The Role of Media Mix Modeling and Measurement in Integrated Marketing.
At the end of the year Ogilvy is coming out with a new book on the role of Mass Advertising in this new world of Digital Media, Omni-channel and quantitative marketing in which we now live. Forrester research speculated about a more balanced approach to marketing measurement at its recent conference. Forrester proclaimed that gone are the days of the unmeasured Mad men approach to advertising with its large spending on ad buys that largely only drove soft metrics such as Brand Impressions and Customer Consideration. The new balanced approach to ad measurement includes a more Mathematical approach where programs have hard metrics many of which are financial (Sales, ROI, Quality Customer relationships) is here to stay. The hypothesis that Forrester put forward in their talk was that marketing has almost gone too far to Quantitative Marketing and they suggested the best blend is where Marketing Research as well as quantitative and behavioral data both have a role in measuring integrated campaigns. So what does that mean for Mass Advertising you ask?
Firstly, and the ad agencies can breathe a sigh of relief, Mass Marketing is not dead but is subject to many new standards namely:
Mass will be a smaller part of the Omni-Channel Mix of activities that CMOâs can allocate their spending toward but that allocation should be guided by concrete measures and for very large buckets of spend, Media Mix or Marketing Mix Modeling can help with decision making. The last statistic that we saw from Forrester was that Digital Media spend was about to or already surpassed mass media ad spend. So CMOâs should not be surprised to see that SEM, Google AdWords, Digital/Social and Direct Marketing are a significant 50% or more of the overall investment.
CFOâs are asking CMOâs for the returns on programmatic and digital media buys. How much money does each media buy make and how do you know itâs working? Gone are the days of âalways onâ mass advertising that could get away with reporting back only GRPâs or brand health measures. The faster the CMOâs are on board with this shift the better they can ensure a dynamic process for marketing investments.
The willingness to turn off and match market test mass media to ensure that it is still working. Many firms need to assess whether TV, and Print works for their brand, or campaign in light of their current target markets. Many ad agencies and marketing service providers have advanced audience selection and matching tools to help with this problem. (Nielsen, Acxiom and many more) These tools typically integrate audience profiling as well as privacy protected behavior information.
The Need to run more integrated campaigns with standard offers across channels and a smarter way of connecting the call to action and the drivers to Omni-channel within each media. For example, mention that consumers can download the firmâs app in the app store in other online advertising. The Integration of channels within a campaign will require more complex measurement attribution rules as well as additional test marketing and test and learn principles.
In this post we briefly explore two of these changes namely media mix modeling and advertising measurement options. If you want more specifics, please feel free to contact us if we can be helpful at CustomerIntelligence.net.
Firstly, letâs discuss that there is always a way to measure mass advertising and that it is not true that you need to leave it turned on for all eternity to do so for example: If you want to understand does my Media buy in NYC or a matched Market like LA (Large Markets) bring in the level of sales and inquiry to other channels that I need at a certain threshold, we posit that you can always:
Conduct a simple pre and post ad campaign lift analysis to determine the level of sales and other performance metrics prior to, during and after the ad campaign has run.
Secondly, you can hold out a group of matched markets to serve as control for performance comparison against the market you are running the ad in.
Shut off the media in a market for a very brief period of time. This can allow you to compare âdarkâ period performance with the âonâ program period with Seasonality adjustments to derive some intelligence about performance and perhaps create a performance factor or base line from which to measure going forward. Such a factor can be leveraged for future measurement without shutting off programs. This is what we call dues paying in marketing analytics. You may have to sacrifice a small amount of sales to read the results each year. This is one way to ensure measurement of mass advertising.
Finally, you can study any behavioral changes in cross sell and upsell rates of current customers who may increase their relationship because of the campaign you are running.
Another point to make is that Enterprise Marketing Automation can help with the tracking and measuring of ad campaigns. For really large Integrated Marketing Budgets we recommend, Media Mix Modeling or Marketing Mix Modeling. There are a number of firms(Market Share Partners Inc is one firm.) that provide these models and we can discuss that in future posts. The Basic Mechanics of Marketing Mix Modeling(MMM) is as follows:
MMM uses econometrics to help understand the relationship between Sales and the various marketing tactics that drive Sales
Combines a variety of marketing tactics (channels, campaigns, etc.) with large data sets of historical performance data
Regression Modeling and Statistical analysis is often performed on available data to estimate the impact of various promotional tactics on sales in order to forecast the future sets of promotional tactics
This analysis allows you to predict sales based on mathematical correlations to historical marketing drivers & market conditions
Ultimately, the model uses predictive analytics to optimize future marketing investments to drive increases in sales, profits & share
Allows you to understand ROI for each media channel, campaign and execution strategy
Which media vehicles/campaigns are most effective at driving revenue/profit and share
Shows you what your incremental sales would be at different levels of media spend
Optimal Spending Mix by Channel to generate the most sales
The model establishes a link between individual drivers and Sales
Allows you to identify a sales response curve to advertising
So the good news is â¦ Mass Advertising is far from dead! Its effectiveness will be looked at in the broader context of integrated campaigns with an eye toward contributing hard returns such as more customers and quality relationships. In addition, Mass advertising will be looked at in the context of how it integrates with digital, for example when the firm runs the TV ad do searches for the firmâs products and brand increase and then do those searches convert to sales. The Funnel in the new Omni-channel world is still being established.
In Summary, overall Mass advertising must be understood at the segment, customer and brand level as we believe it has a role in the overall marketing mix when targeted and used in the most efficient way. A more thoughtful view of marketing efficiency is now emerging and includes such aspects as matching the TV ad in the right channel to the right audience, understanding metrics and measures as well as integration points in how mass can complement digital channels as part of an integrated Omni-Channel Strategy. Viewing Advertising as a Separate discipline from Digital Marketing is on its way to disappearing and marketers must be well versed in both online and offline as the lines will continue to blur, change and optimize. Flexibility is key. The Organizations inside companies will continue to merge to reflect this integration and to avoid siloed thinking and sub-par results.
We look forward to dialoguing and getting your thoughts and experience on these topics and understanding counterpoints and other points of view to ours.
Thanks Tony Branda