Measuring and Managing ROI WFA/ISA Global Advertiser Conference Mar 5 2008

Agenda Why worry? The 5 keys to effective marketing management People Objectives Measurement Optimization Monitoring What’s in it for me?

The first signs of a slowdown?

Marketing is under the microscope Budgets are shrinking CEOs are demanding ROI

Or as the finance department says: Why am I spending this money? Can I do it with less? What does it actually do to my business?

Marketing effectiveness can double the improvement in ROI + 30% Strategic Resource Allocation Marketing Effectiveness Marketing Driver Optimization Campaign Effectiveness Mgt Marketing Return on Investment Media Buying Costs Marketing Efficiency Marketing Materials Marketing Services Mgt - 15%

Increased focus on short-term sales drivers Source: Donnelly Marketing; Accenture; Zipatoni, via Promo; IBM Strategy & Change analysis

The evolving landscape offers major challenges and opportunities Opportunites Ever increasing pace of decision making required Increased consumer power and avoidance Difficulties in managing a vast volume of data Balancing short-term responses with longer term value creation Relentless pressure for accountability and quarterly profit generation Improved technology allows course correction faster than ever Ability to target audiences of one, with relevant messages Data mining and analytics improved over the last decade Web 2.0 allows marketers to create a dialogue with consumers Digital marketing opportunities allow new remuneration models and increased accountability

Marketers require marketing effectiveness frameworks that deliver Speed of insight: Leverage technology to enable faster reaction to competitive/underperforming activities 360 view of business: Alignment around objectives, consolidate all data to ensure programs are coherent Ongoing RoI capability: From ‘piecemeal’ analytics to cost effective monitoring of MROI Actionability: Make analytics relevant by putting them in the hands of decision makers

The 5 keys to marketing effectiveness People Senior support from CEO/CFO Objectives Identify incremental and brand building efforts through multiple KPIs Measurement Quantify business drivers in financial terms Optimization Invest behind highest performing initiatives Monitoring Track and course correct on an ongoing basis

High level overview Data Integration Web Platform RoI Measurement Client Internal Sales Financials CRM / Promos Client External Retail Audit Brand tracking Agency Flowcharts Competitive spending Consumer insights Creative Creative content Environment Seasonality Macro trends Benchmarks Spending Ratios Effectiveness RoI Measurement

Measurement example: Healthcare India Business Context Temperature Pricing / Promotions Consumer Promotions Trade Promotions Marketing TV Advertising Print Advertising Radio Internet Celebrity Endorsement Competitors Distribution Pricing Marketing

Urban communities are more responsive to marketing but rural produces greater ROI 4.2 3.1 0.9 1.1 1.3 1.4 1.2 2.3 3.6 0.2 3.8

Reallocating communications spend improved profit by 18% TV w/ endorsement Print (Urban) Promo (Rural) TV : No endorsement Radio (Rural) Short-term incremental sales Promo (Urban) Print (Rural) Internet (Urban) Long-term brand building

Monitoring: Marketing Console Shield the complexity of measurement: Monitor business performance: Track performance against all objectives and KPIs in real time Evaluate Marketing effectiveness: Understand business drivers, their importance and profitability in the short and long term Optimize spending allocation: Simulate, and optimize the business outcome of alternative spending scenarios

What is in it for you? Having the right process and tools in place will connect the CEO/CFO and CMO Measurement is complex but allows you to understand the financial outcomes of decisions Bringing this together in a marketing console allows you to balance both short-term sales drivers and longer-term brand building initiatives Track ROI on an ongoing basis to adjust and course correct