Covario recently announced the launch of a new Analytics Insights service.  Craig Macdonald, Senior Vice President and Chief Marketing Officer for Covario will be heading up this new offering.  Loyalty 360 had the opportunity to hear from Craig and learn more about the value of analytics insights, who benefits from these efforts, and what makes the Covario program unique to the marketplace.  

Loyalty 360:  What current marketplace challenges brought about the need for Covario to develop this new Analytics Service offering?

Macdonald :  We work mostly with larger advertisers that are trying to accomplish a whole host of complex problems.  Here is how I would categorize them.

  • Ascribing the appropriate value to media.  This is an age old problem in traditional media – what is the value of a TV Ad?  There has been decades of research done on this topic and now the same questions are moving to the digital media space.  What is the value of a display ad?  What is the value of a Facebook Friend?  What is the value of a paid search ad?  Unlike previous forays into trying to answer this question – the digital space has real hope of making significant breakthroughs in the science of ascribing value to advertising.  The reason is simple – the data is better!  Our clients, through their web analytics systems and the way we setup their digital campaigns, are able to track media far more granularly and with more robust information than has ever been available in the past.  And as such, we have dedicated our team to helping our clients, through a process called “attribution modeling,” do statistical analysis to determine the appropriate value of media.  With this framework – we are then able to ensure media budget is allocated to the most lucrative channels, creative, and sites.
  • Digital Competitive Benchmarking is another big issues we are tackling for clients.  The wealth of data available to organizations to benchmark their digital and social media advertising programs against competition – so they can see if their efforts are causing them to gain or lose market share – is possible, but also not necessarily easy.  So we find ourselves developing competitive benchmarking frameworks for clients more and more. 
  • Building Governance Models for improved scalability and efficiency in media execution.  Most large advertisers are trying to figure out how to build better scalability into their media programs – what to centralize, what to leave local, and how to then finance the centralized unit.  What metrics should be used to ensure consistent budgeting?  What technologies should be used to build scalability across media types and within media execution?  We find that our analysts and consultants are being asked to take part in more and more of these conversations. 

How is this service unique to the marketplace, distinguishing its capabilities from standard analytics capabilities?

There are two reasons.

First, we are very focused on not just doing research and analytics for the sake of analytics.  Since we also do a lot of media buying and strategy consulting for customers – we have focused the team on making operational recommendations, not just “interesting” observations.  An example – we recently did a project for a customer to determine how to allocation budget for 4th quarter across various media channels including TV.  The purpose was to drive results in a pure branding campaign.  We did a ton of work with the client to figure out what the right metric to measure success.  It turned out – it didn’t exist.  So we came up with one – let’s use Facebook and Twitter brand mentions for the customer brand – normalized against competitor brand mentions and category brand mentions – as a way to see if we are making a difference.  This allowed us to find a way to make operational decisions about allocation on branding programs and communicate success and failure so we were able to show results in the end.

Second, our technology – Marketing Action Platform – allows us to aggregate the data needed to do the analytics more efficiently than any system in the market.  This gives us an advantage.  We don’t get locked into Excel every day – because the system consolidates all the data. So I do believe we are able to spend the majority of our time on the analysis and the strategy development, and not on the less value adding chores of data consolidation. 

What types of companies will benefit from the new analytics services?  

Its kind to ask.  There are a couple of key criteria.

  • Anyone spending more than $100M annualized globally in media on an annual basis.  There is a reason for this.  Less than $100M (and that is the lower limit) – It is hard to divine a “signal” in the market from the advertising footprint, unless it is spent in a very concentrated manor – like a Super Bowl commercial. 
  • Anyone with “fuzzy” conversion metrics – i.e., companies farther up the value chain or pure brand advertisers.  Figuring out what results are in media buying is very tricky for these companies and I believe we can help them systematize their approaches.

How will these efforts provide actionable insights to improve upon the customer experience?

The goal is pretty specific – better allocation of media dollars. At a high level, I believe the #1 issue facing EVERY CMO at every large company is pretty straightforward.  How to connect the discretionary spend of marketing, specifically advertising, to the financial results. How does advertising build asset value on the balance sheet.  How does the advertising line in the net income statement drive the sales results?  That is our focus.  I don’t necessarily call that “customer experience” other than that it keeps our client CMO’s from being made redundant. We strive to make our clients best in class when it comes to accountability for media spend, and for driving results. 

Further, can these tools be used to elevate customer engagement and ultimately impact loyalty?

The biggest area where our methodology and insight drives customer engagement is in the analytics we do around creative impact.  Here is an example.  We did a study a couple months ago – we looked at the top 100 advertisers in the market and saw how their spending levels impacted their brand mentions and brand sentiment as measured through a host of social media sources – Twitter, Facebook, blogs, YouTube videos and comments about those videos, etc.  We found the following.  Raw spending drives brand mentions, but is completely uncorrelated to sentiment about the brand.  We called the finding “money can’t buy you love.” 

The results of that study have spawned a whole new set of analytics – can we ultimately categorize and measure the impact of creative on customer engagement and loyalty – assuming sentiment is a stand in for engagement and loyalty.  We are trying to develop a new set of metrics to categorize creative concepts (are the promotional, pure brand, rich media versus flat, using celebrity endorsement, etc)   and see if the categories can show us what drives engagement.  If we can do this – then I think we can drive real – and more importantly – SUSTAINABLE insights for customers on how to elevate their relationship with their customer.  I say SUSTAINABLE, because I believe it has to move from “the last great idea from the creative agency” or a promotion – to a system with predictability and it must be measureable.  

Could you share a key bit of advice, for marketers today, on improving their customer data and analytics strategies?

First, invest in it!  The investment customers make in having good data is sometime so far beyond what is necessary to be a real problem. 

Second – own your data!  Most advertisers do not know that they do not own their own data regarding media performance.  No, it is usually owned by their media agency.  That isn’t right.  Companies need to own their own data.

Third, invest in developing analytic skill sets.  Every company we work with needs more quants – less creative. The job is becoming more data driven, and more financial. 

Craig Macdonald, Senior Vice President and Chief Marketing Officer - Covario

Craig Macdonald is responsible for the strategic direction, development and marketing of the Covario portfolio of solutions. Prior to Covario, Craig was the director of product management for the service and management group within Hewlett Packard’s OpenView division. Craig has held several key positions at Peregrine Systems, Fair Isaac, HNC Software, World Research Advisory, META Group and Greenwich Associates.

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