XICA MARKETING SCIENCE LAB (hereinafter referred to as MS Lab) is a community that aims to explore "optimal decision-making" in marketing. A free event exclusively for members was held at the Tokyo venue on Thursday, November 2024, 12.

The event was divided into two parts: a "seminar" where cutting-edge information and success stories on data-driven marketing were shared, and a "lab" where practical knowledge was generated through two-way communication between the seminar speakers and participants. This article reports on some of the content of the seminar.

Speakers/panelist:

Mr. Tsuyoshi Baba

General Manager of Brand and Communications Division, Public Relations and Communications Headquarters, KDDI Corporation

After graduating from the School of Political Science and Economics at Meiji University, he joined Japan Mobile Communications Co., Ltd. (now KDDI).
He has experience in customer service, sales planning, and marketing, and has been in charge of advertising since 2018.
Since 2021, he has been in charge of the Brand and Communications Headquarters, responsible for branding and communication of the corporate brand (KDDI) and business brands (au, UQ, povo).
We are promoting new initiatives that are not bound by the past, such as developing data-driven marketing methods and challenging communication methods using AI.

Moderator

Yoshiaki Hirao

President and CEO of XICA Corporation

Graduated from Keio University Faculty of Policy Management. After his father went bankrupt, he strongly wanted to "eliminate the hopeless sadness in the world." Discovering the potential of statistical analysis as a form of management support while at university, he founded XICA Co., Ltd. in February 2012. Based on statistics and economics, he has provided consulting to many major clients on improving marketing accuracy. With this experience as a background, he has served as product owner for the development of various tools at XICA.

table of contents

Will increased favorability lead to increased sales? How KDDI is clarifying the link between "measures, awareness and results"

Marketers are constantly tracking various indicators and considering actions to optimize advertising communications that will lead to business results. However, the reality is that not many companies are able to clearly explain how each indicator is linked to business results such as purchases.

"Increased favorability leads to increased sales"... Is this hypothesis actually correct?

At this event, we invited Takeshi Baba, General Manager of the Brand Communications Division at KDDI, who is verifying these hypotheses using MMM and working on data-driven optimization, to talk about the data-driven marketing communications optimization methods that KDDI is working on.

KDDI (UQ mobile) communication strategy

The communications service market, including mobile phones and smartphones, is described as a "commodity market," meaning that it is difficult to differentiate in terms of functionality and is prone to falling into price competition. In this situation, differentiation through communication is important. In this regard, KDDI is working to optimize the creative aspects that are at the heart of communication and the media through which they are transmitted.

Another characteristic of the market today is that consumer awareness of specific carriers, such as "If you're going to buy a smartphone, au is the best," is fading, and the number of people who are not interested in carriers is increasing. Furthermore, the media they come into contact with and the areas of interest differ depending on age group. In the past, airing a TV commercial would instantly increase public awareness, but that is no longer the case. There is a demand to develop communication strategies that are more tailored to different age groups and targets.

So what is KDDI's communication policy? Baba says, "The important thing is to create the right atmosphere. We value what our customers want to hear, not what we want to say."

Mr. Baba:"I believe our role is to create advertisements that make customers feel like 'au is interesting' or 'UQ mobile looks fun.' This doesn't just leave an impression; it also leads to concrete results. Important indicators of business growth include the number of smartphone contracts and usage volume, and these indicators have a strong correlation with favorable impressions of the brand."

To achieve the above, UQ Mobile designs targets and measures based on the consumer journey (attitude and behavioral state). Because UQ Mobile has an image of being in the more affordable range, it develops creative messages based on cluster analysis for customers who are interested in low-cost smartphones. In addition, for customers who have reached the consideration stage, it develops different communications for each phase based on data. And XICA supports the data-driven nature of these communication strategies and measures by verifying advertising effectiveness, suggesting actions, and planning advertising budgets.

The Communication Design Department led by Mr. Baba is largely divided into the roles of strategy planning and policy implementation, and in April 2023, a data consulting group was newly established within the strategy planning organization. This is a specialized organization that leads the use of data within the department, from research before strategy formulation to analysis after policy implementation. This group is at the center of promoting the project with XICA.

Data-driven communication optimization case study at KDDI

Hirao cites two features that characterize UQ mobile's efforts: "an analytical model that pursues realism" and "a speedy analytical cycle."

First, what is meant by an analytical model that pursues reality? UQ Mobile's model shows the process leading up to a new contract across both online and offline channels. Specifically, it is a comprehensive process that starts with awareness-raising measures such as TV commercials and web video ads, and includes reactions to those and store visits. Awareness-raising measures include the use of influencers, PR, campaigns, and the like, and competitor movements and trends are also incorporated to reinforce the context of the company's sales explanations. (See the diagram below) 

This alone is a fairly complicated model, but what makes this model unique is that it incorporates consumer awareness indicators. The model reflects the natural flow of consumer behavior, starting with increased awareness, reactions to awareness measures, the formation of favorable attitudes toward the brand, and even an increase in spontaneous information-seeking behavior.

Hirao:"Clarifying the structure from measures to results was also an aim of conventional MMM, but KDDI's analysis model specifically incorporates the process of 'changes in awareness.' In other words, rather than implementing measures directly leading to sales, the model is a more realistic representation of the process in which consumer awareness first changes, which then increases the level of consideration, and ultimately leads to sales."

Another major feature of KDDI is that while this model pursues a deep realism regarding the actual effects of marketing activities, it is also able to be operated on a monthly basis.

As an example of impressive analysis results using this analysis model, a case from 2022 was introduced. At the time, even though the number of store visits was on a downward trend, the number of contracts, especially through MNP (Mobile Number Portability, a system that allows customers to switch to another carrier's communication service without changing their mobile phone number), was increasing, and CVR was improving compared to the same month of the previous year.

MMM (Marketing Mix Modeling) Solution "MAGELLAN"Analysis by the company revealed that favorability towards the brand is a major factor behind this phenomenon. Analysis of the correlation between CVR and each awareness index revealed a strong correlation between CVR and favorability. Digging deeper, it was found that the contribution value (increase in the number of contracts due to increased favorability) increased in tandem with the rise in favorability during the spring sales season, and that it continues to have a large influence thereafter.

Next, the effect of the measures on improving favorability was clarified (clarification of the impact of measures on awareness indexes). As a result, it was found that the measures contributed to the increase in favorability. In particular, it was found that video ads made a large contribution and were also efficient. Although this result was based only on an analysis of the short-term effects of the measures, it was also suggested that the continuous placement of TV commercials and video ads up to that point had contributed to forming a base for favorability. This is a noteworthy case in which the data clearly showed the structure of "measures-awareness index-results" from the measures to the increase in favorability and ultimately the increase in the number of contracts.

In this way, while visualizing the effects of each measure, KDDI is continually optimizing its budget allocation on a monthly basis. In the past, once a campaign was run, there was no review until it was over, and the same measures were often continued. However, since starting this analysis, it has become possible to improve the use of media and creatives based on the results even during the campaign period. As a result, compared to before optimization, they have succeeded in improving the efficiency of new contracts by 18%. This shows that optimizing budget allocation based on detailed data analysis leads to actual improvements in business efficiency.

Learning from KDDI: Specific efforts to achieve results

As in the case of UQ Mobile, what specific steps should be taken to translate the results of research and analysis into results? In traditional organizations, the strategy department would set the policy and other departments would then carry out the process, but this made it difficult to run an effective team, says Baba.

To address this issue, UQ Mobile shifted to a project structure that aimed to optimize advertising operations across the group while understanding each other's organizations. This allowed members of data consulting, media planning, web planning, and creative planning to participate from the strategy planning stage, and measures could be developed based on a common understanding.

Currently, the analysis results are managed on a dashboard, and the analysis and implementation staff check the effects together, discussing the next implementation plan, and implementing the PDCA cycle. In addition, they are working to centralize the data that was previously distributed among departments, and have also started using AI technology as part of optimizing creative work. They are challenging themselves with developing a generative AI model that is data-driven and can guarantee the brand concept.

Mr. Baba:"There is a limit to what can be achieved by simply analyzing past data, so it is essential to continually take on new challenges. In fact, perhaps there is a paradoxical effect in that more accurate data analysis can lead to more creative ideas being generated."

Hirao also said, "Having an environment where we can reflect on things based on data enables us to take on more proactive challenges. Having an environment where we can analyze and go back even if we fail encourages us to take on new challenges."

Summary of points to keep in mind to keep winning

Finally, Hirao reiterated three suggestions he gained from today's discussion.

1. The key to success in a crowded market is data-driven and speedy communication optimization
2. To turn the results of your research and analysis into results, you must first take action.
3. Data-driven optimization of not only "quantity" but also "quality"

Hirao:"It is important not only to look at the numerical results of business outcomes, but also to clarify the impact on consumers. In other words, we are entering an era in which analysis goes beyond mere quantitative analysis to include qualitative impacts, aiming for a deeper understanding that encompasses not only the achievement of business KPIs, but also consumer insights and attitude changes."

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