What Doesn't Get Measured...

... doesn't get managed.

marketing-roi

This was too good to not share. Credit goes out to Tom Fishburne from the Marketoonist.


When it comes to the marketing field, I've always found it quite interesting that to many people, the term "marketing" is synonymous with "advertising". In other words, these folks think marketing is all about coming up with a well-designed ad and spreading to the word about a business or brand.

Yes, advertising is an aspect of marketing communications. Yes, it's important to communicate your value proposition to drive short-term sales and build long-term brand equity, but if you're not measuring your marketing campaigns, how do you know if your marketing dollars are being utilized in an optimal way?

Unless you're living in a world where money grows on tress, there's normally a limit to your marketing budget. With that being the case, resources have to be used in the most effective manner possible. In order to increase the return of investment (ROI) of the marketing campaigns, marketers and marketing researchers utilize a variety of methodologies, from marketing mix modeling to brand equity trackers, to evaluate marketing effectiveness.

As useful as some of the above-mentioned methodologies are to help maximize your marketing ROI, you need to established what your current ROI is. To those aren't familiar with the concept of ROI, the essential ROI formula equals to net profit (from a certain marketing campaign) divided by investment amount (for said marketing campaign) multiplied by 100 (ROI's expressed as a percentage). An ROI of 0% is your break-even point and an ROI of 100% means that you doubled your money. I would suggest using Microsoft Excel or Google Sheets for the calculation and easily creating a chart to visualize the data.

While the idea of ROI starts to become a little fuzzy around branding, you want to keep your pre-established key performing indicators (KPIs) for the business in mind and work towards meeting the goals for these KPIs.

The moral of the story - marketing isn't just about creating pretty ads and promoting them.

Marketing's both a science and an art, requiring creativity in producing out-of-the-box strategies, but also analytical rigor to measure what works and what doesn't. Don't let your marketing dollars go to waste.

eSports, Graduation, and Miami

The last couple weeks have been a whirlwind.

Not only was I inundated with final exams, group presentations, and my capstone project to wrap up my Masters program, but having also recently landed a position with Universal Music Group in Miami, I had to find a place to live & coordinate my move from Madrid to the Sunshine State which had to happen before my graduation ceremony!

eSports

The first thing on the agenda was the capstone project. The Market Research and Consumer Behavior Masters program at IE requires a final 8-week project, which allows students to integrate all the knowledge and skills that were mastered during the program, to develop a unique solution to a real-world challenge provided by the client. My six-person consulting team was assigned the task of validating current business drivers and gauge new opportunities within the eSports industry in the Peruvian market.

I had heard of the term "eSports" here and there before the project, but I can honestly say that didn't know much.

I knew of PewDiePie, who's currently the most subscribed-to YouTube personality (for the sake of comparison, he currently has a whopping 64 million subscribers while Beyoncé has 17 million), and his rise to fame on the platform from video content in which he would document the playthrough of video games while including commentaries and reactions as he played through them.

I also knew of Twitch, the Amazon-owned video game live streaming video platform, but I couldn't come to grasp the interest in the platform. I couldn't understand why someone would want to spend time watching someone else play a video game. Then I thought back to my younger days (when I was a bit more into video games). I remember having just a good of a time watching my friends play Super Smash Bros. instead of playing. I didn't need to be playing to have a fun experience with the game itself.

As I came to find out, eSports is considered competitive gaming at a professional level and in an organized format (a tournament or league) with a specific goal (i.e., winning a champion title or prize money) and a clear distinction between players and teams that are competing against each other. The eSports industry is also rapidly growing. In the coming year, the global eSports economy will ballon to $905.6 million, up 38% YoY and, according to market research firm Newzoo, the industry is currently estimated to reach $1.4 billion by 2020.

Overall, this was a fascinating project to work on. The industry growth figures were pretty impressive, so I'll be keeping a close eye on eSports moving on. Being that our presentation to the Telefónica team took place on July 5th and was hired to start my new position with UMG on July 10th, I had to fly out Miami the day after our presentation. Not much time to celebrate, but there was plenty of time down the road for that.

Graduation

After setting up shop and getting settled in Miami for about two weeks, I had to fly back to Madrid for graduation.

The jet lag was awful, but there were no regrets in my decision to fly back out for graduation. Being that I graduated early from high school and that I had to travel during my Bachelors graduation ceremony from LMU, I hadn't graduated on stage since kindergarten. That being the case, my family really appreciated seeing me formally receive my diploma in the traditional graduation get-up and what not.

 
 

It was a quick four days back in Madrid, but I now officially have my Masters in Market Research and Consumer Behavior. Feels good to write.

Madrid - it's been great, but onto the next chapter...

Miami

I'm now back in Miami.

I swear, every time I hear "Miami", I think - palm trees, cuban food, and Will Smith (yes, I'm an 80's baby and very clearly remember the chart-topping single from The Fresh Prince). A friend had also recommended that I check out the HBO series, Ballers, which is set in Miami. I'm not a huge Dwayne Johnson fan, but the trailer looks pretty good.

I can't say I would have imagined relocating here prior to my position with UMG, but I've lived by the ocean for the majority of my life (with the exception of Outat El Haj and Madrid) so I thought "why not?".

My first non-consecutive three weeks at Universal Music have been wonderful. I have a good grasp of the business side of things and I'm now learning the proprietary insights tools I'll be using for work. I also went to my first concert (Pusha-T at Story) and my first work-related show last night (Nacho at The Fillmore). All in all, everything's been great and Miami's starting to feel like home. More updates to come.

 The view from our office.

The view from our office.

Adventures in Taste Testing for New Product Success

You know how people say the devil is in the details? Well, that couldn't be truer than with taste testing.

During college I participated in my fair share of paid food research studies (which was a great way to make a quick buck as a college student btw). While I took part in these taste testings, I never really gave much thought to the complexity of the research until years down the line when I decided to conduct taste tests for a food product I was considering bringing to the market.

As with most consumer usability testing, consumer taste research design is pretty complex. Some of the considerations include testing location, in addition to whether you want to reveal the product brand, conduct the research with a group of people verses one person at a time, and who exactly you're going to be recruiting for the study. Mike Burkenbine and Kathryn Korostoff do a great job at breaking down some of the research details below.

Some of the key take-aways from the video include:

  • In-facility testing is vital. In-store/in-restaurant should be conducted as a second part to the research.
  • "People eat with their eyes" - be weary of variables, whether it be the color of the packaging or serving utensil, that might affect gustation via vision, audition, olfaction, and somatosensation.
  • Ethnographic research might be best for packaged products that are made to be used at home (e.g. frozen meals).
  • Conduct blind testing first to check if the target market likes the product, then conduct further branded testing to check brand association.
  • Beware of regional differences in taste preferences.

If you've ever wondered how CPG companies and restaurant chains what food and beverage products to sell (and mitigate some of the business risk of launching a potential flop), consumer taste testing is the way to go.

UMG & Marketing in the Music Industry

Mixing Board

I've been completely infatuated by the business of entertainment for some years now. As I reflect on my interest in this industry, I can boil it down to a couple points:

  • Monetizing intellectual properties as a form of passive income
  • The growth of media streaming platforms & their business models
  • New technologies causing a shift in consumer behavior as it pertains to media consumption (I'm looking at you, Alexa

The entertainment industry is undergoing major changes and it's all pretty exciting. 

In the back of my mind, I knew I was going to end up working in the industry soon or later. Guess it looks like it'll be sooner than later.

I'm proud to announce that I'll be working as an Artist Brand & Insights Strategist at Universal Music Group starting next month.

As I wrap up my grad program and gear up for my new role, I've been studying up on the industry. In doing so, I came across Bobby Owsinski's Inner Circle music podcast - a highly recommended podcast series for anyone interested in the music industry. In the episode below, industry veteran & Music Executive Ted Joseph talks about radio promotion, retail store co-op advertising, and more during his time as Head of Marketing at Warner Music.

Why StartUps Suck At Marketing

If you're at least somewhat familiar with digital marketing or SEO, I'm sure you've come across one of Moz's Whiteboard Friday tutorial videos at some point. From strategic online consumer behavior videos to more technical keyword targeting tutorials, Moz's weekly video series has been providing undeniable value to the beginner-to-intermediate digital marketing practitioner that's looking for easy-to-understand information on just about any SEO-related topic.

Rand Fishkin

In front of the camera during his tenure at Moz has been Rand Fishkin. Co-Founder and previous CEO of Moz, Founder of SparkToro, Author of the recently published "Lost And Founder", speaker, & blogger - the man has achieved monumental success in the SEO business and is today one of the leading authorities in digital marketing.

Last week, the IE Marketing Club had the pleasure of hosting the SEO Wizard himself, who gave an enlightening presentation on "Why Startups Suck at Marketing". The event at IE was a couple months in the planning, so we were pretty excited for the day to come and have Rand share his wealth of experience and knowledge with us.

According to Rand, the 8 ways startups suck at marketing are:

  1. Terrible names
  2. Overvaluing 1st exposure
  3. Chasing growth hacks
  4. Saving marketing until launch
  5. Relying on paid ads
  6. Not prioritizing an easy-to-reach audience
  7. Failing at funnel fundamentals
  8. Ignoring brand

I'm sure the presentation served as a precursor to what I'm going to find in his book (just ordered my copy a few days ago). Being a Marketer and having previously launched a few businesses of my own, I'm certain I'll find Rand's book just as valuable as his Whiteboard Friday videos. For some marketing wisdom (and a sneak peak at Rand's book), swing by Moz's blog post in which Rand shares his best advice from a decade and a half of marketing Moz or listen to the audio version below.

 
 

"Satisficers"

It's quite fascinating to reflect on how irrational people can be.

And it's perfectly normal to be irrational. We can't be completely rational all the time right? 

This irrationality is part of our bounded rationality. According to Herbert Simon, recipient of the Nobel Prize in Economics in 1975, people have cognitive limitations and because of that, we go about making sub-optimal decisions in our everyday lives. Through this lens, people unconsciously act as "satisficers" in their decision-making, seeking to make a satisfactory decision instead than an optimal one. In order to facilitate the decision-making process, we act on instincts, habits, heuristics, cognitive illusions, and biases - leading us to "satisficing" decisions.

This is innate within all people. During this unconscious part of the decision-making process, we formulate stories - stories that support our beliefs.

Thomas Gilovich, Author and Professor of Psychology at Cornell University who has contributed to the behavioral economics field, describes these stories as a result of "Patternicity", the tendency to create meaning from events. While this evolved trait (think hunter-gatherers hearing rustling in the grass and believing it might be a predator) greatly served our ancestors, "patternicity" leads to irrationality, poor decision-making & bias.

While the topic of ethics relating to behavioral economics makes for another blog post, marketers have been using the underlying biases in "satisficers" to create effective marketing campaigns advantages for decades. From loss aversion to anchoring, there are plenty of biases for marketers to utilize. With that being said, potential consumers can offset this targeting by being "intuitive scientists" - a nice little secret from Thomas in the video above.

 Image Credit:  Behavioral Scientist

Image Credit: Behavioral Scientist

Snapchat & A Mid-Term Surprise

It goes without saying - time has a tendency to fly by.

Snapchat Presentation

We wrapped up our second term in the Masters program last week, which felt surprisingly shorter than the first term. Both terms were both the same length of time, but I think there was a handful of reasons why this term felt so much shorter. Beside the fact that I've been keeping a bit busy with juggling school, my work with Inside ETFs, being an IE Marketing Club Officer, in addition to keeping a social life and sustaining a steady weekend workout regimen, I felt better prepared for this term than the first. Time management has always been a personal forté, but this time around I felt like I had a better grasp of how the program courses were going to be run, the potential workload, and my classmates (which whom I was going to be working with in our assigned team for the classes for the duration of the term).

Nevertheless, it was still a demanding couple of months.

One class in particular - Managing the Customer, taught by stock market investor, entrepreneur & activist, Pedro David Sañudo - was a bit brutal to get through (it was an intense. week-long crash course), but enlightening. Our team project consisted of implementing a Customer Management Framework to a company of our choosing. Being that Snapchat was undergoing a backlash from users because of its latest app redesign, we thought it'd be the perfect chance to work on a current customer-related issue.

Funny enough, I had coincidently opened up my Snapchat app at a concert a few days prior to our selection of the company for the project, and had absolutely no idea what was going on. You could say that, along with the 1.25 million users that petitioned for Snapchat to revert back to its old design, I wasn't intially very enthusiastic about the new app design. Our team used the CMF to dive into all customer phases: development, creation, growth and retention. With a focus on retention, we provided suggestions for Snapchat to retain their core users. Being that I had previously worked on the initial stages of an entrepreneurial project based the Snapchat advertising platform, this was an enjoyable project.

Kantar Millward Brown Business Challenge

All in all, it was an extremely insightful term.

A plus - my first term group and I received a little surprise from the Kantar Business Challenge we won last December. Receiving the plaque was quite an honor. It's a nice to receive a little recognition for hard work.

Now that I'm on spring break, I've been looking over syllabi for the upcoming third term and I gotta say, I'm pretty excited. We're going to be covering Behavioral Economics (big Dan Ariely fanboy here), Neuromarketing, Anthropology, and Customer Experience to name a couple of topics. The third term is also going to consist of the term-long Telefonica Integration Challenge, the capstone project for the Master in Market Research & Consumer Behavior where we'll be examining business needs, translate them into desired research methodologies, conduct research, analyze research results, and propose effective/viable business solutions for Telefonica. Couldn't feel more ready to tackle this!

Anyway, I'm off to Morocco to enjoy some home-cooked couscous in a few days.

Here's to crushing the next term.

MRCB-01 Group Photo

Stream On

Spotify: One of the handful of monthly subscriptions I don't mind dishing out a few bucks for. While most on-demand video-streaming services rely on new content to draw viewership, the consumption of music on the Spotify platform relies on its back catalog, hence its significant marginal costs - the royalties it pays the music industry.

The music-streaming company filed to go public last week. With competition like Amazon Music and Apple that have an overwhelming amount of financial backing, in addition to the cost of revenue that Spotify has to pay to record labels, it's going to be interesting how Spotify navigates the music-streaming seas. At the same time, there's potential to leverage the data acquired from their platform (I recently saw a tweet that mentioned that Metallica was adjusting their concert playlist in particular cities based on local Spotify listening data) and for the company to launch its own record label. Whatever the case, Spotify's expected to make a big splash when its shares begin trading.

In light of the upcoming IPO, I thought it was worthwhile to share a bit about the business.

Skittles & The Solution To Cognitive Overload

Firstly, happy holidays! I'm visiting family here in Stockholm, and I'm sitting here early xmas morning, reflecting on the last couple of months. As mentioned previously, I'm currently working towards getting my Masters in Market Research and Consumer Behavior and I just wrapped up my first term last Friday.

The program has a heavy focus on group projects, one of those being the Millward Brown Business Challenge this last term. The case, which involved the evaluation of a Skittles advertisement, was given to us, along with the case prompt & real supplemental primary and secondary research from Kantar Millward Brown, on a Friday. We had to present our conclusions and next steps to a panel of market research experts the following Monday. Saying that it was an intense weekend would be an understatement. Anywho, looks like christmas came a bit early (we found out that we won the challenge last week).

One of the supplemental research documents given to us for the challenge was an eye-tracker analysis for the advertisement. The technology's quite fascinating. According to Jaime Veiga, marketing professor at IE, we come across 4,000 to 10,000 brand impressions a day. At a supermarket, we have 30,000 to 50,000 products to choose from. Due to the cognitive overload we come across in our everyday lives, brands are failing to connect with potential customers. How are brands supposed to connect with their customers when it seems like every brand is trying to yell over the other in a crowded room? The solution - optimization via biometrics.

During the term, I had the chance to sit in on a talk led by Thomas Ramsoy, Founder and CEO of Neurons Inc, a Neuroscience consultancy company, where I first saw the eye-tracking technology in action.

Eye-tracking technology

Purchasing decisions happen in fractions of a second. To capture the attention of customers, brands have to understand how consumers think. Although traditional market research methods help gather consumer information to provide insights, new technologies like EEG scanners or eye-tracking devices provide measurements to how the brain and/or the body reacts to marketing stimuli. According to Thomas, these technologies can predict an accuracy of about 80%. With that being said, I can't wait for my neuromarketing class in the third term.

Overall, it was a great first term. Lots of ups and downs, but a learning experience nonetheless. In 2 weeks, I'll be starting up my second term. Some of the classes include:

  • Consumer Decision Making
  • Managing The Customer
  • Marketing Products & Brands
  • Observational Methods
  • Product Launch Simulation
  • Understanding Consumer Behavior II

I'm going to take the next two weeks to get some much needed R&R to get ready to crush this next term. See you guys in 2018!