The Evolution of Marketing: Marketing Analytics, Consumer Behavior, and Behavioral Economics

In the past, marketing has been looked at as more of an art than a science. Marketers would create advertising and content and have limited ways to measure the return on the investment. In today’s age, we see marketing has become more quantitative through marketing analysis with an effort to prove a return on investment of advertising and consumer engagement. Metrics typically include impressions, clicks, cost per click, overall spend, likes, comments, video viewings, etc. However, as marketing continues to evolve, it will be critical to take qualitative and quantitative results into consideration when optimizing marketing strategy.

An opportunity for development is the intersection of advertising, metrics, and consumer behavior. If we analyze specific customer interactions with advertising released into the market, we will gain more insight as to what occurs as the customer engages with the brand initially. Why is it that consumers clicked more on this advertisement versus the other advertisement? Did we change the colors or the content and what resonated more? After the customer’s initial interaction with the brand, we must understand the customer journey on the site. We can continue to release advertising in-market but if customers are not converting due to a poor customer experience online, the return on investment from marketing will fail to reflect in the conversion metrics. After all, what is marketing without the sales conversion?

Metrics like sales and clicks tend to be tangible, but at the end of the day the measurement is based on a series of behaviors conducted by humans. In behavioral economics, we analyze psychological, emotional, cultural, and social norms. These factors also influence how people react to marketing and consume products. For example, “The Power of Free” automatically makes the human brain perceive something as exciting and better. If a promotion is Buy 1, Get 1 Free, people are more inclined to respond to this messaging versus a discount of 50% on 2 items. If consumers are more likely to purchase from this type of deal, how can we leverage that behavioral play to drive conversion and price products higher to capitalize on such a deal?

Additionally, we continue to see increasing customization options (i.e., designing your own Tesla car, home security systems, other package bundles, etc.) We as consumers believe we like to have choice, however too many choices can become an issue. Consumers may face decision paralysis when presented with an overabundance of options, thus overwhelming the decision-making process, and resulting in no purchase at all. Conducting research on what aspects of the customization is mentally overwhelming may help marketers to better understand what may be occurring within the customer journey experience and how it impacts company marketing efforts and conversion. 

Another concept is social proof, which is where consumers look to their peers when it comes to purchasing. Consideration is in the middle of the marketing funnel and when considering the consumption of a product, we typically look at reviews or to people we know and trust. This is important because maintaining brand consistency and interactions across all channels can really make or break an experience, and word of mouth travels quickly. As influencer campaigns become more prominent and specific return on investment is still a grey area, we would need to measure influencer’s involvement in marketing campaigns and how they drive behavioral shifts among their social followings. This could potentially be done through pre-survey and post-survey collections.

These behavioral aspects are not always easy to measure when it comes to traditional marketing metrics. Typically, it requires extensive market research through focus groups, interviews, surveys, conducting testing, etc. However, leveraging behavioral knowledge when planning marketing campaigns and strategy can help improve marketing metric performance. To understand the full marketing picture, it’s important to analyze the qualitative and quantitative aspects to tell the story of what is occurring with our marketing data.

The Shift in the Tradeshow Marketing Landscape

Trade shows have been a staple of marketing since long before the internet, and Microsoft Team meetings, were even imagined. Experiential marketing plays a key role in strengthening bonds with customers in both the B2B and B2C space. It allows for the intangible human connection to flourish, and organic brainstorming and collaboration that has led to some of the most innovative ideas in business to come together. Conferences and trade shows were, and still are, a gathering place of industry experts, celebrity speakers, students, and vendors. It is an often overlooked 15-billion-dollar industry that unites businesses from across the world in one place.

However, everything changed in March of 2019 when the Covid-19 pandemic started to ramp up and businesses had to adapt, conducting their operations virtually out of necessity. The “hybrid” conference model had been a relatively new concept in the trade show space limited to scanning badges with your phone on the mobile app and perhaps online chat rooms for the most advanced services. The Covid-19 pandemic expedited this digitization process. Traditional methods of communicating and networking needed to be entirely reimagined to adapt to the new hybrid conference landscape. For conferences and trade shows who had long standing brands established, some for over a hundred years, it was vital to find a solution that would maintain the culture these associations had worked tirelessly to cultivate. Was it possible to replace and replicate the face-to-face human connection? Could the same engagement be seen and encouraged among attendees in a virtual space? Moreover, how could various associations protect their long-standing brands virtually?

Seemingly hundreds of third-party firms rose to answer these questions. Many exhibit floor management platforms, where exhibitors could traditionally upload their physical presence on a mobile floor map and conference websites, pivoted to host video capabilities as well. These ranged from simple list views to massive virtual trade show experiences with 3D floor plans allowing an attendee to navigate through their browser or mobile app as if they were there in-person. These offerings ranged from tens of thousands of dollars for something as simple as a list view, to hundreds of thousands of dollars for fully flushed out 3D events with 24/7 support and chat rooms.

However, these platforms failed to capture a satisfactory percentage of the same experience attendees and exhibitors had in-person. At first, virtual conferences and exhibits garnered a similar attendance as physical shows, primarily by virtue of trusting the association’s brand to deliver a somewhat analogous conference experience. Many exhibitors were willing to test whether it was worth the investment to exhibit virtually, and many exhibitors reaped a disappointing ROI. It is worth noting that few did find success but usually only through external marketing and vigorously advertising themselves in chat rooms. Many had no attendees organically “step” into their booth (enter their open zoom room.) It quickly became apparent that virtual trade shows were a temporary solution until everyone could convene in-person once again.

Virtual conferences were not without their benefits though. The other side of the coin allowed exhibitors to join the program who would never have considered marketing at that conference previously, usually due to pricing or geographic constraints. There was also often a widened audience, sometimes 1.5-2x of in-person events, including those who could not travel to attend the event in previous years (though bringing with them less engagement overall than the fewer attendees at in-person shows). Now that Covid-19 vaccines and testing options have been made widely available trade shows are back in full force. Everyone in the conference and exhibit community, from management agencies to businesses to attendees, are better for it. However, the remnant of the virtual option remains and is now a larger part of the experience than it ever had been before. There may even be a change to the feasibility of online platforms achieving a more satisfactory replication of true human connection through the Metaverse or augmented reality. However, for now, the intangible value of face-to-face interaction will not be completely replaced any time soon.

A Career in Corporate Finance & Why Finance Affects Marketing

What is FP&A, Who Am I, and Why Should You Care?

This is an acronym that you seemingly see everywhere but may not fully understand what it is or what someone in FP&A does for work. FP&A stands for Financial Planning & Analysis generally, but there are also some that describe it as Forecasting, Planning, and Analyzing. I am the current VP of Finance for the Kellstadt Marketing Group, an evening MBA student in the Kellstadt Graduate School of Business at DePaul University, and my day job is in FP&A as a Senior Financial Analyst. I have been working in FP&A full-time for the last 5 years, and there is so much about this career that I enjoy.

The FP&A function is relevant to all, even for those with a focus in marketing. Being knowledgeable in the processes of FP&A will benefit a marketing professional because this strategic partnership encourages conversations that can better equip a team to implement new investments and projects while strengthening the financial team’s accuracy. This ensures professionals in all lines of business are well-rounded in their understanding of the company and their budgets. To broaden your knowledge of FP&A, this post will highlight what financial analysts do and how it’s tied to other areas of the business.

What Do Corporate Financial Analysts Do?

The title can mean so many different things at different companies, but the core responsibilities are usually forecasting, reporting, modeling, and communicating financials. A common misconception is that the only thing required to work in finance is to be good with numbers and have math or technical software skills. It is true - in finance you work with a plethora of numbers and spreadsheets and being detail-oriented and analytical are necessary skills for the underlying finance work. However, it is massively important to have interpersonal and story-telling skills to back up the numbers. Finance starts with partnerships with associates in various business segments such sales, strategy, marketing, etc. and then organizing those conversations in a monetary fashion that is easily digestible by the business.

Let’s walk through an example to paint a picture of this: I have a monthly checkpoint with Jane Doe in the marketing department. She informs me that her department is planning on investing in a contractor to work on a new logo for a product and that new project logo has the potential to increase revenue by 5%. She also states the new equipment she ordered will no longer be delivered this month but is now to be expected two weeks later instead. From this conversation, a FP&A analyst must build a new forecast including the new contractor expense and revenue potential. The forecast must now be re-timed for the delayed equipment and it’s also important to communicate the change with the accounting team to aid in the monthly process as they close the books. The timing of the new contractor expense and payment of the equipment may be out of balance with the planned expenses from upper management which means the analyst must analyze all other business verticals and see if these costs can be implemented. Otherwise, an analyst may have to work with the partner to create a new business investment ask to get more funding for the project.

Now think about multiplying that example for all the business partners one supports in the FP&A role. This includes many projects, costs, delays, new revenue wins, etc. There are many moving parts in finance, so the is where being very detail-oriented is necessary. After digging into the detail, an analyst must report and model these changes to communicate the finances in a more consolidated consumable way to greater finance management and the business stakeholders. To portray this, a report must be generated to show the new forecast with numeric comparisons, graphic visuals, as well as commentary. The best way to get to the heart of the forecast and current state of the finances is to provide high-level bullet points that tell the story of what is occurring within the finances and where the business is going.

Why Would Someone Become a Financial Analyst?

1. Working with Many: In this role you interact with many different teams and meet a variety of people within your organization inside and outside of finance. You cannot forecast what will happen in the organization if you’re not engaged with all the stakeholders. The FP&A teams are often involved in organizational high-level projects from the beginning to aid in the finances, therefore as an analyst you get to learn so much about a company, their products, and team structure just by going through the forecasting process. If you enjoy meeting new people and broadening your scope on your organization, FP&A is a great place to work.

2. Project Autonomy: My favorite part of working in corporate finance has been the people I’ve called my teammates, but I have gotten the most satisfaction from completing stretch goal projects that I worked on autonomously. Finance is open to collaboration, but when it comes to process automation of current reporting, owning a forecast segment, or working on business models for investments you can find yourself having a big role seeing something from an idea to a completed project. These projects are the best way to show your analytical skills and further your professional development.

3. Transferable Skills: A great reason to work in FP&A is that the skills you learn in one team are often extremely transferable to another team. You can easily move within an organization to forecast for certain business segments you find interesting, engage in a new high-level project, or to broaden your network. Within the finance team you learn a lot about the company products and business strategy, and you can find yourself moving to business roles beyond finance after working closely with those business partners and beginning to anticipate their needs. From a systems standpoint, having analytic and technical skills in financial systems and data visualization are highly transferable within teams, organizations, and in the job market.

What are the Pain-Points for a Financial Analyst?

There are so many great aspects being a financial analyst, but like any role there are also a few pain-points in the job you should know before considering a career in corporate finance.

Here are a few challenges:

1. Tasks can feel repetitive: While there are always new projects and high-level goals to focus on during the year, the nature of the job includes repetitive monthly task work. After every month, there is a close process in which you will need to review how the results compare to your forecasts and prepare reporting and communication to various stakeholders on the state of the finances. If you prefer a routine, this is a great line of work for you to join. Personally, I enjoy knowing exactly what needs to be completed and having very clear and definitive deadlines for my routine tasks, but it does feel repetitive from time to time.

2. Money can be emotional: The money involved belongs to the corporation and not an individual, however, there is a sense of ownership by many in the business that can be a challenge to navigate since resources are finite. Working in finance means there will be times when you may have to say no to your business partners who may want to start a new project or hire a new employee that isn’t in the financial plan. While everyone in a corporate office can understand that revenue and cost challenges will come, you may find yourself dealing with someone who takes these decisions, which are not personal, personally. Always make sure to stand your ground, it’s just business.

3. Things can change quickly: Although it may feel like you’re always working on forecasts and gathering the latest and greatest information, the truth is, there will be multiple things that will not go as expected and things can change quickly. Because of this, one must be agile and adaptable. In the role of an FP&A analyst, you may find that one day a project is full steam ahead and the next there is a priority change and all cash flow and sales momentum changes direction. I personally feel this keeps the job very exciting. However, if you feel very confident in your forecast and want a high degree of accuracy, you will see that in business there is no such thing as 100% accuracy over time, as things can change rapidly.

Final Thoughts:

If you have ever wondered what a financial analyst does or how the FP&A team works within the corporate matrix, I hope this has given a high-level idea of what that means from my perspective. Being an active listener, having insightful conversations, and knowing the detail behind the numbers are the keys to success for a role in financial planning and analysis. Through my MBA program and involvement in the executive board of KMG, I have had the opportunity to gain more exposure into the finance behind marketing. Finally, finance impacts all aspects of the business, so understanding the dynamic between finance and marketing will enable better informed financial decisions and benefit your career.