By Mark Fantino
Principal, Product Marketing
In recent years, marketers have become more focused on data to inform decisions, justify budgets and maximize results. Two measurement solutions have been at the forefront: marketing mix modeling and attribution.
Marketing mix modeling informs high-level strategic decisions within a marketing plan across different tactics to show the best return on investment. It answers key questions such as, “What is the right level of investment across my brands to achieve my portfolio objectives?” or “What is the optimal allocation of investment across different media touch points to maximize my brand’s performance?” Mix is a well-understood and frequently-used top-down measurement approach.
Conversely, attribution modeling takes a more bottom-up approach that’s aimed at the individual user or household and decomposes the individual marketing tactics within a particular campaign. Ideally, attribution leverages vast sets of frequent shopper program / loyalty data to connect ad views to products purchased. Results are typically available at the end of the campaign, though some solutions allow marketers to optimize campaigns and make changes in flight. While attribution solutions are newer, they have proven to be an invaluable resource for marketing teams since they can make tactical decisions while a campaign is running to maximize results.
While mix and attribution offer different benefits, marketers that want to fully understand and improve their impact should combine both measurement approaches for the best results.
Unifying mix and attribution measurement gives marketers better end-to-end insights, allowing them to operate both strategically and tactically within a single solution and, more importantly, from a single set of facts.
There are two key components of unified measurement:
1. Data Quality and Data Granularity – These are paramount in mix and attribution solutions, and their importance increases with a unified approach. Modeling techniques will always be used both solutions but the speed, accuracy and granularity of insight the models produce are based on the data available.
With marketing mix modeling, RMA level is preferred to market level, and store level is preferred to RMA level. While models can leverage aggregate data just fine for national-level programs, aggregate data creates a smoothing effect that may also be diluting real effects driven at the micro-market level (e.g., store promotion, geo-targeted media). Store-level granularity eliminates any smoothing of data and can better disentangle and attribute marketing effects to produce more accurate and actionable results.
With attribution, considering approximately 95 percent of CPG purchases still come from in-store sales, maximizing the number of households you leverage to perform your measurement is directly correlated to the speed and granularity by which you start receiving campaign insights. For example, when marketers execute campaigns, they would rather know if the impression levels they’ve allocated for a particular creative at a specific publisher is having the desired outcome in the first weeks of the campaign. They also would like to know how to best rebalance impression levels while the campaign is running versus waiting until the end of the campaign when no action can be taken.
2. Single Source of Truth – Unified approaches can be developed using disparate solutions, but it’s better to use a solution that inherently combines mix modeling with attribution, as long as data granularity isn’t being sacrificed. A unified solution can accelerate the required behaviors to make unified measurement a more predictable, repeatable and sustainable process within an enterprise.
More and more, marketing organizations are being asked to own a larger portion of the corporate growth agenda as well as operate in an increasing number of marketing channels. Those requirements, combined with the continually evolving consumer path to purchase, bring new challenges that marketers must overcome. Unified measurement is an approach that promises to help marketing teams take a more holistic view of their strategies and campaigns to deliver outsized growth compared with their competitors.
To learn how you can use unified measurement to make your marketing campaigns more effective, contact me at Mark.Fantino@IRIworldwide.com.
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