Analytics: Creative Force and Decision Support Tool
Meet James Walker. Prophet’s newest senior partner will be spending the foreseeable future hopping between his home in the U.K. and the States as he helps bring analytics to life for savvy marketers. He’s spent the last 20 years in the marketing sciences, on the big agency (J. Walter Thompson), big consultancy (Accenture) and entrepreneurial sides. He recently shared his views of the new practice area he’s leading, and a peek at other interests that occupy his time.
Why is analytics important to you?
Analytics unveils truth and beauty. It's like a sculptor chipping away at marble and revealing the hidden art beneath. Is he revealing it or creating it? That's an interesting question for analytics. I see analytics as being quite a fun and creative thing to do.
How do you view analytics?
It's about harnessing data to make more effective and more fundamental marketing decisions. And by more fundamental, I mean analytics is a creative force, not just a decision support tool – one that helps marketers see the world through new eyes. It’s important in light of the marketing communications revolution of the last decade, which has created the need to look at ecosystems of brands and so better reflect real consumer behavior. We see it as bridging the gap between marketing and CRM-type activities to really harness customer data for marketing.
Why is Prophet breaking out analytics as a stand-alone practice?
We're reflecting the fact that clients are framing their questions as distinct analytics questions. Also, by creating a separate analytics business, we can focus on our offering, develop the tools, hire staff, etc. We are giving it the level of attention and focus that our clients are giving it. But what’s really powerful about our analytics is the connection with the other practices. Obviously a brand architecture project can lead into channel strategy, SKU pricing, etc. Or brand portfolio work can be activated by marketing mix and allocation models. Less obviously, I see a lot of connectivity with innovation, e.g., using PLAYSTUDIO to kick off a project by exploring potential marketing drivers, and design, e.g., using infographics to make the output of the models come to life.
How will Prophet’s analytics practice differ from typical approaches?
Prophet knows about brand and about consumer behavior – our approach to analytics builds on these strengths. Reflecting on how the world really works, and how our clients are asking us to think, there are six ways in which our approach is different:
1) We look at systems of brands interacting, which is much more realistic than just artificially modeling one brand at a time. If we increase sales, does the market grow? Which brands do we steal from? Do we increase trial or re-purchase, purchase frequency, etc.?
2) We build models with a "brand entropy" component versus relying solely on base sales. In the absence of marketing support, just like an airplane without thrust, the sales base of a brand falls away.
3) We look at multi-year scenarios. Swapping budgets around in year one has a very different effect than a shift in budget size/allocation sustained over three years.
4) We optimize against both return on investment and/or brand value. The two different optimization objectives can result in quite different allocations. Creating long-term brand value is what most concerns our best clients.
5) Where relevant, we build system models (like a champagne fountain, or a gearbox of cogs working together) that decompose marketing payback in terms of acquisition, RPU, churn-reduction, and cross sell, etc. effects. These are much more vivid than what a modeling boutique would typically produce, and far more useful to clients wanting to play out acquisition versus retention strategies.
6) Most boutiques have a 20th century lens and think in terms of traditional GRP/ advertising models. Then there are the analytics shops in the digital ghetto. Brand modeling (awareness, etc.) and ROI modeling tend to be distinct, and that's a mistake. Our models embrace brand metrics versus taking a very mechanical view of ad spend/sales. We are unique in bringing together all these different elements in drawing upon our Prophet brand heritage.
We’ve heard the term “Big Data” used lately in conjunction with analytics. Can you explain it?
It really means CRM 2.0 in that it facilitates personalized 1:1 communication with your customers, informed by everything you know about them. We see it as a "collaboration" between our clients and their customers. CRM is not about figuring out the cheapest offer that's enough to keep a customer, but creating a solution tailored to the customer's needs. We’re not about building a better mousetrap for Big Data analytics, but about re-defining a new CRM “flavor” that is less transactional and more about marketing. We’re making sure “M” is for Marketing, not "management." It’s really about total customer marketing.
Tell us more about your pre-Prophet experiences.
I've had the most amazing last 20 years – I have been very lucky. I founded a consulting group at J. Walter Thompson, was part of the launch team at MindShare, helped set up Brand Science and sold it to Omnicom, and Edge, which we sold to Accenture. I spent seven years as an Accenture partner building a global analytics business. And along the way, I've been a partner in a nightclub and a film company – Mofilm, which hosts short film and make-an-ad competitions in partnership with movie festivals all around the world.
So there is life outside of analytics?
Absolutely! Of course, being a dad to teenage children is a big job! But I also support a charity called 3rdWorldhope, which builds orphanages in Africa. I've been busy with some UN projects around films and art. I ski, have raced cars on tracks and on ice, and was thinking of collecting vintage helicopters because the engineering on them is amazing…but was dissuaded by the safety risks! Now, I'm dividing my time between London and New York, and apart from having shoes and suits mismatched in different apartments, that juxtaposition in itself is quite exciting.
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