Investing to Grow:

How Nielsen can Help Clients Maximize Return

on their Investments

September 9, 2009

Confidential & Proprietary • Copyright © 2009 The Nielsen Company

We live in a fragmented marketing world…

Multiple Screens:
Internet, Mobile More ways to reach &
Numerous TV Channels: target consumer!!
including Digital TV

Manufacturers are working harder than ever to influence

consumer choice, and reach them in multiple ways…
Questions often asked in this context are:
•How do I stretch my budget to maximize returns?
•Given the new media reality, does traditional advertising still work?
•Should I continue to invest in media, or focus more on promotions?
•Does Digital media work? Should I replace traditional media for Digital?

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 Clients utilize Nielsen’s Marketing ROI Solutions
Framework to grow profitably while addressing
marketing fragmentation.
Evaluate impact
compared to norms
and maximum
potential
Recommend
improved execution &
investment
strategy to grow.
Implement strategy.

Measure the impact & ROI Track execution and

of marketing spending impact of new marketing
through Marketing Mix plan
Models & Analysis

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Nielsen Marketing ROI Solutions encompass
the store, the market and the consumer.

Measure store-level marketing

response by using store-level
data

Integrate market-level trends &

differences

Understand consumer-level
response to marketing

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Model measurements are used in a holistic
framework to improve ROI. Brand objectives should be considered.
Example: small or new brands with the
potential to be large brands require
Brand large investment but may have low
Objectives ROIs initially.
Consider competitive dynamics (share
Competitive of voice, level of category promotion,
Scenario need to retain shelf space) when
setting budgets.
Take into account the role of the
Category Dynamics category : is the category stagnant or
growing? Is there down-shifting in the
category? Is it impacted by the
economy?

Portfolio Management Rules Build a Portfolio Management

Marketing Mix Principles:
Based on measurement & norms
discipline by understanding how the
investment of one business impacts the
portfolio investment.
What works best? What do we know
from norms? Note that differences in
the size of the business, purchase
frequency, penetration, and brand
share can drive ROI differences.

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From Total ROI to Consumer Insights: The Nielsen
Advantage

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 Consumers respond differentially to marketing:
Nielsen models measure this difference.
• Besides “national” ROI metrics, Nielsen also provides “consumer” ROIs
• Consumer groups based on AMAI survey results

BehaviorScape Framework
• A/B Educated
professionals in
Social-Economic Level modern homes.
Family Income
BehaviorStage A/B C D+ D/E
+$82,000 pesos
New Family
FHHs <40 and Oldest Child <6 0.4% 3.0% 3.1% 5.2%
• C Educated mid level
Young Family business people,
FHHs <40 and Oldest Child 6-11 0.6% 3.8% 4.3% 6.3%
teachers, technicians.
Family with Teens $11,000 to $81,000
FHHs <40 and Oldest Child 12+ 0.6% 4.1% 4.5% 6.3% pesos
Established Family
FHHs 40-49 with Any Kids 1.1.% 5.6% 5.4% 5.8% • D+ Less educated
workers, often in
Mature Family
FHHs 50+ with Any Kids 0.7% 3.0% 4.0% 4.3% informal commerce.
$6,000 to $10,000
Young Couple
0.4% 2.2% 2.4% 2.5% pesos.
FHHs <45 No Kids
Mature Couple
0.9% 3.4% 3.9% 3.0% • D/E Laborers and
FHHs 45-59 No Kids
itinerant workers.
Senior Couple Income less than
FHHs 60+ No Kids 0.8% 2.4% 3.5% 2.6%
$6,000 pesos
Total 5.5% 27.4% 31.0% 36.0%

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Example: Advertising Response by Mexican
Lifestyle Segments
1) Measure the “Average Household” ROI = $1.05
2) Quantify differences in ROI using consumer
demographics data

Television Advertising
Response/ROI Summary

Consumption Response ROI TV Advertising ROI

Index Index Index Potential
Lifestyle A/B 115 100 115 $1.21
Lifestyle C 111 83 91 $0.96

Lifestyle D+ 104 52 54 $0.57

Lifestyle D/E 79 148 117 $1.23

Average Household 100 100 100 $1.05

Highest ROI potential for this brand’s TV:

Lifestyle D/E ROI = $1.23 (compared to $1.05 average)

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Targeting more responsive consumer segments
can increase ROI

Action: Target Lifestyle C

$1.21 Consumers Through Media
$0.93

TV Shows Online Ads Magazines

What are the media consumption habits of
Lifestyle C Lifestyle A/B consumers in Lifestyle C?

Result: Increase in Total Media

ROI and Response

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 Balancing the Short-Term & Long-Term:
What We Know from our Research
• Media has a measurable impact on
brand penetration both in the current
year and the subsequent one. Impact of Media on
• Media prevents churn and increases trial, thus leading Brand Penetration*
to true buyer gains (positive longer term effects)
– Media has both “re-distribution” and “expansion” benefits.

Incremental Penetration
– Going dark on media increases churn and decreases trial.

• Promotion does not impact brand

penetration in the longer term.
• Promotions cause both churn and trial, in effect losing
buyers on one hand while gaining buyers on the other
– Promotions therefore tend to increase price elasticity

• Category actions matter a lot – it’s your

Year One Year Two
share of activities rather than how
much you do...
– Category promotion rates have more influence on trial & * Based on US FMCG Study
churn than a brand’s own rates

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 Argentina Case Study: The Long-Term Effect
of Marketing in Recession
2002 Argentina Background:
A large FMCG brand continued to spend on
• Economic instability, high media during the recession
unemployment
•More rationalized purchases
• Brand Switching, looking for price-
quality benefit
•Increased Price Sensitivity
•Once the economic stability began, Media ROI Trends
the consumers slowly began to buy
again the brands they used to
purchase before the crisis

While returns were low during the recession,

they increased dramatically during the
economic recovery, giving the brand a
competitive advantage!! 2002 2003 2004 2005 2006

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Increasing Consumer Touch-points: Does
Digital Media Work?
Digital ROI is measured to be 30%
Digital ROI indexed to TV *
higher than TV ROI in FMCG
130
What drives effectiveness? 100
•Content / Creative
•Placement / Website
What drives high ROI?
•Effectiveness / Response
•Lower cost
Digital TV
What tactics work best?
•Email, Paid Search, Broadband
advertising
* Based on US and EU FMCG Studies
•Neither reach nor frequency
guarantee success
•High click-through does not
guarantee high ROI

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Top 5 Things to Remember for your Marketing
Budget

1. All consumers not equal in response – understand and target your most
responsive consumers.

2. Brand communication investment is crucial to maintain or increase your user

franchise – promotional activities alone will not achieve this.

3. As the traditional media market fragments, digital technology offers new and
innovative ways to communicate with your consumers in an ever more targeted
way. TV generally dominates as a volume driver, especially for big brands.

4. Digital works best when synergised with other brand activities and is well
targeted – it should be part of a holistic campaign.

5. Make your investments work as hard as possible through maximising both halo
and synergies.

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Realizing Improvements in Marketing ROI: Nielsen Process
Bringing together our experience in…..
- 30+ Countries
- 100+ Brands
- 10+ Years

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Nielsen works with clients to create a best-in-
class Marketing ROI program.
Right Customized Expert Analysis Continuous
Program Set Models & Application & BIC Marketing
Up Interpretation Learning Mix Program

Multi- Models “fit to Senior Mix Marketing Mix Improvement

functional purpose” expertise a process, not in marketing
participation & an event ROI
buy-In from all Right Integrate
levels of the specification client in “Test & Learn” Integrated
organization interpretation ROI-based
Right trade-off What-if planning &
Client between Integrate other scenarios decision
leadership as speed & research or making
sponsors flexibility data available Meta-
learnings

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Thank You!!

Questions?

Confidential & Proprietary • Copyright © 2009 The Nielsen Company