Could Chocolate Be the Answer to Your ROI woes?

Could Chocolate Be the Answer to Your ROI woes?

Vlad Radosavac, Senior Manager, Marketing Effectiveness Practice at Nielsen explains how Cadbury used market mix modelling (MMM) to review and optimise media spend which uses sophisticated mathematical models of the past to predict the future.

Vlad Radosavac
Posted by Vlad Radosavac

But if the findings and recommendations aren’t translated and implemented into your media planning and buying strategy, nobody wins and these powerful analytics projects become a sophisticated, but shelved, ‘nice to know’. Mondelēz, Carat and Nielsen set out to change this during a recent project with the Cadbury brand. The three players came together to flip the equation and put the consumer at the heart of the analysis with impressive results.

MARKET MIX MODELS AS AN ENABLER RATHER THAN A CAPABILITY

With a goal to optimise and execute media spend using the consumer as the start; we decided to do things differently to the usual MMM process. We started with the end goal in mind and figured out how to run our models to enable that end goal rather than dictate the end goal, a paradigm shift in the MMM world. We set out to understand the individual drivers of media response in order to increase the effectiveness of Cadbury’s advertising program without needing an increased media budget; we simply wanted to find a smarter way of planning Cadbury’s existing media spend that would more effectively and efficiently, resonate with their consumers. Cadbury is already a well-known brand and has strong equity in the market. Instead of focusing predominantly on TARPs as the central TV buying measure, we examined the buying behaviours of Australian chocolate consumers and established the need to plan using reach and frequency goals that were appropriate for this much loved brand. We looked at many different variables in order to understand what components (and by how much) each of them elicited a sales response in our chocolate consumer; day-part of media airings, media vehicle, TV copy durations, flighting strategies, unique reach and frequency, as well as in-store activity over the past three years were just some of the variables under the microscope.   The new approach however, required a rethink from all parties as to how the measures are used and applied:

  • Mondelēz and the Cadbury brand team needed to rethink the use of internal MMM and guidelines, as well as the conversations their brand teams had on a global level
  • Carat needed to rethink the conversation it had with the Mondelēz marketing team and how the media strategy was developed, as well as the traditional principles of media buying
  • Nielsen needed to rethink traditional ways of running MMM to ensure we could accurately measure optimum reach and frequency cap thresholds, amongst other variables

market-mix-modelling

To properly prepare, discussions began late-2012. By mid-2013 we were faced with some very interesting learnings and some pretty radical recommendations about how media works best for Cadbury. The Mondelēz leadership team further challenged us with proving the MMM recommendations in the “real world”.

A test case was run with the media strategy recommendations implemented in one city as a test market, while other states in Australia continued on; business as usual. We identified and paired test and control stores so that we could measure the difference in actual volume sales at a store level in the test market vs. other states. The test and control study validated the hypothesis, Mondelēz leadership approved the recommendations and thus, a new media program was agreed to by late-2013 and rolled out Australia-wide in 2014.

Results to date have been overwhelmingly positive. So far, Cadbury’s media spend has been optimised to provide an increased 28% return on investment on a flat media spend. Despite this flat spend; Cadbury’s weeks on air across their brand portfolio have increased by 61%.   By planning Cadbury’s campaigns using these principles, we’ve managed to ensure that the master-brand is leveraging and maximising all halo effects to its advantage, least of all, that advantage being that sales results have been encouraging in 2014.

KEY LEARNINGS FROM THIS PROCESS

1. Collaboration is the key to success Too often MMM is done in isolation and the powerful learnings that can be identified in these projects aren’t directly applied or implemented. By getting the media strategists, marketing and sales managers and researchers all in one room, collaborating, the results were staggering.

2. Consumer insights need to be placed at the heart of research. 
By starting with the end goal in mind and putting the need to understand consumer behaviour and response at the centre of our analysis, we were able to focus on learning what was best for this particular brand and the people who buy it. Media return on investment was impressively increased and the marketing campaign was optimised with no additional budget.

The result was incredibly satisfying for all parties; not only did it teach all of us new understandings and ways to look at media analytics, planning and buying, it also showed us what can truly be achieved when all stakeholders collaborate with one goal in mind.