​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

Blog Posts

Designing for a cashless society

More movement has been made toward a cashless society recently, and already we are starting to see enormous implications across our society.

Katja Forbes

Founder and chief, sfyte

Setting advertising objectives for financial performance

I’ll often be talking to clients and at some point say, ‘the most important thing is justifying price’. Then moments later, ‘the most important thing is increasing the size of your customer base’.

Kyle Ross

Strategist, TRP

5 common mistakes to avoid in scalable customer experience

CX is about future-proofing your business by ensuring that your commercial model is always looped into your customers' needs, perceptions, values, beliefs, motivators, and detractors.

Tom Uhlhorn

Founder and strategy director, Tiny CX

Promotion is difficult. You should be able to do it. Sometimes it turns out bad, and when you turn to professionals, it turns out well - ...

Jordan Samuil

Village Roadshow partners with Lion for pourage rights and promotional partnership

Read more

This is pure vomit material. Self congratulatory blurbs. No evidence of any innovation or actual value created. Most marketers have compl...

Bobbo

Announcing the CMO50 for 2018

Read more

Unfortunately, the title "AdTech Magic Quadrant" is misleading as it only represent a fraction of the ecosystem. It it is a useful docume...

Ludovic Leforestier

Report: Gartner recognises the best adtech players in Magic Quadrant

Read more

Thanks for writing about chatbots. Definitely bots have the exciting future when it comes to customer engagement, transactional and conve...

Giridhar Prathap Reddy

Australian Open chalks up strong ticket sales with chatbot

Read more

Hello, where are the explanations of all the levels explained? I'd like to review this with a couple of colleagues. Thanks.

Melinda Gonzalez

CMO launches CMO CX, debuts customer experience maturity assessment

Read more

Latest Podcast

More podcasts

Sign in