers have access to vendors that offer
modeling solutions such as marketing mix modeling. Forrester groups these solutions into three categories: Model-focused,
technology-focused and data-focused.

Figure 3 – Solutions that are available today to marketers

Model focused Technology focused Data focused

Custom marketing mix Syndicated-type Data aggregation

What it is
modeling solutions software tools and processing

Knowledgeable consultants • Is integrated with existing • Part of a suite of client

who help build complex and data systems services and offerings
Key benefits reliable models • Offers marketing • Helps integrate and
effectiveness benchmarks synthesize multiple data
within verticals and channels streams

Who does it Accenture, Ninah MarketShare, ThinkVine SymphonyIRI, Nielsen

Again, Forrester outlines solution shortfalls:

• Typically, a one-off solution that addresses specific • [These solutions] delegate the activation of the model’s
problems doesn’t embed the model’s insights into insights to third parties which typically means the
marketing’s planning cycle. intelligence of change remains outside the organization.
• [Such solutions] rely on out-of-date data with models Smart marketers need to rely on the change
and insights delivered months after budgets were spent management capabilities of their vendor to make sure
and the campaigns aired. To create more actionable and that decision processes and behaviors change in light
near-term insights, marketers need models that reflect of the model’s outcome.7
the recent marketing investments.

Deloitte marketing performance management Helping clients understand and optimize their marketing investments 3
Toward a new solution
The actual goal of a marketer is really quite simple to articulate, but hard to achieve. In short, marketers want to be able
to give rational answers to the following questions:
• How does our marketing spend perform across • Is our marketing analytical capability ongoing and agile?
all channels? • Do we have the ability to implement strategic marketing
• How can we spend our marketing dollars in the right decisions and adjustments in real time?
place to maximize and optimize MROI? • Can we develop the talent and resources to harness big
• Can we understand what our multi-channel customers and small data to provide strategic insights?
need and want?

Marketers need a methodology and delivery model to address the deficiencies articulated above and to allow them to
answer their key questions.

We believe that solution is Ncyte.

4 Deloitte marketing performance management Helping clients understand and optimize their marketing investments
So, what is Ncyte?

Ncyte is Deloitte’s powerful managed analytics solution Integrated data methodology, data visualization forecasting
for helping companies make smarter sales and marketing and planning functionality support strategic decision
decisions across all channels, media and customer making that helps you get smarter, faster.
segments. It is software, insight and strategy all in one
service. Using patented algorithms, proprietary data Ncyte consists of three major parts:
models and predictive analytics, Ncyte delivers actionable 1. The Ncyte data model
insights companies can use to acquire new customers 2. Visualization
more efficiently and capture more value from each 3. Baselines – a different spin on predictive analytics.
ongoing relationship.
The Ncyte data model
From customer interactions to cross-selling tactics, from The Ncyte data model (Table 1) has been designed to
social media to traditional advertising, from mobile apps meet many key marketing challenges – and resolve many
and web banners to in-store flyers and promotions, Ncyte of the deficiencies found in other solutions.
provides solutions to the marketer’s key challenges.

Table 1 – Ncyte data model explained

Need Description

Provide a vertical and category-agnostic solution that captures

1 Integrate marketing silos all detailed marketing events and downstream performance.

Provide a complete historical record of all marketing activities.

2 Historical marketing record
Store and treat all data in a date-stamped time series to facilitate
3 Time series visualization and econometric modeling.

Incorporate all data – internal sources, third party demographic,

4 Data inclusivity competitive, offline, online and unstructured.

Use dimensions and measures relevant to the marketer while using

5 Data familiarity a common data model and code base for all.

Leverage a simplified ETL and proprietary file format for marketing

6 Prompt solution delivery data. New services can be up and running in 80% less time than
competing solutions.

Integrate with third-party or open-source statistical modeling,

7 Statistical model integration gaining efficiencies from the collection and aggregation of data.

Data can be refreshed and updated frequently to make learning

8 Refresh frequency in near real-time and strategy an ongoing exercise.

Deloitte marketing performance management Helping clients understand and optimize their marketing investments 5
 Events
The data model strategy is based wholly on the concept awareness metrics, social media mentions, and nearly
of a planning event and represents the central entity in anything else. Using Ncyte, a marketer can gain unique
the model. Ncyte is designed to emulate what marketers insight into spend and performance and a full view into
do – namely, create and manage real marketing “events.” customer responses to marketing plans.
Most marketers capture their marketing activities in
spreadsheets, but with Ncyte, they are able to define and In order to capture any organization’s unique marketing
capture performance as well. Marketing performance can ecosystem, Ncyte classifies events in one of three ways,
be sales, web clicks, store visits, call center calls, brand as illustrated in Table 2 below.

Table 2 – Defining marketing event

Event type Example Visualize Associated Tracked Baselines

trending spend performance

1 Attributed Email
campaigns
Yes Yes Yes Yes
campaign erformance

Brand
2 media
Brand and
awareness investment
Yes Yes No No

3 Unattributed Sales
performance
Yes No Yes Yes
performance

Ncyte is designed to emulate what marketers do –

namely, create and manage real marketing “events.”
Most marketers capture their marketing activities in
spreadsheets, but with Ncyte, they are able to define
and capture performance as well.

6 Deloitte marketing performance management Helping clients understand and optimize their marketing investments
To categorize their marketing ecosystem, we take Capabilities
organizations through a process called data amnesty. All The event-based design serves a number of purposes:
of the organization’s data goes on the table, and we ask: • Past events represent a granular historical record useful
• What drives the business and where does marketing for ongoing reporting and analysis.
play a role? • Baselines can be generated using patented Ncyte
• What are the Key Performance Indicators tracked algorithms for attributed and unattributed
by marketing? performance events.
• How and where do they spend their marketing dollars? • Events can represent future marketing plans with
• What data systems are used for each type of data? forecasts of potential performance.

This discovery process will lead to the data model

taxonomy. For example, a real financial services institution’s
(FSI) information produced the following three definitions:
1. Acquisition campaigns – Direct mail campaigns sent
to potential customers with a direct call to action.
Performance was captured in a CRM system. These are
attributed campaign events.
2. Branch – The branch channel captures the performance
of customers walking into a bank branch to purchase
a product. There is no direct connection between a
marketing event and the customer. Branch events are an
example of unattributed performance.
3. Media campaigns – These are awareness campaigns.
The organization has invested in advertising to
drive awareness of the brand. There is no downstream
performance.

Deloitte marketing performance management Helping clients understand and optimize their marketing investments 7
 Visualization: The analyst knows best
Further examination of the same FSI case shows how Ncyte can visualize marketing performance and uncover insights.
The Ncyte platform has a unique technology that allows an analyst to interact with the data easily, visually and with the
greatest degree of flexibility.

For example: Graph 1 – Viewing acquisition campaigns and performance

1. An analyst can see Acquisition campaign (Nov 1, 2007 – Nov 1, 2010)
how all directly attributed
campaign investments
(blue bars) drove the
acquisition of new
customers (red line).

Graph 2 – Viewing branch channel performance

2. Next, the analyst Branch (Nov 5, 2007 – Nov 1, 2010)
investigates branch channel
performance. These are
unattributed so there are
no associated investments.

Graph 3 – Complete marketing performance

3. Adding in media and Total (Nov 1, 2007 – Nov 1, 2010)
brand spend (yellow,
purple and green bars)
completes the view. The
analyst can now search
for relationships between
marketing investments
and performance.

8 Deloitte marketing performance management Helping clients understand and optimize their marketing investments
Ncyte forces the analyst to connect causes with effects in the search for marketing performance. This rich visual
toolset helps an experienced analyst gain insights and form hypotheses without having to resort to mathematical
modeling. With Ncyte providing the visual cues, the marketing analyst does know best.

Baselines: A different spin on predictive analytics

Once a client’s marketing history has been categorized within the event model, rich behaviour patterns can be
illustrated by a number of patented curves:
• Performance curves for time series response patterns • Seasonal and fiscal year response patterns
• Day-of-week response patterns • Multi-year (and multi-fiscal period) trending patterns.

The aggregation of these response patterns produces a full baseline of behaviour for a period of time, allowing
us to ask unique questions of the data.

Again looking at our FSI case example, we are able to overlay performance baselines on any chart at any level
of granularity to compare actual vs. baseline performance. The analyst’s goal is to find periods of variance.

Graph 4 – Using Ncyte baselines to spot variance in acquisition campaign performance

Acquisition campaign (Nov 1, 2007 – Nov 1, 2010) For the above acquisition
campaigns, there was a
clear performance-over-
baseline variation in the
beginning of the year. The
analyst should now drill
into that period of time to
discover more about those
campaigns. What drove
the over performance?
Was it the product offer or
external economic factors?

Graph 5 – Using Ncyte baselines to spot variance in the branch channel

Branch (Nov 5, 2007 – May 31, 2010) Branch performance has a
considerable variation from
the baseline.

Deloitte marketing performance management Helping clients understand and optimize their marketing investments 9
Graph 6 – Using Ncyte baselines to see a complete view of all marketing investments
Total (Nov 1, 2007 – May 1, 2010) Putting all of this together
with the media campaigns
shows the whole story.
The analyst has reason to
hypothesize that the extra
media spend drove the
performance variation.

Finally, marketing mix modeling and other advanced analytic inquiries is easier with Ncyte: the data is already cleansed
and normalized into a time series. The data model allows for easy and frequent refresh, so these exercises can be
done on command or whenever business sense suggests. By combining the power of Ncyte with advanced analytics,
marketing departments can be more proactive in managing their budgets and achieving performance targets.

Finally, marketing mix modeling and other advanced analytic

inquiries is easier with Ncyte: the data is already cleansed and
normalized into a time series. The data model allows for easy
and frequent refresh, so these exercises can be done on command
or whenever business sense suggests.

10 Deloitte marketing performance management Helping clients understand and optimize their marketing investments
Ncyte:
An ongoing strategic offering
From change management to analytical services
Ncyte is not a point-in-time solution. Other vendors have a narrower focus, such as:
• Selling issue-specific technology or software
• Making one-time media mix recommendations
• Providing periodic market research.

With Ncyte, Deloitte can deliver insight and strategic advice on an ongoing basis through a managed service.
These services include:
• Workshops to help companies understand their • Advanced analytical services and strategic
own marketing data and ecosystems marketing planning services, including:
• Change management to help companies develop – Quarterly, annual marketing planning support
a more data-driven culture – Product launches
• Cost-effective and securely hosted software – Marketing mix models
easily accessed through a browser (Software as – Market opportunity assessments
a Service – SaaS) – Customer strategy
• Data management services to transform and – Trade spend analysis
visualize client data on a regular and ongoing basis – Competitive impact analysis.

Quantifying the benefits: A case in point

A consumer packaged goods company couldn’t understand why it was losing share during a period of
traditionally strong performance. Some speculated that a cut in media advertising was responsible for the
decline. Leadership, however, wanted to understand the impact of all marketing activities, including retail
promotions, online, social media, sponsorships and competitive activity.

The marketing team was not able to collect data from multiple sources and hence could not defend
its strategy. Using Ncyte, Deloitte analytics helped the company execute a comprehensive customer
performance strategy, incorporating the competitive landscape, product mix, channels, messaging and an
improved marketing mix.

After implementing our recommendations, the company saw a 3.5% increase in sales in a declining market,
resulting in over $2.5M in sales.

Deloitte marketing performance management Helping clients understand and optimize their marketing investments 11
Helping marketers
fulfil their mandate
Ncyte is Deloitte’s powerful managed analytics solution and web banners to in-store flyers and promotions,
that helps companies make smarter sales and marketing count on Ncyte to get smarter faster.
decisions across all channels, media, and customer
segments. Using proprietary data models and a patented At the heart of Ncyte is proprietary software that measures
algorithm that enables predictive analytics, Ncyte delivers connections between sales and marketing, customer
actionable insights to help engage customers in an efficient performance, and profitability. But with its built-in layer
and meaningful way and to capture more value from each of advanced analytics, Ncyte does even more. It delivers
relationship. automated scenario and predictive modeling to support
prescriptive decision-making about marketing mix, pricing,
From customer interactions to cross-selling tactics, from channel management, and customer strategies.
social media to traditional advertising, from mobile apps

The result? Smarter choices, and the

confidence of knowing your sales and
marketing investments are on the
right track.

12 Deloitte marketing performance management Helping clients understand and optimize their marketing investments
Our team

John Wylie Adrian Borys

Manager, Financial Advisory Manager, Financial Advisory
[email protected] [email protected]
416-775-8537 416-874-3268

References

1. IBM Institute for Business Value, 2011,

“From Stretched to Strengthened: Insights from the Global Chief Marketing Officer Study”, Somers, NY., U.S.A
2. EMC, 2011, “Data Science Revealed: A Data-Driven Glimpse into the Burgeoning New Field”, Hopkinton, Mass., U.S.A.
3. Paderni, Luca S., Q3 2011, “The Forrester Wave™: Marketing Mix Modeling”, Forrester Research, Q3 2011
4. Cutten, C., and MacMillan J., Deloitte Consulting LLP., CMO Council, “Marketing Outlook 2011”
5. IBM, Op. cit.
6. Brosnan, Robert, “Revisiting The Enterprise Marketing Software Landscape”, Forrester Research, February 2012
7. Paderni, Luca S., “Manage Your Marketing Mix Modeling Vendors”, Forrester Research, January 2013

Figure 1 – Forrester - January 2013 “Mix Art And Science For Marketing Success” –
The Marketing RaDaR Model Supports The Entire Customer Life Cycle
Figure 2 – IDC, EMC
Figure 3 – IBM – CMO Report – 2012 From Stretched to Strengthened
Figure 4 – Forrester – December 2012 “Predictive Analytics Revolutionize Marketing Mix Planning” –
The Marketing Mix Modeling Landscape

Deloitte marketing performance management Helping clients understand and optimize their marketing investments 13
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