1. building superior brands...
while focusing on accountability of promotional expenses and investments
Frans Cornelis
managing director Group marketing and communications
NIMA Expert Class Accountability – December, 2009
2. marketing basic philosophy 4 x “P”
Process
P = price = what you ask development
in return for your product
(a fee, a percentage, other P = product = what you offer
elements like service (in our case, services! And not
costs, memberships, or just services, it is a whole method
barter elements) of working, which is what we
Accountability: call a “Concept”)
- Contribution
- Direct Product Profitability
P P Accountability: Cval, Depreciation,
many others, see also price
- Act. Based Costing
see also Product Own people
development
P = promotion = how you
ensure people know about
your product
(and how you make them
P P P = place = how you offer product
in all the places and moments
desire your product more than where it is needed
anyone else’s, by using PR, (branches, people,
advertising, sponsoring, all web, business partners,
other brand building actions) channels, licencees,
franchisees….)
Accountability:
Providing physical Accountability:
- See this presentation! evidence Channel costs, Transport & Service
costs, Training costs, etc
2 December 2009 NIMA Expert Class Accountability
3. “promotion” accountability - basics
• focus on accurate costs measurements, versus:
• accurate effect measurements
• costs: set up a proper measurement system
• effects: count resulting additional gross margin or Ebita,
NEVER just additional revenues
• involve your control/finance department
• involve your agency/advisors/suppliers
• next sheets: Randstad examples
3 December 2009 NIMA Expert Class Accountability
4. how society sees a corporate identity
(2003 actual service industry example - based on Leeflang/van Riel/Fombrun/Cornelis)
Clear Message Reinforce Satisfaction
Correlation plus the right with the result
factors Sufficient spending image (experience)
20 to 25% 20 to 25% 50 to 60%
(Potential)
Clients -58%
(Talent/Flexworkers) Overall view
(Potential) Work in a (mass) market
environment - 10% by the general
(Potential) public
Investment - 14%
Social/Political
Image - 12%
NB: others - 6%
On the vertical axis
4 December 2009 NIMA Expert Class Accountability
5. also a guide for investments and ROI!
Clear Message Reinforce Satisfaction
Correlation plus the right with the result
factors Sufficient spending image (experience)
20 to 25% 20 to 25% 50 to 60%
(Potential)
Clients -58%
(Talent/Flexworkers) Overall view
(Potential) Work in a (mass) market
environment - 10% by the general
(Potential) public
Investment - 14%
Social/Political
Image - 12%
NB: others - 6%
On the vertical axis
5 December 2009 NIMA Expert Class Accountability
6. what are the tools used?
Clear media and DM Consistent and Strong concepts that
advertising defined Brand image are executed in a
messages projection long term superior way
(=resulting in high
customer satisfaction) Marcom
Labor market Consistent and Best people methods
communications in defined Brand image in selecting, Int.
comm
media and PR etc projection long term motivating, promoting
+
etc plus meaningful HR
work (=high employee
satisfaction) Ext.
Specific IR press Consistent and Strong management Comm
meetings, annual defined Brand image of operational results +
report, one-on-one’s projection long term and shareholder value IR
etc
Active press, PA Consistent and Achieving effects in Ext.
coverage of defined defined Brand image society on desired Comm,
PA
issues vs projection long term issues
stakeholders
6 December 2009 NIMA Expert Class Accountability
7. how society sees a corporate identity
Clear Message Reinforce Satisfaction
Correlation plus the right with the result
factors sufficient spending image (experience)
20 to 25% 20 to 25% 50 to 60%
(Potential)
Clients -58%
(Talent/Flexworkers)
mostly mostly mostly
(Potential) Work
awareness image operations
environment - 10%
related related related
(Potential)
Investment - 14%
Social/Political
Image - 12%
NB: others - 6%
On the vertical axis
7 December 2009 NIMA Expert Class Accountability
9. Randstad global marketing cost categories
(managed for marketing by F&A depts)
Outdoor window / street media
TV media (including cinema)
Radio media
In-store merchandising and branding mat.
External design and production expenses
Market research
Sponsoring and Public relations
Relationship management expenses
Consultancy costs
Corporate branding charge
Monthly advertising and marketing costs
Monthly external & supportive expenses
One-off project expenses
Advertising and marketing expenses
Revenues
Expenses marketing personnel
Adv. expenses as % of revenues
A&M exp.&pers. exp. as % of revs
Supportive exp. as % of advertising exp.
Supportive expenditure ('overhead', goal max. 11%):
external design and production expenses, market research,
consultancy costs and various advertising costs
9 December 2009 NIMA Expert Class Accountability
10. 2002 B2C
indirect
benchmark
• Actual example
of external
benchmark
• (10 similar
companies)
• Interesting
specifics:
Trade spending,
sales force and
promotions
• TV use
• Light market
research but still
2%
• Compared with
packaged
consumer
goods: even
heavier
advertising and
trade spending
10 December 2009 NIMA Expert Class Accountability
11. shareholder value champion:
benchmarks for judging internal marketing efficiency
Efficiency action By whom?
Concept & Production costs
Above the line:
gross media and
awareness/image
Media rebates (15-50%) CMO
sponsoring Total spending level BU
costs Planning efficiency BU
Overall agreements CMO
Below the line:
costs of
CRM, DM Response, etc. BU
Direct Mail, Campaign evaluation BU
brochures, Evaluation policy, partners CMO
relationship mgmt
etc. Measure 1-2% Financial discipline All
85% minimum 15%
11 December 2009 NIMA Expert Class Accountability
12. supportive external marketing expenditures
as % of total marketing expenditures (“overhead”): what does that look like?
40%
35%
30%
25%
20%
15%
10%
5%
0%
actual sheet with %”supportive costs” from one year to the next by country
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12 December 2009 NIMA Expert Class Accountability
13. tool to drive down internal costs:
web-based international MRM system
• ‘one brand, one voice’
• central design, central sourcing
• webshops for photo database, designs, marketing materials, housing and
branding elements
• design wizards
• uniformity/consistency
• headcount savings -/- 20 %
• savings design/printing/other -/- 25 %
13 December 2009 NIMA Expert Class Accountability
14. example: web communications toolkit
web getting
close to other
mass media in
reach and
efficiency
important for
image building
also
network-
centered
functions grow
(“web 2.0”)
marketing
techniques
becoming more
known
14 December 2009 NIMA Expert Class Accountability
15. awareness: tools, initial USA cost estimates
examples from work sessions – in CPM, reach
(cost per thousand, subjects reached/contacted)
TV advertising Peak, all public $27 > 1.000.000
Radio advertising Peak, AB+ (AM drivetime) $6 >100.000
Web newsletter ad AB+ business audience $24 >100.000
Newspaper ads Upmarket adults $39 >1.000.000
Magazines Upmarket adults $22 >50.000
Outdoor adv. Large $728 >>500.000
Event sponsoring Golf event $500.000 approx 30
Event sponsoring Concerts (popular/stadium) $1.000 approx 40000
Trade show Branded Booth + sponsor $5.000 app. 300 - 5000
Seminar Regional/community $10.000 50 max
Club/comm. Sponsor Business club $50.000 200 max
Club/comm. Sponsor 4th July concert $100 5000?
DM only small $1.100 any number
DM + gift national $3.500 any number
Sales call Phone $10.000 any number
Conclusion: awareness effects vs costs of various
marketing communications tools vary widely.
Selection of optimal tool critical, mass media can be very
efficient if scale, circumstances permit efficient use
15 December 2009 NIMA Expert Class Accountability
16. awareness related to media planning efficiency
€ 1.400.000 100%
€ 1.260.000 90%
€ 1.120.000 80%
€ 980.000 70%
€ 840.000 60%
€ 700.000 50%
€ 560.000 40%
€ 420.000 30%
€ 280.000 20%
€ 140.000 10%
€- 0%
17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 48 50 52 2 4 6 8 10 12 14 16 18 20 22 24
bruto best. Vedior bruto best. Adecco bruto best. Randstad
bruto best. Content bruto best. Manpower bruto best. Start
bruto best. Tempo Team evoked set Randstad 'voor uitzendkrachten' evoked set Adecco 'voor uitzendkrachten'
evoked set Content 'voor uitzendkrachten' evoked set Manpower 'voor uitzendkrachten' evoked set Start 'voor uitzendkrachten'
evoked set Tempo Team 'voor uitzendkrachten' evoked set Vedior 'voor uitzendkrachten'
16 December 2009 NIMA Expert Class Accountability
17. effects can be predicted fairly accurately
Tracked versus Modelled Awareness
actual campaign example
60 1000
50
800
40
Source:
Mindshare ATG 600
Awareness
GRP
30
and KPN
Corporate 400
Marketing
department 20
2000
200
10
0 0
mrt-99
mrt-00
dec-98
mei-99
sep-99
dec-99
okt-98
mei-00
sep-00
apr-99
apr-00
nov-98
nov-99
aug-99
aug-00
jan-99
jun-99
jul-99
jan-00
feb-00
jul-00
17 December 2009 NIMA Expert Class Accountability
GRPs Base Level Frequency Model GRP Model Tracked
18. Spontaneous awareness vs Visits
Númber of Visits
80,00 50
Spontaneous
40 Conocimiento
Spontaneous
Awareness
60,00 Awareness
Espontáneo
Randstad
30
40,00 Randstad
20 Average
20,00 Media
Awareness
10 7 largest
Conocimiento 7
0,00 0 Grandes
Visits needed
a
a
il la
za
Visitas
ag
on
from Prospect to
go
Big city 4 ev
al
el
ra
S
necesarias P a
Big city 1 M
rc
Active client
City 5 Za
Ba
A (media 2003)
City 2
City 3
City 6
City 7
Region
Conclusion: higher awareness = easier sales process effects of
NB: disguised data awareness
Awareness with Decision makers, Relationship of awareness and sales visits mid 2003
Correlation Coefficient = -0.91 PS: measure in terms
of sales costs effect,
18 December 2009 NIMA Expert Class Accountability NOT revenues!
19. effect of Micro Marketing test actions - USA
get get
fill make make
appoint- new Bill !
database calls match
ment order
with media before during campaign
Medium city 1 2,6 1,2
Medium city 2 1,9 1,4
Major city 3 6,6 3,3
control group
Medium city 4 1,8 1,9
Medium city 5 2,7 3,7
19 Major city 6 4,4 4,6
19 December 2009 NIMA Expert Class Accountability
20. examples from Randstad local actions
gross margins
Region 1 (€60K investment) Region 2 (€70K investment)
200 000 € 178 600 € 250 000 €
185 440 € 220 670 €
150 170 € 157 690 €
150 000 € 176 800 € 159 470 € 200 000 €
146 750 € 139 740 €
2004 150 000 € 126 080 € 149 220 € 2004
100 000 € 112 060 €
2005 100 000 € 2005
50 000 € 96 440 € 94 000 €
71 840 €
50 000 € 73 140 €
0€ 0€
Avril Mai Juin Juillet Avril Mai Juin Juillet
Période
Période
Region 3 (€60K investment)
300 000 €
243 770 € 272 880 €
Conclusions:
250 000 € 224 690 € 242 850 €
196 060 €
- sales, margins, productivity in action areas
236 890 €
200 000 €
2004
150 000 € 166 250 €
181 260 €
significantly higher increase than Opco or
100 000 €
2005
market average
50 000 €
0€ -margin boost easily pays for campaign
Avril Mai Juin Juillet
Période
20 December 2009 NIMA Expert Class Accountability
21. conclusions
• it is not difficult…
• but it takes:
• time!
• consistency
• perseverance
• breaking through the silos
• the benefits:
• added up it can make a difference of
50% to 100% in effectiveness
21 December 2009 NIMA Expert Class Accountability
