Steve
Shannon
PANEL 3 – BIG DATA
THE MARKETING VALUE CHAIN
PROVING THE CONTRIBUTION OF MARKETING TO THE
BUSINESS
Stephen Diorio
MASB Fellow
CONFIDENTIAL 2
A 10% increase
in the value of
the brand will
drive a 3.3%
increase in
stock price2
Source: 1) Brand Value as a Percentage of Marketing Capitalization. Applying the Brand Investment and Valuation Model. Analysis of Meier, Findley, Stewart. Marketing Accountability Standards
Board. 2017 2) Marketing's Impact on Firm Value: Generalizations from a Meta Analysis, AMA, Alexander Edeling and Marc Fischer, Journal of Marketing Research 2016, 3) Empirical
Generalizations About Marketing Impact, Hanssens, Marketing Science Institute 4) the Marketing Accountability Standards Board CIR Initiative, 2018.
A 10% increase
in the value of
customer assets
will drive a 7.2%
increase in
stock price2
A 10% increase
in in
organizational
competence will
drive a 5.5%
increase in
stock price2
Enterprise
initiatives aimed
at improving the
Return on
Marketing
Investment
(ROMI) Initiatives
are generating
improvements of
up to 9 percent2,4
A10% increase in
the effectiveness
of digital
channels will
drive a 2.2%
increase in stock
price3
A 10% increase in
perceptions of
product quality
will drive a 3%
increase in stock
price2,3
QUALITY OF PEOPLE
& PRODUCTS
BRAND
VALUE
CUSTOMER
EQUITY
ORGANIZATIONAL
COMPETENCE
DIGITAL
PLATFORMS
MARKETING
EFFECTIVENESS
THE FINANCIAL CONTRIBUTION OF MARKETING TO THE ENTERPRISE
CHALLENGE: BUILD FINANCIALLY CREDIBLE MEASURES OF MARKETING’S
VALUE
CONFIDENTIAL
GOAL: MARKET THE FINANCIAL CONTRIBUTION OF MARKETING TO MANAGEMENT AND THE BOARD
BRAND
ASSETS
BRAND
PREFERENCE
ORGANIZATIONAL
MEASUREMENT
CAPABILITIES
ORGANIZATIONAL
KNOWLEDGE
SHARING
MARKETING
EFFECTIVENESS
SALES AND SERVICE
EFFECTIVENESS
OWNED DIGITAL
MEDIA
PERFORMANCE
INTER -
DEPARTMENTAL
CONNECTEDNESS
DIGITAL CHANNEL
PERFORMANCE
DIGITAL
EXPERIENCE
CUSTOMER
LOYALTY
PRODUCT &
SERVICE
QUALITY
PERCEPTIONS OF
INNOVATION
EMPLOYEE TALENT,
LEADERSHIP AND
ENGAGEMENT
CUSTOMER
SATISFACTION
CHANNEL REACH,
SHARE AND
PERFORMANCE
CUSTOMER
RELATIONSHPS
BRAND
MOMENTUM
18 STRATEGIC VALUE DRIVERS OF ENTERPRISE VALUE
QUALITY OF PEOPLE
& PRODUCTS
BRAND
VALUE
CUSTOMER
EQUITY
ORGANIZATIONAL
COMPETENCE
DIGITAL
PLATFORMS
MARKETING
EFFECTIVENESS
THE FINANCIAL CONTRIBUTION OF MARKETING TO THE ENTERPRISE
CONFIDENTIAL
THE MASB MARKETING VALUE CHAINSM
1
PAID, OWNED AND
EARNED MEDIA
OWNED MARKETING
INFRASTRUCTURE
PROMOTION ACTIONS
PLACE-DISTRIBUTION
ACTIONS
PRODUCT ACTIONS
PRICING ACTIONS
CAPABILITY
DEVELOPMENT
COMPETITIVE, BRAND, &
ACQUISITION STRATEGY
2
BRAND VALUE
CUSTOMER
RELATIONSHIP EQUITY
ORGANIZATIONAL
COMPETENCE
SALES AND MARKETING
EFFECTIVENESS (ROMI)
DIGITAL PLATFORM
EFFECTIVENESS
QUALITY OF PRODUCTS
AND PEOPLE
3
PURCHASE DECISIONS
USAGE AND BUYING
CYCLES
CONSUMPTION
FREQUENCY
PURCHASE SIZE AND
VOLUME
SHARE OF
TRANSACTIONS
RESPONSE AND
CONVERSION RATES
REFERRALS AND WOM
LOYALTY
PRICE SENSITIVITY
4
VOLUME
SHARE
LIFT
VOLATILITY
VELOCITY
PROFIT MARGINS
CUSTOMER ECONOMICS
COSTS
FUTURE OPTION VALUE
5
ENTERPRISE VALUE
REVENUE
PROFITS
CASH FLOW
GROWTH RATE
BRAND ASSET VALUE
COST OF SALES
COST OF CAPITAL
ACTIONS AND
INVESTMENTS
KEY DRIVERS
OF VALUE
CUSTOMER
BEHAVIOR
BUSINESS
OUTCOMES
FIRM
FINANCIAL
PERFORMANCE
A FRAMEWORK FOR CONNECTING MARKETING INVESTMENTS AND ACTIONS TO FIRM FINANCIAL PERFORMANCE AND ENTERPRISE VALUE
UNDERSTAND
AND AGREE
DOCUMENT
DRIVERS AND
HYPOTHESES
TEST AND
MEASURE
MODEL, VALUE
AND PREDICT
A ROADMAP FOR CONTINUOUS IMPROVEMENT IN RETURN
CONFIDENCE AND CERTAINTY
COST AND COMPLEXITY OF ANALYSIS
DECIDE
AND ACT
CONFIDENTIAL
PAID, OWNED AND
EARNED MEDIA
OWNED MARKETING
INFRASTRUCTURE
PROMOTION ACTIONS
PLACE-DISTRIBUTION
ACTIONS
PRODUCT ACTIONS
PRICING ACTIONS
CAPABILITY
DEVELOPMENT
COMPETITIVE, BRAND, &
ACQUISITION STRATEGY
BRAND VALUE
CUSTOMER
RELATIONSHIP EQUITY
ORGANIZATIONAL
COMPETENCE
SALES AND MARKETING
EFFECTIVENESS (ROMI)
DIGITAL PLATFORM
EFFECTIVENESS
QUALITY OF PRODUCTS
AND PEOPLE
PURCHASE DECISIONS
USAGE AND BUYING
CYCLES
CONSUMPTION
FREQUENCY
PURCHASE SIZE AND
VOLUME
SHARE OF TRANSACTIONS
RESPONSE AND
CONVERSION RATES
REFERRALS AND WOM
LOYALTY
PRICE SENSITIVITY
VOLUME
SHARE
LIFT
VOLATILITY
VELOCITY
PROFIT MARGINS
CUSTOMER ECONOMICS
COSTS
FUTURE OPTION VALUE
ENTERPRISE VALUE
REVENUE
PROFITS
CASH FLOW
GROWTH RATE
BRAND ASSET VALUE
COST OF SALES
COST OF CAPITAL
Miller Coors; BRAND A
THE MASB MARKETING VALUE CHAINSM
1 2 3 45
ACTIONS AND
INVESTMENTS
KEY DRIVERS
OF VALUE
CUSTOMER
BEHAVIOR
BUSINESS
OUTCOMES
FIRM
FINANCIAL
PERFORMANCE
MILLER COORS EXAMPLE
©2019 MASB 8
About Steve Shannon
◼ Former CMO of Hyundai Motor America and 32-year
veteran of the auto industry including Cadillac, Buick,
Saab, and Saturn brands
◼ Led multiple Super Bowl, Oscar, Grammy and NCAA
Football programs, and an award-winning integration
with The Walking Dead
◼ Currently advisor to:
◼ Yext digital knowledge management platform
◼ Foursquare location data platform
◼ EDO data science solution for optimizing linear TV through
measuring search engagement
◼ Harvard Undergraduate and Columbia MBA
CONFIDENTIAL
PAID, OWNED AND
EARNED MEDIA
OWNED MARKETING
INFRASTRUCTURE
PROMOTION ACTIONS
PLACE-DISTRIBUTION
ACTIONS
PRODUCT ACTIONS
PRICING ACTIONS
CAPABILITY
DEVELOPMENT
COMPETITIVE, BRAND, &
ACQUISITION STRATEGY
BRAND VALUE
CUSTOMER
RELATIONSHIP EQUITY
ORGANIZATIONAL
COMPETENCE
SALES AND MARKETING
EFFECTIVENESS (ROMI)
DIGITAL PLATFORM
EFFECTIVENESS
QUALITY OF PRODUCTS
AND PEOPLE
PURCHASE DECISIONS
USAGE AND BUYING
CYCLES
CONSUMPTION
FREQUENCY
PURCHASE SIZE AND
VOLUME
SHARE OF TRANSACTIONS
RESPONSE AND
CONVERSION RATES
REFERRALS AND WOM
LOYALTY
PRICE SENSITIVITY
VOLUME
SHARE
LIFT
VOLATILITY
VELOCITY
PROFIT MARGINS
CUSTOMER ECONOMICS
COSTS
FUTURE OPTION VALUE
ENTERPRISE VALUE
REVENUE
PROFITS
CASH FLOW
GROWTH RATE
BRAND ASSET VALUE
COST OF SALES
COST OF CAPITAL
Miller Coors; BRAND A
THE MASB MARKETING VALUE CHAINSM
1 2 3 45
ACTIONS AND
INVESTMENTS
KEY DRIVERS
OF VALUE
CUSTOMER
BEHAVIOR
BUSINESS
OUTCOMES
FIRM
FINANCIAL
PERFORMANCE
HYUNDAI EXAMPLE
CONFIDENTIAL
Hyundai US Sales
0
50
100
150
200
250
300
350
400
450
500
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 3004 2005 2006 2007 2008
Year
000's
Cars
HYUNDAI US SALES
CONFIDENTIAL
Hyundai Brand Value Over Time
0
1
2
3
4
5
6
2005 2006 2007 2008 2009
Year
US
$ B
Hyundai
HYUNDAI BRAND VALUE OVER TIME