Market mix modeling, the industry standard for gauging ad performance, is on its death bed. Laura Desmond wants to be the one to pull the plug.
Fortunately for her, as CEO of Starcom MediaVest Group, she’s in position to do so. Starcom, a Publicis subsidiary, is one of the world’s largest media planning and buying agencies, with 110 offices in 67 countries. Its $27 billion worth of billings (a published estimate; Starcom doesn’t share its internal figures) comes from clients like Mars, Kraft Foods, Procter & Gamble, GM, and The Walt Disney Company.
Two years ago Desmond decided to flatten and rebuild Starcom MediaVest around what she calls “the human experience.” She bulldozed the company’s regional silo structure, reorganizing them into “market clusters,” and led Starcom deeper into digital. In 2010, that category comprised 28 percent of overall business, a 47 percent increase over ‘09.
In her crusade against market mix modeling, Desmond is unwavering, even though she may be alone for now. It’s still the predominant tool to predict ad effectiveness, and it’s used by a wide swath of Fortune 500 companies and agencies. Still, Desmond says the system is flawed and antiquated. “To be provocative, I believe it will become obsolete,” she adds.
Part of the problem is inaccurate data. It’s a well-worn complaint because, for the most part, it’s true. Audience measurement stalwarts like comScore and Nielsen haven’t quite nailed it yet, especially when it comes to digital impressions. Using backward-looking data to predict future performance doesn’t work either. The technique simply doesn’t translate to the fast-moving digital world. Lastly, market mix modeling measures business performance, not consumer attitudes and behaviors.
Desmond, who will discuss the future of media and marketing with Federated Media chairman John Battelle at today’s Conversational Media Summit, says the industry is moving toward consumer experience-driven marketing instead.
She should know—she’s been driving her company forward with that idea for the past two years. “Scale and power do not give you a right to succeed in the future anymore,” she says. “It’s easier than people believe to become a dinosaur company [in this industry].”
The strategy has paid off. In March, Starcom MediaVest Group used its “human experience” argument, alongside its own modeling tools, to lure Microsoft’s $1 billion media buying account away from Universal McCann. Those home-baked tools include something called “contact destination,” which measures consumer behavior and compares their feelings about competing brands.
There’s also intent tracking, which predicts likeliness to act on an ad based on media consumption. “We went to Microsoft with a full-on approach,” she says. “Clearly media is going from buying static 30-second ads to a much more dynamic set of experiences.”