​How Nivea delivered a better ROI on marketing spend

The health and beauty giant shares how a recent partnership with Millward brown has helped to better quantify short and long-term media spend

Beiersdorf Australia’s Paul Croci and Millward Brown’s regional head of media and digital, Mark Henning discuss marketing ROI at AdTech
Beiersdorf Australia’s Paul Croci and Millward Brown’s regional head of media and digital, Mark Henning discuss marketing ROI at AdTech

Research and data analytics must be the foundations of today’s media activities in order to drive ROI on marketing action, Beiersdorf’s regional consumer research and insights claims.

Speaking at this week’s AdTech event in Sydney, Beiersdorf Australia’s Paul Croci said the complexity around marketing activities today meant marketers need to be more savvy than ever with their media spend. The company owns several health and beauty brands including Nivea, Elastoplast and Leuko.

“Research must drive action,” he told attendees. “But we found people were being burnt by projects they did in the past, because they were expensive and not very useful.”

The company recently joined forces with research partner, Millward Brown, to work on a measurement system that quantifies not just immediate short-term sales impact, but also considers the longer term ROI of different marketing activities. These insights were used to generate recommendations for business planning spanning all types of media such as TV, print, out-of-home, digital, as well as and non-media drivers like trade and price promotions to drive strategic change.

“These days, we’re being asked to more and more with less,” Millward Brown’s regional head of media and digital, Mark Henning, said. “Budgets are shrinking so we have to work out how to spread that and get the most bang for our buck. At the same time, we have the challenge of driving immediate sales.

“While that is happening, we’re working in an increasingly fragmented environment, so while our budgets are under pressure, we have to make them spread even further across a multitude of different channels, consumer behaviours and consumption opportunities. On top of this, we’re under more scrutiny than ever before. For everything we do, we’re being asked to show a return on investment for.”

According to Henning, companies are spending more and more on data analytics, with a recent report from The CMO Survey revealing 6.4 per cent of current marketing spend is on marketing analytics alone, a figure that's expected to rise by 66 per cent in the next three years.

“We’re expecting that figure to nearly double in the next three years,” he said. “So there is a lot of pressure to really looking at where we need to be spending our money to get that return on investment.”

While ad spend on online was returning a positive ROI, Millward Brown has found other media channels, such as TV, weren’t as effective in getting marketing money back. According to Henning, by analysing both short- and long-term impact of the marketing mix on sales, the research company was able to understand the full effectiveness and roles of different elements, rather than just focusing on price and promotion as key sales levers.

“Marketing investment builds sales over the long-term, while measuring only short-term ROI significantly undervalues the importance of media investment,” Henning said.

In order to build brand equity and drive steps for Nivea, Millward Brown implemented a two-step process.

“The first step was to look at the company’s base sales line and match it back to the tracking data, in order to understand how closely purchase intention was correlated within the tracking data and therefore explain those base sales,” Henning explained. “We could then explain a significant percentage of what was driving those base sales.

“The next step was looking at the key metrics within all the metrics Nivea was tracking that further helped to drive purchase intent. We broke it down to about half a dozen metrics. On top of this, we were able to quantify the level of each of those marketing metrics that drove purchase intent and drove sales over the long term.”

As a result, Henning claimed Millward Brown was able to provide Nivea with key metrics on what was driving both short-term and long-term sales, giving the brand a holistic picture of its dollar spend and ROI.

“Nivea then gains a clearer understanding of which marketing and promotional metric it should focus on to drive sales, and, more accurately quantify the impact that it was going to have over the dollar value sales in the next 12 months,” he said.

In applying these research results, Croci said Nivea completed a few holistic modelling exercises and took a number of different actions across different categories as a result.

“It helped us review our price promotions to work out where we would get the greatest bang for our buck,” he said. “We also found in-store promotions are not all created equal, so we shifted our thinking of how we approach and design them across our different retail partners.

“On top of this, we’ve done a lot of work to correlate our pre-test creative scores around the impact on short-term and long-term sales, which has really influenced the way we plan our media mix for optimum returns.

“Importantly, we can now focus more of our attention to generating the right content that is going to drive more baseline sales, and set up a measurement system to quantify how well we’re doing.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments
cmo-xs-promo

Latest Videos

More Videos

Thanks for your feedback, Rabi. While we introduced the ROO concept using a marketing example, I also believe that it is pertinent to man...

Iggy Pintado

Introducing Return on Outcome (ROO) - Brand science - CMO Australia

Read more

Thanks for your insight, Philip. Return On Outcome (ROO) requires balanced thinking with the focus on outcomes as opposed to returns.

Iggy Pintado

Introducing Return on Outcome (ROO) - Brand science - CMO Australia

Read more

Beautiful article.

Hodlbaba

15 brands jumping into NFTs

Read more

"Blue" is really gorgeous and perfectly imitates a human customer support operator. Personally, I won't order a chatbot development for m...

Nate Ginsburg

Why the newest member of BT’s contact centre is a chatbot

Read more

As today’s market changes rapidly, the tools we use change, and it is important to adapt to those changes to continue to succeed in busin...

Anna Duda

Report: 10 digital commerce trends here to stay

Read more

Blog Posts

How the pandemic revealed the antidote to marketing’s image problem

What does marketing truly ‘own’ in most organisations? Brand and campaigns, definitely. Customer experience? That remains contested ground.

Murray Howe

Founder, The Markitects

Still pursuing a 360-degree view of the customer?

On the Internet, nobody knows you’re a dog.” It may have been true in 1993 when this caption to a Peter Steiner cartoon appeared in the New Yorker. But after 30 years online, it’s no longer the case.

Agility in 2022

Only the agile will survive and thrive in this environment and that’s why in 2022, agility will need to be a whole-business priority.

Sam McConnell

Melbourne bureau chief, Alpha Digital

Sign in