From Analytics to Action: How Marketing Mix Modeling Helps Inform the Estée Lauder Companies’ Activation Strategy

Beauty Podcast

On Ep. 54 of Earned, we spoke to Doug Jensen, SVP of Go-to-Market Analytics & Activation for the Estée Lauder Companies (ELC). We start the episode by unpacking what Doug’s analytics-focused role entails, and learn more about his path from statistical analyst to business consultant to beauty analytics expert. We then explore how Doug leverages an industry technique called “marketing mix modeling” to understand the impact that various marketing tactics have on ELC’s sales, search, and traffic. Doug explains how measuring all parts of the marketing funnel can help prove a strong relationship between influencer marketing and sales. From there, we dive deeper into the effect that content creators and social media have on consumer sales, before discussing ELC’s viral TikTok campaigns and learnings from the platform. To close the show, Doug emphasizes how his job is not measurement for the sake of measurement, but rather measurement in service of an outcome: brands and marketers making better decisions.

 

We’ve included a couple of highlights from the episode below, but be sure to check out the full video above, or tune into the podcast on Spotify, Apple Podcasts, or Google Podcasts!

The following interview has been lightly edited for concision.

“It’s our way to prove that the earned media investments we’re making are paying off”: How Estée Lauder Leverages Marketing Mix Modeling to Prove ROI

Doug Jensen: One piece of advice I have for analytics people, and anyone in the world, is if you are in marketing or marketing analytics, how do you strive to deliver strong insights? What I mean by that is you really listen to your marketers’ question and then you deliver the answer to that question, and then you follow up with that business partner or that marketer to ensure that the analytics are understood. That whole cycle really makes you become a trusted business partner. I think that's what I've strived to do over my career: make sure that I'm listening, answering questions, and then coming back and making sure that people understand the analytics and what to do with them, and being there to make sure that the decisions are supported by the analytics, and being that trusted advisor.

One of the ways I was able to do that in my career is through an industry technique called marketing mix modeling. It is leveraged by all major companies in assessing the incremental sales and contribution across the entire marketing funnel. Our company hired me to drive and build that capability, and we are using that to measure all of the different marketing and media elements, including earned media. It's been our way to prove to ourselves that the earned media investments we're making are paying off.

Conor Begley: So if you were explaining marketing mix modeling to somebody that was entirely new, what does that process look like? What are you doing, what are the goals, what are the inputs?

Doug Jensen: Marketing mix modeling is essentially explaining some dependent variable—and that could be sales, it could be search, it could be traffic—and then what you do is you build models to take all the other independent variables, which are the explanatory variables that explain the dependent variable. So what we do at our company is we build models at upper funnel—desirability is what we call it—and we look at Google search volume. One of our brands is Clinique. If more people search for the brand Clinique in Google search driven by the other marketing levers, then that's what we're explaining in the model. And if you take a model on traffic, you're trying to figure out, are people coming to your site more often because you did some marketing or media element?

Models were always built on sales, which is bottom of the funnel. But for us, what was interesting is that early on in using Tribe’s data in particular—I want to say five, six years ago—we were trying to figure out whether influencer marketing and influencer EMV were driving sales. We initially couldn't detect a relationship, and what we realized is you're not always looking for a direct sales relationship. You're looking to see whether influencers and creators are driving desirability, and then driving traffic, and then ultimately driving sales. By changing our approach to measure all parts of the funnel, we're actually able to show and prove that it's a strong ROI. My ability to know what those models are, and then be the arbiter of their results with our brands and our brand marketers, has been the core sweet spot of how I've grown in my career.

Estée Lauder’s Learnings from Going Viral on TikTok

Conor Begley: I want to talk TikTok for a second. What have been some of your learnings about TikTok so far from an analytics perspective, as well as what your brands are seeing? I have to imagine that it's a hot topic within Estée Lauder as well, and an area of focus for the marketers.

Doug Jensen: Yeah, it is a hot topic at our company, and I know that Somer Tejwani, my friend from Too Faced, was on your podcast, and she talked about how TikTok is so new and how we've all had to learn and transform how we compete there, because in 2018, no one was talking about TikTok. I would say at this point in its evolution, we recognize clearly the importance of TikTok and the various ways that we need to show up, and it's in a couple different ways, right? If creators discover us or in some cases rediscover us, meaning our brands or our products, we need to react to that. And then on the other hand, we need to work to create our own campaigns.

We've had really good success with some recent campaigns, if I may call out a couple of examples. So Estée Lauder, our namesake brand, launched a TikTok campaign a year ago called #NightDoneRight. It drove nearly 13 billion views and led to the creation of almost two million videos. It challenged creators to educate a younger audience on how important it is to take care of your skin at night. The product there is called Advanced Night Repair for Estée Lauder. Then our Clinique brand, which is an overall skincare and makeup brand but it has a lot of affinity in the acne space, created a #ZitHappens campaign on TikTok, and that became a viral sensation. There were nearly 10 billion views of that, and that led to about 700k videos on the app.

Those are campaigns that brands do, but a lot of virality happens to you, and it's really exciting and interesting when that happens. Clinique has this product that was born in 1971 called Almost Lipstick. It's in the black honey color, so it's called Black Honey Almost Lipstick. As I said, it was created in 1971, but it went viral in the last year. The number of creators who discovered it, especially creators of color, made the product go viral. And so then the question is, what do you do once that happens? How do you make sure you harness that? I'm really in awe of our brand teams who not only create these new campaigns, but react to those viral moments. You really have to be on top of it.

Everybody in the brand is studying TikTok every day, so suffice it to say, it's an incredibly valuable platform for us. But it's not the only thing that we do within the earned media space. To your point earlier, we use your data to dimensionalize where all the influencer Earned Media Value is coming from, and Instagram is still the primary platform. It's just that TikTok is emerging, and everyone knows that you need to play differently. This is obvious, but I'll say it anyway: you cannot take a piece of content that you create on Instagram and put it onto TikTok. It won't work. Everybody knows that, right? But then the question is, how do you find the right creators, and how do you make sure that those creators have the right briefs so that they produce authentic content if you're working with them? It's not easy to do that—and again, I'm in awe of our brand teams who have cracked the code to make these really great campaigns.

Conor Begley: Yeah, I wouldn't say everybody actually knows. It costs a lot of time and money and effort to create brilliance. But I think that the devil is in the details where there are specific inside jokes, there's a specific understanding to the way that you choose music, there's a specific understanding to the community that's there, and what they think is interesting has a big effect on a piece of content’s success. It's a real investment to be able to create great content across all these different platforms, but I think if you can get it right, obviously the payoff is there, right? The “TikTok made buy it” trend tends to occur.

Doug Jensen: Yeah, and then the problem you'll have is TikTok made me buy it, and then we go out of stock, and then how do you react?

Conor Begley: I've always thought about the supply chain in the era of social media and virality, because if something hits hot, how are you supposed to predict that? It's so hard to know that that's coming.

Doug Jensen: Yeah. We do have conversations within our supply chain teams, like, “how do you react to that?" And I don't think anyone's really cracked the code on it. It's really more about reacting to the virality when it happens to you. How do you work with a creator to make sure it's okay if you want to repost their content? And oftentimes then, if the product goes out of stock, you can come back when it comes back in stock and have another campaign related to that. “Hey, you love this product, sorry it was out of stock, and now we have it in stock again." Some of our brands have done that.

You can watch the entire interview here, or listen to the full episode on Spotify, Apple Podcasts, or Google Podcasts. To catch up on our other 53 episodes, featuring leaders from brands like Milk Makeup, Gymshark, Gucci, and Summer Fridays, visit our Earned Podcast page.

 

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