How advertising drives consumer feelings and behavior towards

How advertising drives consumer feelings and behavior towards

How advertising drives consumer
feelings and behavior towards sales
Prof. Dr. Koen Pauwels
Ozyegin University
Marketing builds attitudes, which convert to behavior
Current Road-to-Purchase has slow moving
attitudes and fast online actions
DO
KNOW
Search
LIKE
COGNITION
Click
AFFECT
Aware
Visit
Prefer
Web visits
Loyalty
Consider
Buy
Experience
& Express
Therefore, you should
1) Measure how marketing affects consumer
attitudes and/or online behavior
2) Act (experiment) based on these insights
3) Communicate this value to your clients &
peers
Therefore, you should: M A C
1) Measure how marketing affects consumer
attitudes and/or online behavior
2) Act (experiment) based on these insights
3) Communicate this value to your clients &
peers
Road to purchase for a chocolate brand
0.73
TV
0.70
0.12
Awareness
Branded Search
0.67
0.03
0.49
2.05
0.05
0.56
0.06
Number of Visitors
Preference
Negative Web
Print
0.06
0.02
Generic Search
Usage
-0.01
0.13
Promo
0.70
0.12
0.27
Volume Sales
Price
Positive Web
-2.44
Notes: Numbers are elasticities: e.g. if TV expenditures increase by 1%, volumes sales increase on average by 0.01%
Numbers are netto effects: indirect effects can not be added to direct effects, as they may already be part of the direct effect!
0.06
So Influence social media with paid marketing
7
We show that marketing can drive sales
through Social Media WOM & Search
TV
Social Media
WOM
Offline Sales
SEM
Natural
Search
Print
Online Sales
Radio
8
2) Act / Experiment based on insights
• Digital makes it easier to experiment:
a) Tactically: customized ads & landing pages
b) Strategically: Online budget re-allocation:
improve performance 20-40% with same budget
Real-time feedback: the multi armed bandit
b) Strategically: Field Experiment
Google Adwords
Direct
Mail
High
Base
Base
Group 1
Control
Low
Group 2
Group 3
| 12
Net Profit Change: 17 x higher
Adwords
Direct
Mail
High
Base
Base
€ 81.39
€ 10.84
Low
€ 153.71
€ 135.45
3) Communicate in simple decision tools: a slide bar
13
Heatmaps explore feasible profit lifts
Heat Map of the Interaction of Two Marketing Variables on Profits
Price in $
#REF!
10
15
20
25
30
35
40
45
50
55
60
65
70
75
0.02
1.04
1.92
2.64
3.22
3.65
3.93
4.06
4.04
3.87
3.56
3.09
2.47
1.71
250
0.65
1.68
2.56
3.28
3.86
4.29
4.57
4.70
4.68
4.51
4.19
3.73
3.11
2.35
500
1.25
2.27
3.15
3.87
4.45
4.88
5.16
5.29
5.27
5.10
4.79
4.32
3.70
2.94
750
1.79
2.81
3.69
4.41
4.99
5.42
5.70
5.83
5.81
5.64
5.33
4.86
4.24
3.48
1000
2.28
3.30
4.18
4.91
5.48
5.91
6.19
6.32
6.30
6.13
5.82
5.35
4.73
3.97
1250
2.72
3.74
4.62
5.35
5.92
6.35
6.63
6.76
6.74
6.58
6.26
5.79
5.18
4.41
1500
3.11
4.13
5.01
5.74
6.32
6.74
7.02
7.15
7.13
6.97
6.65
6.18
5.57
4.80
1750
3.45
4.48
5.35
6.08
6.66
7.09
7.37
7.50
7.48
7.31
6.99
6.52
5.91
5.14
2000
3.74
4.77
5.65
6.37
6.95
7.38
7.66
7.79
7.77
7.60
7.28
6.82
6.20
5.44
2250
3.99
5.01
5.89
6.62
7.19
7.62
7.90
8.03
8.01
7.84
7.53
7.06
6.44
5.68
2500
4.18
5.21
6.08
6.81
7.39
7.81
8.09
8.22
8.21
8.04
7.72
7.25
6.64
5.87
2750
4.32
5.35
6.23
6.95
7.53
7.96
8.24
8.37
8.35
8.18
7.86
7.40
6.78
6.02
3000
4.42
5.44
6.32
7.05
7.62
8.05
8.33
8.46
8.44
8.27
7.96
7.49
6.88
6.11
3250
4.46
5.49
6.36
7.09
7.67
8.10
8.38
8.51
8.49
8.32
8.00
7.54
6.92
6.15
3500
4.46
5.48
6.36
7.09
7.66
8.09
8.37
8.50
8.48
8.31
8.00
7.53
6.91
6.15
3750
4.40
5.43
6.30
7.03
7.61
8.04
8.32
8.45
8.43
8.26
7.94
7.48
6.86
6.09
4000
4.30
5.32
6.20
6.93
7.50
7.93
8.21
8.34
8.32
8.15
7.84
7.37
6.75
5.99
4250
4.14
5.17
6.04
6.77
7.35
7.78
8.06
8.19
8.17
8.00
7.68
7.22
6.60
5.84
4500
3.94
4.97
5.84
6.57
7.15
7.57
7.85
7.98
7.97
7.80
7.48
7.01
6.40
5.63
4750
3.69
4.71
5.59
6.32
6.89
7.32
7.60
7.73
7.71
7.54
7.23
6.76
6.14
5.38
5000
3.38
4.41
5.29
6.01
6.59
7.02
7.30
7.43
7.41
7.24
6.92
6.46
5.84
5.08
TV advertising in thousands of $
0
Visualize effectiveness over time
15
Compare profit from saved scenarios
| 16
Case : Advertising Response in Emerging vs Mature Market
category 1
0,020
0,015
AD AWARE
Emg > Mature
0,010
0,005
0,000
0,008
CONSIDER
Emg << Mature
0,006
0,004
0,002
0,000
0,012
LIKING
Emg << Mature
0,010
0,008
0,006
0,004
0,002
0,000
category 2
TOTAL
Sales Conversion in Emerging vs Mature Market
category 1
0,05
0,04
0,03
AD AWARE
Similar
0,02
0,01
0,00
0,20
0,15
CONSIDER
Emg > Mature
0,10
0,05
0,00
0,25
0,20
LIKING
Emg << Mature
0,15
0,10
0,05
0,00
category 2
TOTAL
Love Marks or Safe Bets ?
Low response to
marketing
High response to
marketing
Low sales conversion
High sales conversion
Liking Emerging
Consideration Emg
Awareness Mature
Cost More Mat (-)
Consideration Mat
Liking Mature
Awareness Emg
Cost More Emerging
Want to learn more? My new book:
It’s not the Size of the Data, it is How You Use it:
Smarter Marketing with Analytics & Dashboards
• Available at: http://www.amazon.com/Its-Not-Size-DataHow/dp/0814433952
• Facebook: https://www.facebook.com/pages/Smarter-Marketingwith-Analytics-Dashboards/586717581359393
•Q
U
E
S
T
I
O
N
S
?
THANK YOU FOR YOUR ATTENTION !