With All This Data, Why is Gut Instinct En Vogue for Marketers? - Greg DePalma-TiVo

A recent Columbia Business School Study found that more than half of CMOs and other marketing executives don't use ROI Metrics to plan budgets, AND 28% rely on gut instinct. With the latest technology and databases, one would think it would be easier to measure ROI, but increasing media fragmentation and diverse consumer segments, the results of the study may not be as shocking as the headline.

As a former brand director, I can relate to some of the findings – for example, the study mentions 68% base their budget decisions on historical spending levels. Yes, we all look at what worked over the past say 12-18 months, test, optimize and scale the media that works. In a direct response world, that method is much easier, although far from a perfect science. The last-click model was enforced by our finance team; so if a consumer saw 20 TV ads and clicked on a banner ad, TV was not factored into the ROI equation for that customer. Unfortunately we ran a dark test and turned off TV for one month; three months of TV were necessary to return to previous levels – yes, TV drove customer acquisition for our brand.

Marketers are starting to leverage technology and databases; today set-top-box (STB) data is en vogue. For example TRA uses TiVo and other STB data in their analyses. TRA helped their client, Mars Inc., to increase TV produced sales by as much as +35%. Companies also match STB data with Experian and Acxiom data to improve ROI. Why advertise in TV shows that are watched in a time-shifted mode with 70% of the commercials being fast-forwarded?

A brand director said it best, "buying TV programming using our Acxiom segments will help reduce waste". The analysis is in development, and shortly, we will be able to quantify how much was gained or… eliminated. The industry has asked for more accountability; we are moving in the right direction, one brand at a time. I like to go with my gut instinct, but it pays off when you can utilize better technology and the more granular data sets that exist today to optimize and quantify 'more for less' to the CFO.

Greg DePalma is Vice President of Audience Insights at TiVo Inc., where he consults with advertiser, agency, and network clients to increase commercial effectiveness in a DVR world. Greg can be reached at gdepalma@tivo.com.

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