Learn how this new form of “marketing intelligence” can dramatically reduce wasted spending and contribute even more effectively to earnings per share.

1. White Paper
How to Spend the Minimal
Effective Amount on Media
1 West Street New York NY 10004 | 646-545-3891 | info@networkedinsights.com | networkedinsights.com
646-545-3900

2. White Paper Networked Insights
How to Spend the
Minimal Effective
Amount on Media
Businesses today have access to rich data and reliable metrics for managing business performance
in real or near-real time. Inventory turns. Cycle times. Days sales outstanding. In fact, business intel-
ligence capabilities give today’s executives a good grasp of virtually every aspect of operations. With
the help of technology, marketing executives also have been able to better understand the perfor-
mance of many aspects of marketing. However, social media represents a new frontier in terms of
how people communicate their perceptions, opinions and preferences about virtually any topic,
including a company’s brand, products and services. In this paper, we explore a new generation of
analytics capabilities that offer marketing and media executives practical ways to mine the rich social
media data that’s available today and use it to measure and improve marketing performance.
Marketing executives face growing scrutiny for brand-related spending,
especially advertising. No wonder, since marketing is a major corporate
budget item that traditionally has been the hardest to understand and
measure from a performance standpoint. Quarterly and annual reviews
provide some idea of how the money is being spent, and frequency, reach,
target rating points, media impressions and press clip counts are among
the long-standing measures of marketing effectiveness. But these are be-
coming less and less informative as the world moves at Internet speed..
Another unsettling reality marketing executives are all too aware of: Your
organization is probably overspending by 30 to 80 percent for the value
you’re getting. As U.S. department store magnate John Wanamaker said:
Overspending
30-80%
“Half the money I spend on advertising is wasted; the trouble is I don’t
know which half.” Knowing this, CFOs often go to their marketing depart-
ments for spending reductions when quarterly earnings per share (EPS)
targets are not going to be met. Marketing dollars effectively serve as a
rainy day fund that can be tapped for those extra cents per share needed
to meet Wall Street’s expectations.
Your organization is probably
It doesn’t need to be this way anymore. Through social media and other
channels, consumers are increasingly vocal about their brand advocacy
overspending on marketing for
(or detraction), intent to act and discussion of past actions. Marketing can the value you’re getting from
leverage these “conversations” to become far more efficient – especially your media by 30 to 80 percent.
with its spending on advertising. The key is not just to monitor the conver-
sation, however—almost any company can do that now with today’s social
media monitoring engines
Instead, marketing—and by extension, media planning and buying—needs
techniques and analytical capabilities that cut through the conversational
clutter to identify trends and perform predictive modeling that not only
captures the pulse of the marketplace now but offers valuable insights as
2

3. White Paper Networked Insights
How to Spend the Minimal
Effective Amount on Media
to where the market is moving or where new markets are likely to ap-
pear. Armed with this information, marketing executives can identify the
minimal effective amount of spending needed to drive the greatest market
awareness.
This new form of “marketing intelligence” can dramatically reduce wasted
spending. As a result, such a shift in spending effectiveness can contribute
directly to earnings per share improvement. Marketing can finally – and
with far greater accuracy – prove its accretive value to the enterprise and
shareholders.
Right message, right place, right time
For decades marketers have considered television advertising to be the
major driver of awareness. But today highly engaged, potentially massive
audiences also can be found in many other places, so television advertising
isn’t the only option. More than half a billion people, a 12th of the world’s
population, are connected on Facebook. Twitter has 200 million users.
Numbers like these demand that marketing executives think about using
their resources differently. It’s not just about appending social media to
traditional ad buys, or even integrating the two. Instead, marketing execu- More than a 12th of the world’s
tives can start using their customers to help sense and inform what aware- population is connected via Facebook.
ness and promotional activities should be done in marketing and which of
those will be most effective in reaching their exact audience.
Media buying can be made hyper-efficient by abandoning the traditional
“spray and pray” approach and instead finding out exactly when and
where to use it – the times and places that targeted consumers will not
simply hear marketing’s messages but be highly receptive to them.
Twitter now has 140 million active
Executives can then identify the most valuable components of the market- users and 340 million Tweets a day.
ing arsenal – the right messages – and sequence them in ways that both
resonate with target audiences; optimize paid, owned and earned media;
and deliver measurable, substantial improvement in marketing ROI.
The two largest portions of the marketing budget typically are develop-
ing content and purchasing media. Being efficient and effective in both
of these processes boils down to delivering the right message in the right
place at the right time.
Optimizing marketing plans with audience intelligence
A major network wanted to use social media to “organically” grow an audi-
ence before the premier of a new television series. The network engaged
Networked Insights and quickly discovered that its measurement tools and
perception of community management in social media extended only to
its owned web properties. This self-focused point of view is not uncom-
mon because it’s shaped by the technology an organization can access and
control. However, this limitation has to be overcome to truly understand
an audience across the social web.
3

4. White Paper Networked Insights
How to Spend the Minimal
Effective Amount on Media
As the show premiered and entered its first few weeks, our project to
maximize the network’s social media audience quickly became a real-time
feedback loop that informed many decisions. Two significant examples
– one related to content creation and the other to marketing – demon-
strate the power of a network in sync with its audience. First, the insights
Social loves an upset.
gathered from social data allowed show producers to instantly understand
the reactions of viewers and alter postproduction techniques to eliminate
dissonant moments that were impeding the audience’s suspension of
disbelief. Second, social data took the guesswork out of show marketing by
#9 Northern Iowa
revealing the characters and plotlines that were resonating with viewers. over
#1 Kansas
An NCAA slam dunk
One consumer services company tried to capitalize on March Madness by
buying exclusive advertising rights to TV broadcasts of games, at a cost of
about $42 million. The objective, of course, was to dominate its category
during the three-week NCAA basketball tournament that included a $10
million media buy. A locked out competitor asked Networked Insights to
search for another way to get in front of tournament fans.
We used social media data analysis to build a strategy for reaching this #9 Northern Iowa
over
target audience at a fraction of the price. We showed the company how #8 UNLV
marrying well-placed digital advertisements with highly desirable online
video, aligned to the topics that drove online conversation, could create
more impressions than the $10 million media buy. By modeling the overall
ripple effect and social reach of that “sequenced approach,” we proved
that a $2 million paid media investment would generate the same amount
of reach and brand awareness as the $10 million spent on traditional ad-
Northern Iowa
vertising produced. Viewed another way, that’s about $8 million that could
have been spent on other priorities, or taken to the bottom line to boost 3.13.10 3.19.10 3.25.10 3.31.10
EPS. A slam dunk indeed.
#12 Cornell
Reaching NFL fans without an NFL media budget over
Today’s fragmented media landscape means advertisers can no longer #4 Wisconsin
select the TV shows with the most reach and call it a day. A brand’s target
audience is now scattered across broadcast, cable and online media
#12 Cornell
properties. And, that audiences is consuming digital content while viewing over
traditional programming. These trends are making the media buyer’s job #5 Temple
exponentially harder.
National Football League broadcasts deliver a premium audience and
provide an opportunity to reach many people at one time. But a downside
for advertisers is the cost associated with adhering to mass-marketing
techniques. As media has evolved, so too have the behaviors of the audi-
ence. How can brands and agencies keep up with target consumers who
appear to have better technology than the marketers trying to connect
with them? Cornell
3.13.10 3.19.10 3.25.10 3.31.10
4

5. White Paper Networked Insights
How to Spend the Minimal
Effective Amount on Media
TV analysts from Networked Insights examined shows that NFL fans discuss
across the social web to identify more economical alternatives for reaching
the big game’s audience. Shows like “Fringe,” “The Office,” “Community,”
“The Simpsons” and “Family Guy” were among the most mentioned. For
brands and media buyers, this discovery supports more informed decision
making. The result is a more efficient media plan that maximizes the ef-
fectiveness of your spend.
How to make it happen
What can you as a marketing executive do to set your company on the
path to hyper-efficient spending on marketing? A good place to start is by “ For brands and media buyers,
identifying the minimal effective amount your company needs to spend
on marketing to reach the awareness goals it seeks. This is a critical new this discovery supports more
concept for marketing executives to understand. informed decision making. The
The methodologies and technology that enable the analysis that can give result is a more efficient media
marketing executives this insight have only matured within the past few plan that maximizes the
years. In light of this, a valuable next step is to conduct a pilot program
to begin identifying inefficiencies and realigning resources to the rap-
effectiveness of your spend.”
idly changing, social media-infused marketplace. Typically, we find that
companies which undertake such pilot programs can, in a very short time,
improve the efficiency their marketing spend by 10 percent or more.
Begin to tap the true value of marketing
CFOs are sometimes grateful that marketing provides a piggybank their
company can draw from to shore up earnings. But they also know that the
flab in the marketing budget is stark evidence of costly, continuing inef-
ficiency.
Consumer analytics can help marketing executives communicate with their
CFOs and other non-marketing executives in a language those other execu-
tives understand. In this way, for the first time, marketing executives can
articulate the minimal effective amount needed to spend on their market-
ing initiatives. Placing the right message in the right place at the right time
based on quantifiable real-time “marketing intelligence,” companies can
economically reach audiences that are tuned in and responsive to targeted
messages. Spend less, sell more—now there’s a concept.
Investment summary
Example Worksheet
Total savings on 40,000,000
advertising
Number of shares 534,000,000
outstanding
Impact on EPS 8 cents per share
Questions about this report? Want a free consultation on how real-time
646-545-3900
data can improve your media planning and other marketing? Contact us
info@networkedinsights.com
networkedinsights.com
5