TUI CMO: Effectiveness of media channels should be judged by ‘intuition’ not just modelling

As a travel company, TUI “sells dreams” and so needs to look beyond channels where return on investment can be granularly measured, says UK and Ireland CMO Katie McAlister.

TUI MW AwardsMarketing leaders should invest in media channels based on a judgement of their “quality”, not just expected return on investment gauged by marketing mix modelling, says TUI UK and Ireland CMO Katie McAlister.

Speaking on a panel hosted by Meta on balancing long and short term investment,  McAlister said experience helps CMOs understand “intuitively” the channels which will deliver for the long-term and short-term health of their brand, something which is often not accounted for in marketing mix modelling.

While the impact of some media, in particular digital channels, can be measured with some precision, this does not mean it is the most valuable to the brand.

As a travel company, TUI does not just market products but “sell dreams”, she claimed, stating people need to see and be inspired by the holiday brand through visual channels, rather than those which can be measured to the nth degree.

“If I put that choice into my advertising mix without any kind of weighting towards a particular channel in terms of the quality of it, it’s just going to tell me to spend the money where I can measure it really effectively,” she said.

McAlister said marketers need to work out a way to integrate their own judgement on the quality of a particular channel for their brand into their marketing mix modelling. She noted TUI has started to assign a kind of “quality score” to particular media in its modelling.

Judgement is necessary to decide whether to invest in brand-building channels such as TV, even if the ROI is less attributable than performance-based channels, she added.

“Part of our objective is not just effectiveness tomorrow, it’s growing the brand in the long term,” McAlister said.

“Getting it right involves building in what people know about how this business works and how the world ticks,” said fellow panellist, econometrician and Magic Numbers founder Grace Kite.

Communicating to CFOs

Meeting  objectives requires investment, and in a tough macroeconomic environment budgets need to be fought for.

While the travel industry is now facing the same economic challenges as other sectors, McAlister noted there “hasn’t been a more turbulent time than the pandemic” for the industry.

However, the pandemic provided a “refresh” for TUI. Prior to COVID, the whole travel sector had been extremely performance-focused, McAlister said.

“We’ve got planes that need to be filled every day, cruise ships that need to be filled every day, hotel rooms that need to be filled every day, so people like our CFO who control the budget were really just focused on how we were going to do that tomorrow,” she said.

However, during the pandemic, it simply was not possible for TUI to use marketing to drive immediate sales through its marketing. McAlister notes there was no point measuring things such as consideration or purchase intent, because people were not going abroad.

However, it carried on doing brand advertising during the period and took time to improve attribution and prepare for a return to normalcy. 

“We’re in a much better place than we previously were because we’ve really been allowed to pause and think about what each element of advertising is doing without the pressure of a normal operating environment,” she said.

Boots’ CFO: Don’t just have conversations with finance when it’s budget time

While the pandemic allowed TUI to strengthen its long-term brand-building work, McAlister notes tying this to achieving business objectives is crucial in keeping internal stakeholders like the CFO on board.

Fellow panellist adam&eveDDB’s group head of effectiveness and the co-author of The Long and Short of it, Les Binet, agreed.

“I think it’s really important to frame the argument in terms of long-term sales, cash and profit,” he said. “We do ourselves a disservice when we talk about awareness and image and things like that. It’s all about hard cash.”

He added: “If you’re talking to the CFO in terms of awareness and consideration, you’ve got one hand tied behind your back.”

Dr Kite added the top concern of CFOs right now is the impact of increasing prices.

“This year, the best argument for brand building is that it supports higher prices,” she said.