A Marketing Analytics Framework for CMOs

29 February 2012 ID:G00231661 Analyst(s): Kimberly Collins

VIEW SUMMARY CMOs require insights into a large number of complex marketing processes to make key decisions about execution and operations. A marketing insight team is required to build the analytical framework that drives useful insights for CMOs and marketing leaders.

Overview
This research provides a framework for best practices in applied marketing analytics to support chief marketing officers (CMOs) and marketing organizations. Marketing analysis is complex and varied, with data sources, analytics and metrics varying by each decision or process area that is under the purview of the CMO or head of marketing.

Key Findings

CMOs require a number of executional and operations insights to make marketing decisions that drive effectiveness and improve efficiency. Data sources are varied and do not lie solely in marketing or IT systems. Necessary data also resides in IT systems external to marketing, and with external suppliers such as creative agencies, marketing service providers and third-party data providers. The required marketing analytics to support CMOs vary greatly in sophistication from measurement and reporting through to predictive modeling and constraint-based optimization. CMOs will not have the time or skills to perform all the required analysis.

Recommendations
Create an analytical framework for each key decision or process the CMO needs to evaluate. Assemble a marketing insight team to help plan and execute the required marketing analysis. This will include input from the CMO and other marketing business leaders, as well as a team of statisticians for general analytical skills and specialists for highly specialized analysis areas such as pricing, media buying and lifetime value. Establish a master data management strategy for managing the various sources of data. Create a CMO dashboard with visualization capabilities for the synthesis of the combined analysis for CMOs to obtain relevant and quick access to key insights.

Analysis
CMOs Need Information and Insight
CMOs are under tremendous pressure to be more accountable, measure marketing performance and optimize the marketing mix. They need instant access to information and insight to make more informed decisions, strategically plan and measure return on marketing investments. CMOs require insights into both marketing execution and marketing operations.
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Execution

Analysis of executional marketing processes informs the CMO how well they are executing on their marketing strategy (see Table 1). Processes supported include: Competitive intelligence Creative advertising and media planning Customer life cycle management Customer program management Event management Lead management Market management

Multichannel campaign management Promotion management

Executional Process and Insight Areas Decisions CMOs Must Make Information Sources Required for Decisions Analytical Capabilities Required for Analysis Analysis Feeds These Business Apps

Customer database or data warehouse (e.g., demographic, psychographic, life stage, life cycle, profitability and product/service data) Third-party customer data (e.g., demographic, psychographic, lifestyle and life stage data) Transactional systems (e.g., interaction data) Social media data

Customer Life Cycle Management

Identify customers and customer segments to acquire, retain, grow or allow to leave.

Customer segmentation Customer profitability analysis Predictive modeling for opportunity Retention and attrition analysis Customer profiling and psychometric analysis Social analytics to identify customer wants and needs Reporting and analysis on customer segments or targeted groups (profitability, retention, growth)

Marketing dashboards and performance management solutions Campaign management Contact center desktop agent Sales force automation Operational data store or customer hub Marketing dashboards and performance management solutions Loyalty systems Campaign management Contact center desktop agent Sales force automation Operational data store or customer hub Customer advocacy platforms (e.g., social media or communities)

Customer database or data warehouse (e.g., profitability, loyalty, rewards data) Loyalty database or loyalty providers Transactional systems (e.g., interaction data) Social analysis Campaign database (e.g., campaign type, channels, customer segments targeted) Customer database (e.g., demographic, psychographic, life stage, life cycle, profitability, product/service data) Channel(s) data (e.g., customer response to campaign data) Third party customer data (e.g., demographic, psychographic, lifestyle, life stage data) Marketing services providers (e.g., prospect data or lists) Transactional or interaction data for event-triggering Social media data Creative agencies (e.g., creative costs, media buy and performance information) Interactive or digital agencies (e.g., costs and Customer profitability analysis Predictive modeling for retention and opportunity Customer profiling and psychometric analysis Customer satisfaction and loyalty analyses/indices Sentiment analysis Social media monitoring

Customer Program Management Identify customers for retention, loyalty and rewards programs.

Customer segmentation Predictive modeling to identify opportunities Modeling for event triggers Customer profiling Campaign tracking and measurement Web/contact center analytics for inbound marketing Campaign, channel and offer optimization Text mining for social media

Multichannel Campaign Management

Determine appropriate channels, execute highperforming campaigns, measure campaign performance and optimize campaign mix. Determine appropriate media and content, support media planning and buying, execute advertising campaigns, measure media and campaign performance,

Marketing dashboards and performance management solutions Campaign management Contact center desktop agent Sales force automation Social media (e.g., Facebook, Twitter, LinkedIn) E-commerce Email marketing services providers or systems Direct mail services Customer statements Operational data store or customer hub Marketing dashboards and performance management solutions Media planning tools Agency-based solutions

Media planning and buying analytics Media measurement Media mix optimization

Creative Advertising Campaigns

Executional Process and Insight Areas

Decisions CMOs Must Make optimize media mix.

Information Sources Required for Decisions

Analytical Capabilities Required for Analysis

Analysis Feeds These Business Apps Digital media (e.g., Web, mobile and social) Search marketing

performance data) Media buying outlets (e.g., costs and performance data) Internal advertising departments (e.g., costs, resource and performance data) Media data sources

Promotions Management

Develop, plan, execute and measure promotional activities including instore promotions and promotions via distributors and other partners.

Trade promotion systems CRM systems Marketing systems

Point of sale (POS) and store systems Market data

Promotion planning Demand forecasting Promotion measurement Pricing analysis Revenue/sales and margin analysis Pricing and promotion optimization

Marketing dashboards and performance management solutions Trade promotion systems POS systems Operational data store or customer hub Marketing dashboards and performance management solutions Marketing resource management (MRM) solutions Operational planning systems or corporate performance management (CPM) solutions Campaign management systems Marketing dashboards and performance management solutions Competitive intelligence systems Operational planning systems or CPM solutions

Determine appropriate market opportunities across various geographies and countries, plan and execute market strategies, measure market success. Market data (external or internal) Competitive intelligence systems Customer data warehouse CRM systems Transactional systems Third-party customer data Competitive intelligence systems (e.g., competitive data for market share, revenue, customers, marketing budgets) Market data Sales automation systems Marketing or campaign system (e.g., lead generation, lead qualification, lead routing and lead close data) Sales automation systems or database (e.g., conversion rates and associated revenue) Third-party customer or market data (e.g., prospecting data or lists) E-commerce and social media (lead generation sources) Marketing systems (e.g., campaign and promotion data; lead generation and qualification data) Sales systems (e.g., conversion rates and Market analysis Scenario simulation Demand forecasting Measurements of customer acquisition and revenue growth within region or country

Market Management

Determine primary competitors, develop and execute competitive campaigns, measure competitive position.

Competitive analysis Demand forecasting

Competitive Intelligence

Opportunity analysis Lead scoring and nurturing Lead prioritization and optimization analysis Lead process measurement Web analytics Social analytics

Lead Management

Align marketing and sales to develop a more effective lead generation and management program, and measure lead process.
Develop, plan, execute and measure physical and online events.

Marketing dashboards and performance management solutions Campaign management Sales force automation Contact center desktop agent E-commerce Email marketing systems or services providers

Event Management

Event planning Lead generation measurement Lead close measurement Revenue generation measurement

Marketing dashboards and performance management solutions Sales force automation Campaign management

Executional Process and Insight Areas

Decisions CMOs Must Make

Information Sources Required for Decisions

Analytical Capabilities Required for Analysis Event resource optimization Social media monitoring and analysis for reaction to event

Analysis Feeds These Business Apps

associated revenue) Registration systems (e.g., interest, attendance, show floor traffic) Social media data

Table 1. CMO Insight and Analysis for Executional Processes Source: Gartner (February 2012)

Operations
Analysis of operational marketing processes inform CMOs of how well they are running their marketing organizations, and how well they're optimizing the use of resources (budgets, people, projects, content and assets; see Table 2). Processes supported include: Financial management Marketing content and asset management Marketing fulfillment Project management Resource planning Strategic planning
Operations Process and Insight Areas Decisions CMOs Must Make Information Sources Required for Decisions MRM solutions (e.g., cost and financial data, agency spending, budget information) Marketing systems (e.g., campaign, promotion, event and programs planned) Finance and procurement systems External agencies and vendors (e.g., supplier costs) MRM solutions Campaign management systems Sales automation systems Channel systems Media buying outlets Third-party market and customer data Product and transactional systems Agencies and other marketing vendors Local marketing and partners Financial and CPM systems Operational systems Sales systems MRM solutions (e.g., cycle time, time to complete tasks, skills and team data) HR systems (e.g., recruiting, training, hiring data) Analytical Capabilities Required for Analysis Analysis Feeds These Business Apps

Budgeting Financial analysis Budget resource optimization

Financial Management

Budget for marketing campaigns and programs. Track and manage budget forecasts, committed budgets and actual expenditures.

Marketing dashboards and performance management solutions MRM solutions Finance and CPM solutions Procurement systems Integrated marketing management and campaign management systems

Develop strategic plans, and execute the marketing strategy across the entire marketing mix of campaigns and programs. Align marketing goals with business objectives. Measure marketing performance, and optimize marketing mix.
Plan and allocate human resources based on required skills to support strategic marketing plan.

Strategic Planning

Scenario planning and simulation Forecasting Measurement and reporting Marketing mix optimization Operational and revenue analysis for business goal analysis Return on marketing investment analysis Balanced scorecard metrics

Marketing dashboards and performance management solutions MRM solutions CPM solutions Integrated marketing management and campaign management systems Marketing dashboards and performance management solutions MRM solutions HR systems

Skills analysis HR planning HR optimization

Resource Planning

Operations Process and Insight Areas

Decisions CMOs Must Make

Information Sources Required for Decisions External agencies and vendors (e.g., work and skills outsourced) MRM solutions (e.g., cycle time and task data) Campaign management systems (e.g., campaigns planned) Agencies Compliance and regulatory systems (e.g., team members, reviews and approvals tracking and auditing)

Analytical Capabilities Required for Analysis

Analysis Feeds These Business Apps Integrated marketing management and campaign management systems

Cycle time analysis Alerting for overdue or upcoming tasks Compliance monitoring and auditing

Project Management

Manage marketing projects from idea to execution for programs, campaigns, creative work and product launches.

Marketing dashboards and performance management solutions MRM solutions Integrated marketing management and campaign management systems Marketing dashboards and performance management solutions MRM solutions Sales force automation or sales content management systems Partner relationship management (PRM) or partner systems Campaign management Lead management systems Print vendor systems Media outlets Marketing dashboards and performance management solutions MRM solutions DAM or ECM repositories Integrated marketing management and campaign management systems

MRM solutions (e.g., content usage and effectiveness, template usage, reuse data) Local or field marketing systems (e.g., usage data) Partner systems (e.g., usage data) Agencies (e.g., cost and distribution data) Brand compliance monitoring Content usage analysis Dynamic content customization or localization Language and currency translation analysis Personalization

Marketing Fulfillment

Manage brand compliance, measure content usage and effectiveness, and customize or localize content.

MRM solutions (e.g., percentage of content in repository, content update data, reuse data) Digital asset management (DAM) or enterprise content management (ECM) systems Agencies (e.g., cost data)

Marketing Asset and Content Management

Asset and content reuse analysis Agency spending analysis

Store and reuse content.

Table 2. CMO Insight and Analysis for Operational Processes Source: Gartner (February 2012)

Analytical Support for the CMO

CMOs will require quick access to information and insights to inform them of marketing strategies, executions and operations. However, most CMOs will not be able to spend time performing in-depth or advanced analysis, nor would many have the required skill set for advanced analysis. Therefore, CMOs will require support from others in marketing and IT to provide the necessary information and insights for them to make critical decisions for marketing. Support will be required from the following: Vice presidents (VPs), directors and managers (direct CMO reports): Direct reports to the CMO need to provide strategic input into their respective roles and functions within marketing. They will also need to help define key performance indicators (KPIs), key analytics and required data from their respective areas. These direct reports can include the directors, senior VPs (SVPs) or heads of database marketing, creative advertising, digital marketing, social strategy, product marketing, loyalty programs, competitive/market intelligence, event marketing, promotion management and customer value or life cycle management (see "How Analytics Helps Consumer Goods Brand Managers With Marketing Mix Modeling").

Other business leaders: CMOs must work with other business leaders such as the CFO and heads of customer service, sales, e-commerce and customer experience to align business goals and measure marketing's objectives across business domains. Analytical specialists: Specialists will be needed to perform analysis in highly specialized areas. These may include customer profitability or lifetime value analysis, pricing, media planning, promotion planning, market analysis, customer segmentation or profiling and demand forecasting. Business analysts: A group of general Ph.D.-level statisticians may be required to leverage general data-mining and predictive-modeling tools to support varied analyses. These may include churn, next most likely purchase, scenario planning, marketing performance management and marketing optimization.
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Sources of Information
One of the biggest challenges for CMOs will be data fragmentation across silos within marketing, within the company but external to marketing, and outside the company with partners, distributors, agencies and other suppliers. A sound data integration and metadata strategy will be required to ensure accurate, reliable and consistent analysis and derived insights. The CMO may want to have the marketing operations director or another dedicated resource work directly with the CIO and IT to develop a cohesive data strategy for marketing to support its analytical requirements.
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Analytical Capabilities
A wide range of analytical capabilities will be required to support the CMO's insight initiative. These range from basic reporting to predictive modeling and optimization. Marketing organizations must ensure that they have the appropriate analytical resources available to support the following types of analysis: Data mining Forecasting Measurement and reporting Optimization Predictive modeling Simulation Visualization
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CMO Dashboard
The marketing analytics team should work together to create the necessary insights for the CMO. The marketing operations director or head of the business analyst group should work with the CMO to create a dashboard the CMO can access to gain quick insights. This dashboard should provide some level of visualization technologies, including point-and-click analysis (see "Twenty-Two CRM Marketing Insights to Consider for the CMO Dashboard").
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