AgTalk | Digital media tends to be more efficient: Bottom Line's Michael Wolfe

Michael Wolfe, CEO of Bottom Line Analytics is known for his professional expertise in providing marketing and media mix solutions. Michael is also Senior Director of Marketing Science for "The Worth", a marketing ROI modeling consulting group owned by the ad agency BBDO.

 

Michael has consistently provided fruitful solutions to clients which have enabled them to increase the effectiveness of their marketing strategies. He is also on the advisory board of Bengaluru based Rainman Consulting. In his career span, he has worked with renowned companies such as Kellogg’s, Fisher- Price Toys, Kraft Foods and Coca- Cola.

 

Adgully spoke to him about the various aspects of the marketing industry and his insights into each of these. Following are the excerpts of the interview.

 

Adgully (AG): Your work challenges the idea that ‘marketing is an expense: it is only income and revenue generating activity that companies engage in’.  In what way is Bottomline Analytics helping clients with their marketing budgets to obtain maximum benefit? 

 

Michael Wolfe (MW): Our media models establish how each element of the marketing mix drive sales and revenue. We then monetize these marketing drivers and conduct a mathematical optimization exercise which moves spending from less to more productive activities in order to maximize sales.   This effort has proven to drive higher growth for clients. For one of our clients, a major beverage retailer, we have used our models to help guide their marketing investments since 2009.  As a result, they have gone from negative to double digit positive growth and their stock has grown from $13 to almost $60 per share in this time. 

 

AG: According to you where does India stand today as far as interest in generating growth and marketing is concerned? 

 

MW: My Company, Bottomline Analytics, works with an India partner, Rainman Consulting of Bangalore. Rainmain has a number of clients using this modeling in the fast moving consumer goods space. While having the data to do these models is always an issue, I see a lot of opportunity not only in FMCG but also telecom, retail and food service industries.   

 

AG: What aspects do your solutions consider when analyzing marketing for client? Are their budgets criteria for this? 

 

MW: If the question is can clients afford to do this, the answer is yes if you consider this?   In the market modeling exercise we will show new revenue opportunities for a client at least 10 times the cost of the project. That is a guarantee. 

 

 

MW: Traditionally, there have been tensions between marketing and finance because of the lack of “accountability” that marketing has historically been viewed. In other words, the lack of accountability is due to an inability to prove a return on marketing investment. Our models totally change this and give the CMO the tools to prove the returns on the marketing investment. 

 

 

MW: Mass media has an edge over digital media due to its advantage in reach, that is, it can expose much more customers to the marketing message. However, as a general rule, digital media tends to be more efficient. In other words, it tends to generate higher ROI per expenditure. That is why in the US and Europe, more media funds are being spent on digital relative to mass media. 

 

 

MW: In my experience, while increasing marketing investments in the right way almost always drives growth and, with the help of our models, will drive “profitable growth”, the truly exceptional growth stories I have seen are almost always focused on some sort of “innovation”. This is often a new product launch.  Our analysis always looks for the “golden nuggets of opportunity”. This is often due to the launch of a new product in which we uncover the opportunity to significantly accelerate marketing investment and, by doing so, will have a transformative impact on total company growth and performance.

 

 

MW: At least in North America and Europe the trends are to alter the marketing mix in moving marketing funds from traditional mass channels to digital and social media marketing.  It remains to be seen if some companies are going too far on this. P&G, for example, is doing this now and we observe their growth slowing.  PepsiCo moved a lot of marketing funds from traditional to digital and social media in 2011 and their growth slowed.  Now they are moving funds back to traditional channels. I don’t think a lot of companies have figured out the right mix and balance between traditional media channels like TV, radio and print and the newer digital and social media channels. This is why the work we do is so very important. 

 

 

MW: The future of marketing will be much more analytical. In fact, this movement is changing the nature and skill sets required for marketing. Unfortunately, many marketers and companies are finding that they are unprepared for this change. I believe that analytics can be a competitive advantage and companies that are flexible enough to adapt and analytics culture into their operations will be the leaders and the success stories of the future. | By Aditi Popat [aditi(at)adgully.com]