1. Marketing Response
Understanding the complete marketing ROI for Sony Australia
May 2011
Google Confidential and Proprietary

2. Sony
Australia
Background
• Sony
Australia
operates
through
mul3ple
online
and
offline
channels
• Online:
products
are
distributed
directly
via
Sony
Style
(online
shop)
and
indirectly
via
retailers/dealers
• Offline:
full
product
informa3on
and
demonstra3ons
are
available
in
Sony
Centre
showrooms
as
well
as
at
other
retailers/dealers
• Major
spor3ng
events
are
used
as
a
theme
for
promo3onal
campaigns:
release
of
the
new
BRAVIA
3D
was
joint
with
FIFA
World
Cup
2010
• Offline
Media
predominates
in
marke3ng
and
communica3ons
• TV
and
Print
are
the
largest
propor3on
of
total
marke3ng
investment
Google Confidential and Proprietary 2
Google Confidential and Proprietary 2

3. About
the
Project
Research
Objec>ves
• To
understand
and
quan3fy
the
effec3veness
of
Sony
Australia’s
marke3ng
and
media
spend
in
driving
Sony
TV
sales,
par3cularly:
• To
evaluate
the
role
of
paid
search
in
Sony’s
marke3ng
ecosystem
• To
understand
the
role
of
Sony’s
paid
and
owned
media
(e.g.
website)
in
driving
sales
• To
op3mise
the
marke3ng
and
media
mix
to
generate
greater
revenue
from
the
same
level
of
investment
Google Confidential and Proprietary 3
Google Confidential and Proprietary

4. Methodology
Econometric
Modelling
World-­‐Class
Marke3ng
Science
+
Real-­‐World
Industry
Exper3se
All
data
analysis
was
conducted
by
MarketShare
in
December
2010
•
• Using
Sony
Australia’s
internal
and
proprietary
data
(May
2007
–
Aug.
2010)
• Sony
TV
sales
volumes
and
revenues
(split
by
TV
screen
size)
• Pricing
• Website
data
(visitors,
conversions)
• Marke3ng
and
Media
costs
• Search
volume
data
from
Google.com.au
• MarketShare
proprietary
marke3ng
database
• Mul3ple
econometric
models
(mul3plica3ve
logarithmic
3me
series)
were
constructed
to
understand
total
Marke3ng
ROI
by
media
channel
and
inform
future
op3mal
media
resource
alloca3on
Google Confidential and Proprietary 4
Google Confidential and Proprietary

5. The
Offline
World
What
are
the
drivers
of
Bravia
offline
sales?
Google Confidential and Proprietary 5
Google Confidential and Proprietary

6. Drivers
of
Bravia
offline
sales
Offline
Sales
Volumes
September
2009
–
August
2010
TV,
Print,
Outdoor
Pricing
Paid
Search
+3%
Seasonality
Base
Sales
33%
October November December January February March April May June July August
2009 2010
Google Confidential and Proprietary 6
Google Confidential and Proprietary

7. Drivers
of
Bravia
offline
sales
Offline
Sales
Volumes
September
2009
–
August
2010
79%
of
offline
sales
are
non-­‐marke3ng
driven
3%
5%
2% 2%
7% 1% 1%
35% 2%
Print, TV and
Paid Search are
the top 3 drivers
21%
of
offline
sales
are
of offline sales. influenced
by
marke3ng
9%
33%
‘Other’
Category
includes
sponsorship
(incl.
FIFA
2010
World
Cup)
and
retailer
marke3ng
Understanding
of
ROI
of
display
within
the
media
mix
was
compromised
by
a
lack
of
data
rela3ng
to
Display
investments
over
the
period
analysed.
Base sales volume includes influence from existing store network, employee workforce, existing infrastructure distribution, seasonality, underlying consumer demand, etc. Google Confidential and Proprietary 7
Google Confidential and Proprietary

8. Marke3ng
ROI
How
to
op3mise
media
spend
and
maximise
sales
Google Confidential and Proprietary 8
Google Confidential and Proprietary

9. Understanding
the
effec>veness
of
marke>ng
spend
Methodology
• Econometric
models
take
advantage
of
natural
varia3on
in
both
marke3ng
spend
and
sales
levels
over
the
3me,
e.g.
during
the
analysis
period
(May
2007
–
Aug
2010)
• This
varia3on
makes
it
possible
to
plot
response
curves
for
each
marke3ng
channel,
which
in
turn
allows
the
measurement
of
ROI
Media
Response
Curve
Historical
Spend
Once
the
responsiveness
of
each
Weekly
Sales
(units)
media
in
driving
sales
is
known,
it
is
possible
to
define
an
op>mal
marke>ng
mix
for
future
campaigns
to
deliver
the
maximum
ROI.
Weekly
Media
Spend
Google Confidential and Proprietary 9
Google Confidential and Proprietary

10. Marginal
ROI
–
Where
to
spend
the
next
dollar
to
get
maximum
return?
At
the
margin,
the
next
dollar
is
best
invested
in
Paid
Search,
Print,
and
Subscrip>on
TV
Subscrip>on
5 TV
TV
Print
Radio
Outdoor
Paid
Search
4.3
Indexed Marginal ROI
2.6
2.7
-­‐0.5
-­‐0.1
-1
-­‐1
Return
on
marginal
investment
(ROMI)
quan3fies
the
$
return
on
the
next
$
invested.
Posi3ve
ROMI
indicates
current
underspend
–
and
a
recommended
increase
–
whereas
a
nega3ve
value
indicates
overspend.
Op3mal
spend
(and
therefore
overall
ROI)
occurs
when
all
ROMIs
are
driven
to
zero
–
this
explains
the
direc3onal
changes
illustrated
in
the
next
slides.
Understanding
of
ROI
of
display
within
the
media
mix
was
compromised
by
a
lack
of
data
rela3ng
to
Display
investments
over
the
period
analysed.
Google Confidential and Proprietary 10
Google Confidential and Proprietary

11. Op>mising
Media
Budgets
TV
and
Subscrip>on
TV
To
maximise
ROI,
Sony
Australia
should
reduce
spending
on
TV
and
increase
spending
on
subscrip3on
TV
TV
Subscrip>on
TV
Average
Weekly
Incremental
Revenue
(K)
Average
Weekly
Incremental
Revenue
(K)
Optimal
spend
Increase
spend
in
Historical Subscrip3on
TV
spend
Optimal
Historical spend
spend
Decrease
spend
in
TV
Average
Weekly
Spend
Average
Weekly
Spend
Absolute
values
for
average
weekly
revenue
and
spend
are
hidden
for
client
confiden3ality
Google Confidential and Proprietary 11
Google Confidential and Proprietary

12. Op>mising
Media
Budgets
Print
and
Radio
To
maximise
ROI,
Sony
Australia
should
increasing
marke3ng
spend
on
Print
and
decrease
spend
on
Radio
Print
Radio
Average
Weekly
Incremental
Revenue
(K)
Average
Weekly
Incremental
Revenue
(K)
Optimal Decrease
spend
in
spend
Historical
spend
Radio
Historical
Increase
spend
in
Optimal spend
spend
Print
Average
Weekly
Spend
Average
Weekly
Spend
Absolute
values
for
average
weekly
revenue
and
spend
are
hidden
for
client
confiden3ality
Google Confidential and Proprietary 12
Google Confidential and Proprietary

13. Op>mising
Media
Budgets
Outdoor
and
Paid
Search
To
maximise
ROI,
Sony
Australia
should
reduce
spending
on
Outdoor
and
increase
spending
on
Paid
Search
Outdoor
Paid
Search
Average
Weekly
Incremental
Revenue
(K)
Average
Weekly
Incremental
Revenue
(K)
Increase
spend
in
Historical
spend Paid
Search
Optimal
spend
Historical
spend
Decrease
spend
in
Optimal
spend
Outdoor
Average
Weekly
Spend
Average
Weekly
Spend
Absolute
values
for
average
weekly
revenue
and
spend
are
hidden
for
client
confiden3ality
Google Confidential and Proprietary 13
Google Confidential and Proprietary

14. Op>mising
Media
Budgets
–
Total
Campaign
With
the
same
budget,
an
op3mal
media
mix
delivers
an
addi>onal
3-­‐5%
in
revenue
Total
Media
Spend
Average
Weekly
Incremental
Revenue
(K)
Opportunity
=
3-­‐5%
.
.
.
by
adjus3ng
spend
levels
on
individual
media
channels
Average
Weekly
Spend:
Historical
Op3mal
Absolute
values
for
average
weekly
revenue
and
spend
are
hidden
for
client
confiden3ality
Google Confidential and Proprietary 14
Google Confidential and Proprietary

15. How
many
Sony
TV
sales
would
an
incremental
weekly
investment
of
$10k
drive?
Assuming
all
other
media
investments
are
Weekly
Sales
(units)
held
at
the
current
level,
it
is
possible
to
understand
the
effec3veness
of
incremental
media
spend
in
a
single
channel
on
sales
Weekly
Media
Spend
+
$10k
weekly
investment
drives
incremental
TV
sales
.
.
.
TV
+52
Increases
in
Paid
search
Subscrip3on
TV
+68
investment
will
deliver
Print
+70
the
greatest
return
based
Radio
+32
on
number
of
addi3onal
Sony
TVs
sold
Outdoor
+21
Paid
Search
+72
Understanding
of
ROI
of
display
within
the
media
mix
was
compromised
by
a
lack
of
data
rela3ng
to
Display
investments
over
the
period
analysed.
Google Confidential and Proprietary 15
Google Confidential and Proprietary

16. Project
Summary
Op3mum
Alloca3on
for
2011
Google Confidential and Proprietary 16
Google Confidential and Proprietary

17. Move
towards
Digital
Recommenda>on
for
op>mising
budgets
in
2011
2010
Media
Mix
Recommended
2011
Media
Mix
Paid
Search
Paid
4%
Search
12%
TV
Outdoor
TV
25%
21%
39%
Outdoor
14%
Radio
Print
Radio
Subscrip3on
TV
6%
Print
9%
17%
Subscrip3on
TV
16%
27%
10%
Investment
by
Channel
Historical
Op3mal
-37% +55%
+65% -30%
+220%
-37%
TV Subscription TV Print Radio Outdoor Paid Search
Understanding
of
ROI
of
display
within
the
media
mix
was
compromised
by
a
lack
of
data
rela3ng
to
Display
investments
over
the
period
analysed.
Google Confidential and Proprietary 17
Google Confidential and Proprietary

18. Summary
Sony
customers
are
almost
equally
responsive
to
TV
and
online
1 marke3ng
(these
factors
drive
5%
and
3%
of
sales
respec3vely);
however,
TV
represents
nearly
50%
of
Sony’s
total
marke3ng
budget
At
the
margin,
the
next
dollar
of
marke3ng
budget
is
best
invested
in
2 Paid
Search,
Print,
or
Subscrip3on
TV;
of
these,
Paid
Search
has
the
highest
ROMI
(addi3onal
$10k
investment
would
drive
+72
unit
sales)
To
reach
the
op3mum
media
mix,
Sony
Australia
should
increase
3 spending
on
Subscrip3on
TV,
Print
and
Paid
Search,
and
decrease
spending
on
TV,
Outdoor
and
Radio
By
shining
their
media
mix
toward
the
op3mum
balance,
Sony
4 Australia
could
increase
total
revenue
by
3-­‐5%
with
the
same
marke3ng
budget
Google Confidential and Proprietary 18
Google Confidential and Proprietary

19. Appendix
Google Confidential and Proprietary 19
Google Confidential and Proprietary

20. Bravia
TVs
Situa>on
Analysis
• Evolu3on
of
Bravia
from
LCD
to
3D
over
2009-­‐2010
coincided
with
the
cyclical
growth
of
base
sales.
Incremental
sales
had
declined
mostly
due
to
seasonal
factors
• Price
was
the
major
driver
in
driving
Bravia
LCD
sales
due
to
a
series
of
promo3ons:
Bravia
+
PS3
(Oct-­‐Nov
2009)
and
Christmas-­‐3me
offers/retailer
promo3ons
• The
June
2010
release
of
Bravia
3D
was
driven
by
Media:
it
contributed
almost
30%
to
total
sales
as
opposed
to
only
10%
during
the
pre-­‐release
period.
Website
visits
almost
tripled
as
online
query
ac3vity
went
up
• Sony
grew
its
media
presence
in
the
marketplace
over
the
three
year
3me
period
of
the
analysis:
they
increased
share
of
voice
from
12%
to
32%.
Sony
invests
heavily
in
offline
media,
where
TV
contributes
close
to
2/3
of
total
marke3ng
spend
Google Confidential and Proprietary 20
Google Confidential and Proprietary

21. About
MarketShare
World-­‐Class
Marke3ng
Science
+
Real-­‐World
Industry
Exper3se
• Strategic
analy3cs
firm
deploying
industry’s
most
advanced
analy3c
models
for
marke3ng
effec3veness,
ROI
and
alloca3on
• Reputa3on
for
being
the
most
innova3ve
firm
in
the
category,
with
focus
on
advanced
math,
thought
leadership
and
ac3on
• Significant
experience
with
new
media,
including
search,
social
networks
and
display
• Heavy
emphasis
on
applica3on
of
analy3cs
to
make
berer
decisions
going
forward
• An
independently
owned
company
delivering
100%
objec3vity
in
assessing
marke3ng
effec3veness.
Google Confidential and Proprietary 21
Google Confidential and Proprietary