Why Read This Report

To ensure continued success in this age of increasingly fragmenting audiences and multiplying communication platforms, marketers need to adapt their strategies and tactics to optimally allocate their budgets across channels and track the effectiveness of their spending against specific business outcomes. In this report, we introduce our marketing mix optimization maturity model and an assessment tool that will help CMO and marketing leadership professionals understand how ready their marketing team is to plan and take full advantage of a marketing mix optimization initiative and refocus their marketing investments based on expected business outcomes.

Intelligent resource allocation demands a new marketing ecosystem

Today’s consumers have more choice and control of how they engage with brands and marketing channels than ever. While consumers love to access anything from anywhere, this trend makes the marketer’s job exponentially harder and more complex. Marketing needs to be smarter, more relevant, and focused on effectively reaching customers across channels and platforms. Being able to optimally allocate marketing resources across channels and accurately account for the marketing effect on key performance indicators (KPIs), such as revenue, is a top concern for senior marketers.

Marketers should address these challenges by thinking about the key drivers — people, processes, and technology — that will enable marketing teams to effectively optimize marketing spend across the mix:

• Orchestrate the right people across teams. To adopt a successful culture for marketing mix optimization (MMO), marketing practitioners who have traditionally allocated marketing budgets based on past performance need to start injecting data and analysis into all facets of their spending decisions. As such, existing planning mental habits and approaches need to be challenged and rethought. Senior marketers must act as change agents within their organization to foster heightened collaboration between brand and analytics teams, educate executive management on the value of optimizing the marketing mix, and incentivize practitioners to focus on a holistic view of marketing interactions across multiple customer touchpoints.
• Redesign siloed processes. Most marketing planning is still done in silos that rely on campaign- or channel-level optimizations to make slight tweaks, without a real understanding of the mutual influence that different channels have on each other. Senior marketers must work to break down monolithic marketing processes, inject customer data and insights into decision-making, broaden the scope of optimization to multichannel attribution, and quickly test and measure the value of new marketing channels.
• Streamline data and insights through multiple technology platforms. Enabling data-driven marketing allocation decisions and facilitating a faster gleaning of planning insights demands the deployment of a robust and flexible marketing technology platform. Senior marketers need to work with IT and customer intelligence (CI) professionals to ensure that marketing and customer data are collected across multiple customer touchpoints, are stored in accessible, standardized formats, and can be readily accessed by planning and analytics teams to develop actionable insights and make data-informed investment decisions.

Introducing Forrester’s MMO Maturity Model

Effectively optimizing budgets and resources across the marketing mix is no easy task. When done well, a marketing team effectively allocates its resources and activates assets along the customer journey and can reliably tie marketing spend across channels to quantifiable business outcomes. However, this is an exceedingly mature scenario that not all firms can measure up to today. With regard to their marketing optimization readiness, companies typically fall into four stages of maturity:

• Guess-timators. In the first stage of maturity, companies are aware of the need to adapt their marketing strategies and reallocate budgets, but they lack the organizational framework, processes, and technological infrastructure to execute on these needs. Rather, guess-timatorlevel companies make marketing decisions based purely on instinct, activity of competition, and prior marketing budget allocations. Senior marketers at these companies should focus on routinizing the gathering and organization of customer data sets, evangelizing the need for a new strategy to executives, brand teams, and data and analytics teams.
• Advice seekers. In the second stage of maturity, companies establish a fresh framework that places their customers’ journey at the center. Advice seekers are not quite ready to leverage hard data sets to make decisions but understand and believe in the value of broadly optimizing the marketing mix. Senior marketers at these companies should focus on feeding customer data sets, amassed from campaign-level insights and optimizations and basic demographic information, into Forrester’s interactive marketing ecosystem to create a unique ecosystem view of their target audience. Advice seekers are not mature enough to create a full-blown marketing mix model but can start by asking the right questions and building the foundations for adopting a data-driven approach that can ensure they are reaching the right audience, with the best available platform for the job.

Want more like this?

Want more like this?

Insight delivered to your inbox

Keep up to date with our free email. Hand picked whitepapers and posts from our blog, as well as exclusive videos and webinar invitations keep our Users one step ahead.

sign up

By clicking 'SIGN UP', you agree to our Terms of Use and Privacy Policy



SIGN UP

By clicking 'SIGN UP', you agree to our Terms of Use and Privacy Policy

• Spreadsheet junkies. At the third stage of maturity, companies start to build sophisticated quantitative frameworks to understand how their marketing efforts perform as a whole. Spreadsheet junkies collect, standardize, and analyze first- and third-party marketing and customer data as a stepping stone to build marketing mix models that accurately describe how past spend performed, ascertain successful or failed investments, and learn how marketing channels historically work together as levers on business performance. Senior marketers at these firms live and breathe data. They rely on it to validate all investments, quantify performance across all channels, and measure marketing’s quantitative effects on the business.
• Predictive analyzers. At the fourth stage of maturity, companies have developed detailed processes and standards for marketing and CI to collect data and have marketing mix modeling tools and technologies that are fully deployed across the organization and at partner agencies. Predictive analyzer companies focus on increasing speed to insight and making sure that the planning and budgeting teams act on the insights from the model. Companies at this stage of maturity understand past drivers of performance and utilize their model’s speed and agility to predict hypothetical outcomes from scenarios and dynamically optimize budgets across channels.

Marketers should start their MMO journey by determining their organization’s current capabilities. Assess your maturity and readiness using Forrester’s three-stage maturity model. Evaluate your current standing with marketing optimization practices — people, process, and technology. Once you calculate your assessment score, identify your maturity stage with the matching score range and graduation criteria (see Figure 1).

[Download PDF to see Figure 1]

Use The Maturity Assessment As A Road Map And Benchmarking Tool

Forrester’s maturity assessment is built to support ongoing benchmarking and act as a road map to the next stage of readiness. As you progress on your journey, use the assessment tool to track progress over time in gap areas and identify areas to allocate additional labor and resources. Forrester recommends regularly rescoring your maturity via the assessment tool to stay on track with organization development and adoption of MMO practices.

Achieve Maturity Through Collaboration and Education

On the path to MMO, organizations will progress from defining customer-centric allocation strategies to integrating data and insights into all marketing resource allocation decision-making. To progress across maturity stages, senior marketers should:

• Foster a stronger relationship between marketing, CI, and IT. Marketing, CI, and IT have historically not had much overlap or interaction in day-to-day operations. However, the central core of MMO is built upon a close-knit relationship among all three functions that emphasizes seamless access to and sharing of data, insights, and best practices across teams. Strengthening these strategic relationships will also help when evaluating tools and technologies to adopt to manage data and share insights.
• Educate executive management for a smooth progression. MMO requires a sea change of thinking in terms of processes, goals, and mentality at each step. To gain the buy-in from members of the executive team, marketers should focus first on smaller solvable issues, like a single brand, market, or customer segment, to show positive results early on. Once you have the attention of the executive team, you can develop a road map to progressively broaden your scope and further link investment allocations to business outcomes. Although MMO has demonstrable value and can be proven with results, adopting a new way of planning and allocating will have to address entrenched interests and will demand senior executive support to be successful.
• Partner with mix modeling vendors to address maturity gaps. Marketing mix modeling vendors, like MarketShare and the Mobile Marketing Association, can be invaluable partners as your organization progressively embraces MMO. As partners to help with change management, third-party vendors can bring to the table established best practices and effectively communicate MMO’s benefits to different internal stakeholders like the chief financial officer or the chief operating officer. They can also help at different stages of maturity, from standardizing data collection formats to building robust mix models that integrate multiple variables to accurately define drivers of success.