When it comes to advertising, most companies rely on media agencies to provide them with the segments, reach, and impressions for each marketing vehicle. The problem with this approach is that these agencies typically provide standard metrics to support their recommendations, but no analytics.
As a result, companies are left to rely upon gut-based decision-making and conventional wisdom on local advertising and sports sponsorships – without any conclusive measurement of those marketing efforts.
However, by leveraging predictive analytics and statistical models, many companies could easily arm themselves with innovative insights on their marketing mix that will drive improved returns on their advertising spend.
The power of this type of analysis is that it can, among other things:
- Isolate brand awareness marketing campaigns from other promotional and pricing actions, and determine channel effectiveness;
- Examine every advertising spot from across the nation – or globe – and focus in on marketing spend, location, vehicle, time of day, spot length, frequency and messaging type;
- Identify key drivers for future campaign success and return on investment.
This approach was an eye-opener for one international firm with more than 11,000 stores globally. The company desired a new strategy for the upcoming year that would provide the best distribution of marketing dollars across available marketing vehicles.
The resulting strategy challenged the conventional wisdom of the past and shifted from a local sports orientation to a national campaign. The company saw immediate benefits from cost savings by focusing attention on the most effective marketing vehicles as well as an increase in retail sales.
Through implementation of this optimized marketing mix and leveraging predictive analytics, the company improved return on their marketing spend – and transformed its future marketing strategies. The end result: 7 percent organic revenue growth.