Mark Stouse, CEO and founder of Proof, was last week announced by Analytics Insight® to one of the Top Ten Most Influential Analytics Leaders of the year. Mark revelas marketing’s power to multiply and optimize business performance with Automated Marketing Mix Modeling (AMMM).
Proof Analytics is the world leader in Automated Marketing Mix Modeling, serving large B2C and B2B companies all over the world with offices in the US, India and Europe. The company provides answers to its clients’ critical questions:
- How to best balance the budget between sales, PR andmarketing?
- How to adjust the spending over all different marketing activities like social media ads, search, tradeshows, PR, TV, Radio, retargeting, ABM etc. – to optimize the marketing mix?
- How to bridge the language gap between finance and marketing and make market reporting more financially oriented?
When trying to solve the question around how to optimize the marketing and communication mix, people normally have three ways to do it:
Visualization of data – There are still companies thinkingthat visualizing the data is analytics. The issues here are that in a go-to-market mix, people often have +50 activity types and visualization that can’t show correlations, time lags nor how the variables influence each other.
Multi-touch attribution – Trying to analyze what is driving what, with which magnitude and delay, many try to follow a digital buyer’s journey. Deletion of cookies, multiple devices, inability to analyze offline activities and the inability to analyze activities happening on social media, news media, review sites etc. are making this approach very limited and often leads to very short-sighted analysis. Overspend on high conversion marketing is a common consequence of these limitations.
Marketing Mix Modeling / Regression-Based Econometrics – This is the golden standard among the biggest marketing spenders in the world. It uses regression modeling to understand and optimize for value.Traditional Marketing Mix Modeling (MMM) is the golden standard for many Fortune 500 companies, connecting marketing investments to impact on revenue, margins and cashflow. But since it is very complex and requires difficult- to-hire analysts and data scientists, MMM also is very slow, difficult to scale, and very expensive. These issues are why most companies using traditional MMM only manage to run it once or twice a year for a few selected markets and product categories. Proof Analytics has automated the most time-consuming parts of the traditional MMM process making it faster, better and less costly. With the company’s solution, people can add new variables at any given point and get their answers in minutes instead of weeks or months. Proof’s platform enables companies to use MMM for all their markets and product categories – making it part of their ongoing reporting and optimization process. The Proof Analytics platform helps customers prove, improve and optimize the value of their Marketing and Communications investments.
Leadership Lessons for a Better Teamwork
A leader has authority and certainly makes key decisions, but he is there to serve their team members, not the other way around. According to Stouse, “a leader serves his team members by making it easier for them to do more, do it better, and do it faster than they could if the leader didn’t exist. If your team won’t say that about you as a leader, you’re not one.”
The Challenges of Starting as a Marketing Leader
Taking about the challenges he faced in his journey, Stouse said that the biggest one at the very beginning was to simply understand the problem in front of him. He was a marketing leader, not a data scientist.
The last time he had an exposure to regression was at university, and that was challenging for him. But 15 years later, as Stouse worked to learn and solve the marketing ROI problem, it was different for him. He learned a lot very quickly.
But the next challenge was to some degree the hardest, and that was to convince the business leaders he worked with that a marketing leader actually understood business, finance, and analytics well enough to be taken seriously in that regard.
Vital Attributes for Innovative Leadership
An innovative leadership should know enough about the issues to ask very good questions and know whether the answers he has received are good ones or not.
Stouse sees his role is not to figure out impact/ROI, delayed effects / time lag and variations (among other things). This approach is the only logically and mathematically valid approach to the go-to-market optimization problem.
Nevertheless, MMM has struggled with long delays from data input to the ready actionable analysis (OODA loop). It has also been very expensive and difficult to scale. Proof has made a big change here, using extensive automation to make MMM much more accurate, as well as highly scalable, fast and less expensive.
Leadership Born of Deep Experience
Mark Stouse is the founder and CEO of Proof Analytics. He began working to answer the marketing and communications ROI question in 2004 at the request of the late Mark Hurd, who was then CEO of HP and later became famous as CEO of Oracle.
By 2010, the company had implemented an analytics approach that answered the questions of several top C-suites about the returns on marketing investment, how long it took to get those returns, and a clear view of where marketing spend was in terms of an optimization S-curve.
Five years later, after great success at both Honeywell Aerospace and BMC Software, Stouse and the Proof team created the eponymous software platform.
A Great Leap Forward for MMM Analytics
Great marketing and communications deliver powerful incremental business impact that other parts of the organization could not deliver for themselves.
The problem is that Marketing impact has been unproven in most businesses, leading to an incredibly dysfunctional planning, budgeting and reporting process.
Marketing metrics — impressions, awareness, reach, clicks, etc. — are ubiquitous, underscoring the gulf between how marketers and business leaders have the best ideas in the room, or the best answers to every question.
That’s his team’s job, and if he has hired the right team, that will show very clearly.
Innovation is a Process, Not a Destination
According to Stouse, innovating products in order to make it appealing for target audiences is a very tough thing to learn and to keep balanced in one’s head — if he has found a startup, it’s because he has a very clear, strong point of view about a problem and how to solve it. That’s a must at the beginning.
But after that, a person has to constantly be willing to modify his and her point of view — or the timing of their idea — in light of what the market wants to buy.
Innovation not only has to be consumable; it has to be consumed. Customers are not buying a product or even a service. Customers are seeking to solve a problem that they feel very intensely about. Leaders have to not only solve their team’s problem, but to solve it in a way that makes it easier for them to operate.
This commitment can mean abandoning their current business model. In the end, Stouse believes that any successful product or service is an ongoing collaboration between a company and its customers.
Future of Automation Layered with Human Touch
To this point in time, analytics has been about human powered teams using some very technical software like Stata that still requires a lot of manual work. The result is that analytics is expensive, it’s tough to scale, and it is slow.
The latter is the biggest problem for companies because the amount of time needed to generate the MMM analytics is often so long that the business utility of the results have aged out by the time they arrive.
The solution is automation, but with a persistent human layer. This approach to AI is not artificial intelligence as much as augmented intelligence — it’s not replacing the human as much as arming them to make better decisions using their domain expertise.
‘Having a Nose for Challenges’ is Advisable
Stouse advises leaders to stay humble, love people and appreciate them. According to him, leaders should know the problems and challenges better than they know the solutions.
They need to be discerning about what they hear. Leaders should embrace diversity and inclusion, not only for moral reasons but as an invaluable hedge against bad decision- making.
Stouse says, “Listen, listen, listen. Set the standards and tone for the culture but realize that it’s your team who will actually create it and live it out.”