Capability Helps Entertainment Marketers Maximize ROI

As the cost of producing and releasing movie titles and DVDs climbs, entertainment companies are justifiably asking their marketing departments to help identify marketing investment areas that will stimulate growth and increase profitability. At the same time, company executives are looking to increase visibility and accountability through return on investment metrics around skyrocketing marketing budgets.

To meet this demand, marketing needs accurate data, powerful and user-friendly applications, predictive modeling techniques and transformational support to help assimilate these capabilities to drive marketplace and competitive advantages. In most cases, IT departments are not set up to successfully identify, collect, integrate, cleanse and align the third party and internal data sources on an ongoing basis to meet the ever-changing requests from marketing.

At Accenture, we think there is a better approach. By choosing application outsourcing, companies can enable these marketing processes in a faster, more effective way to achieve high performance in marketing.

Gone are the days of a $20 million dollar movie release. Now entertainment companies are spending upwards of $200 million to market and distribute a movie and to develop promotional materials, only to watch sales in theatrical and home entertainment continue to dwindle.

Not surprisingly, the marketing department is being scrutinized for this downward spiral. Marketing is being held increasingly accountable for proving return on investment. Using historical marketing strategies and tactics, or “gut instinct” marketing, is no longer feasible or even advisable, especially as the proliferation of new media channels further fragments the number of ways to market a movie or a DVD to an audience.

To evaluate marketing effectiveness, marketing departments must ask some critical questions: What extent is marketing helping the company achieve its objectives? Are we investing our marketing dollars in the right media types and the right geographies to maximize return on investment? How much sales revenue does each marketing dollar drive? What specific marketing investment variables actually produce results?

Answering these questions is not easy. It takes scientific marketing methods, validated marketing data, powerful analytical applications and predictive modeling capabilities to make informed marketing decisions that will drive the business toward high performance.

To derive answers internally, entertainment companies must integrate a number of internal marketing data sources with media, public relations and econometric data, and then align this marketing variable data with sales profitability data. After cleansing and validating the data, marketing would have a historical view of the past effectiveness of marketing campaigns but no way to convert the data into a predictive model to drive future marketing strategies. IT would need to develop additional tools to make the marketing data valuable for planning marketing campaigns.

In most cases, an entertainment company’s internal IT department simply does not have the specialized skills required to deliver these tools to the marketing department in the tight timeframe required. In our opinion, we think application outsourcing is a better answer.

Time and money are the key drivers of our position. Building and deploying internal marketing performance management capabilities is a lengthy process. It is also expensive to install the technology infrastructure and adopt the necessary processes to improve marketing effectiveness. To take it a step further and achieve high performance in this area, entertainment companies also would need to build diagnostic dashboards, simulation capabilities and the ability to feed optimized marketing data into forecasting and demand planning tools.

Clearly an internal marketing effectiveness development effort would only detract from an entertainment company’s branding efforts and marketing. And it would undoubtedly add more pressure on the marketing department.

The faster and more cost-effective choice is to use application outsourcing to achieve marketing effectiveness. Entertainment companies can outsource the full marketing performance management spectrum—from integrating and analyzing internal and external marketing data to generating predictive marketing models and managing marketing resources.

With this approach, a company can choose whether to own and maintain its marketing models or to outsource the models and use decision support tools delivered directly to the desktop to drive marketing strategies.

In addition to saving time and money in infrastructure costs, application outsourcing marketing effectiveness applications and processes also can help entertainment companies achieve a number of benefits. These include being able to:

• Drive effective and efficient marketing spend
• Develop more effective operational media plans
• Use optimized baseline models and demand planning tools to generate increased revenues and profits, as well as improved forecasts.

Perhaps most importantly, application outsourcing can satisfy entertainment executives’ efforts to increase revenues and reduce expenditures while allowing marketing to keep focused on its most important objective: building brand loyalty—with marketing budgets and campaigns that are in check.

Pat Cummings is a partner in Accenture’s Marketing Sciences group and Kevin Westcott is a partner in Accenture’s Media & Entertainment group.

To achieve high performance in marketing, contact Accenture. We have helped a number of clients achieve marketing effectiveness through application outsourcing and improve marketing return on investment an average of 14 percent in the first year of working with us. Our core solution, comprised of data collection and cleansing, analytics, modeling, FutureView(TM), Solomon(TM) optimization tool, and our dashboards, are patent pending.