ANZ CMO: Econometric modelling needs to evolve way beyond media acquisition to CX, tech stacks, personalisation, owned channel ROI – and nobody has cracked it yet
ANZ CMO Sweta Mehra: "I am quite optimistic about this space. But I think it will be quite hard before we can [accurately make] ROI comparisons of marketing activities."
ANZ CMO Sweta Mehra says marketers are stumped when it comes to quantifying how below-the-line activity is driving return on marketing spend. Consultancies and platforms that can go beyond media-driven acquisitions – per Mehra "a tiny part of my revenue" – to enable marketers to accurately compare the contributions of broader marketing activities will likely hit the jackpot.
What you need to know:
- ANZ CMO Sweta Mehra says marketing and media mix models need to evolve from CPG origins.
- Marketers need models that can gauge ROI from broader marketing investment and owned channels.
- Consultants and platforms are working on it but says there’s work yet to do.
- Firms that nail it will hit pay dirt.
I cannot be reliant on just media-driven acquisition-based marketing models [for ROI estimates]. I need to be looking at the whole gamut of marketing activities from acquisition, engagement, retention – and I need to be able to look at below the line activities within that mix.
ANZ CMO Sweta Mehra says marketers are grappling with a massive black hole in trying to gauge how below the line activity is driving return on marketing spend.
Dynamic econometric modelling is evolving fast, with emerging platforms attracting significant investment in a bid for scale. To date, both start-up and incumbent providers have focused largely on acquisition through advertising media – determining which external channels are performing or otherwise.
But media mix modelling (MMM), even if closer to real-time, is a drop in the ocean compared to benchmarking and comparing how broader marketing activities, such as CX, personalisation and owned media are performing, Mehra told Mi3.
“If you look at a lot of our marketing models, they have come from industries like CPG, which have created a lot of the concepts historically. Right now, it's all changing,” said Mehra.
“Gradually service, subscriptions and other things are becoming a bigger part of the revenue for most of businesses – and financial services is like that. The [media-derived] acquisitions that I deliver within the year are a very tiny part of my total revenue,” she added.
“So … I cannot be reliant on just media-driven acquisition-based marketing models [for ROI estimates]. I need to be looking at the whole gamut of marketing activities from acquisition, engagement, retention – and I need to be able to look at below the line activities within that mix.”
Which means backward-looking models won’t cut it. “I need to be able to explain the future,” said Mehra.
She acknowledged there is “really good work being done” by firms developing more dynamic approaches. “But it feels like a lot of it is driven for typical historic models, where the role of marketing is predominantly just acquisition, and the way of delivering that acquisition is largely through media,” she added.
Some heavyweight consultancies are attempting to build bespoke solutions to crunch the kind of marketing data that the likes of ANZ require to gauge ROI across below the line activity. But there remains some way to go.
“They are onto it – and we will see more progress, including with the work that we've been doing – so I am quite optimistic about this space,” said Mehra.
“But I think it will be quite hard before we can [accurately make] ROI comparisons of marketing activities.”
Listen to the full podcast with ANZ CMO Sweta Mehra here, or an abridged write-up here.
