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The Smart Cube helps a leading global food and beverage company optimise over $250 million of media spend
Leading global food and beverage company
Consumer Packaged Goods
- Provided insight into over $250 million of multi-market cross-category media spend
- Identified a $3.5 million opportunity to reallocate marketing spend
- Delivered 15-25% additional ROI through long-term insights into brand equity
- Scaled up marketing mix support from one to 10 markets covering brands from both the snacks and beverages portfolios
When you’re one of the biggest brands in the world, getting your marketing strategy right is an essential part of ensuring ongoing success. Our client, a global food and beverage giant, has 20+ brands that sell more than a billion products a day in over 200 countries and territories.
Looking to fuel more robust, impactful and data-driven marketing strategies, the client wanted insight into how its marketing mix impacted ROI. The ultimate goal was to make better use of annual budgets and optimise investments in the right marketing channels at the right time.
In 2017, the company reached out to The Smart Cube to develop a proof of concept (POC) for assessing and optimising its marketing investments as part of a wider Revenue Growth Management solution.
What began as a POC in a single region has since expanded. Today, our combination of artificial intelligence and human intelligence is providing insights into snacks and beverages categories in regions from Asia-Pacific to the Americas.
The Smart Cube solution
Most marketing mix modelling (MMM) approaches focus on the effect a channel or campaign has on sales. However, our client knows that marketing also has a long-term impact on brand equity, which in turn further influences ROI.
This posed an interesting challenge for our data scientists: how can we provide long-term impact through brand equity in addition to conventional ROI measurement?
We began by establishing a yearly MMM study of the client’s key brands across 6-8 strategic geographies, delivered by a team of senior analysts with extensive experience in the CPG sector.
This team works closely alongside the client’s business teams to understand market specific information, compare performance across geographies, manage expectations and deliver actionable insights.
We also work closely with the client’s data teams to gather and validate the requisite data for the insights we need, combining structured historical data and a wealth of unstructured and semi-structured sources. This includes information on:
- Pricing and promotions
- SKUs and distribution
- Marketing channels (TV, Radio, Print, Digital, etc.) and campaigns
- Sales figures
- Brand equity KPIs
- Media spend, Gross Rating Point (GRP) and impressions
- Social media (sentiments, search trends, etc.)
- Weather patterns and holiday seasons
- Macroeconomic trends and Covid-19 drivers
With this data in place, we can conduct an exploratory analysis of the master dataset, using two staged econometric models and multivariate linear regression to help understand the effect of different factors on the client’s marketing performance.
We can then carry out further detailed analysis to identify drivers of sales and provide granular insights into which marketing activities and channels have the most impact at which times.
The aim is to provide insight into the overall ROI of media levers considering both short term and long-term effects, and to identify the optimum spend by channel, genre, and platform to inform future investment strategies.
We provide the results of these explorations to the client through business presentations and executive dashboards that deliver crucial insights into the effectiveness, ROI and saturation points of various media channels.
We also place the data into a self-service simulator through which the client can model what-if scenarios and simulate outcomes. With this capability, marketing teams can instantly see the impacts of a different strategy and road-test approaches without risking their limited resources. As a result, our client can clearly define the optimal marketing mix for both of its categories across ten different markets to inform future investments.
Today, our client has complete visibility into the impact of distribution, price elasticity, promotion and marketing activities, and a holistic view of the best possible investment levels and saturation points of different channels, from TV, radio and print, to Facebook, Instagram and YouTube. This includes granular insight into how ROI is affected by the length of an ad, the time the ad was run, and various other campaign level metrics.
The client can also see how each individual factor contributes to overall volumes, short term ROI and long-term brand equity – providing a complete view of the impacts of every marketing decision.
With this level of visibility, we can recommend each brand’s optimal spend levels for different types of advertisements. We can also suggest ways to optimise digital spend by rationalising the long tail of publishers and platforms.
All of this culminates in the ability to uncover the best strategy for each market, category and brand – not based on gut instincts or past results, but proven and regularly updated data.
With the help of The Smart Cube, our client has been able to optimise over $250 million of media spend across all categories and markets – and identify a number opportunities for strategic improvement.
This included the chance to reallocate $3.5 million of marketing spend in the snacks category, and alter the marketing mix in beverages to achieve incremental 1% volume growth.
Furthermore, by looking at long-term impacts on brand equity alongside short-term results, the client was able generate an additional 15-20% ROI that a typical MMM methodology wouldn’t have identified.
As our relationship continues into its fifth year, we expect to scale this solution across more geographies to help further improve and accelerate our client’s worldwide marketing strategy.