Most of the businesses pour in a lot of money into
advertising their product or firm, which does have positive returns if planned
well. An important problem which media planners
face with is media allocation
including budget allocation for an advertising campaign in an optimal frame.
And therefore marketers are increasingly cautious about the money spent on
advertising and demand more accountability from their communication partners
about their marketing spending, making it imperative for media planners to
invest their marketing money in the best possible manner to maximize returns in
terms of incremental sales, seeking to justify their marketing spending.
Many firms choose a wise blend of
offline and online media to reach their prospects; but it has become quite
difficult to know which channel it credit to as a result of the cross-over of
the different channels. Consumers can be engaged with multiple channels at the
same time. A direct contact can lead the customer to a website, then to a
social media site to read other customers’ reviews. Firms want to invest more
in media that works and cut media that is not working. But this means more than
comparing the results of one channel to another. It requires insight into how
the various channels cross over, interact and mix with each other and how
consumers influence each other.
Media Mix Optimization (MMO) helps marketers sort out the confusion and put the money where they can expect rich returns. In simpler words, MMO is a comprehensive and dynamic strategic capability that can assist marketers to quantitatively measure, plan, organize and optimize the media resources and investments. Many companies are turning to the media mix optimization, delivering high performance audience and media management. Designing to optimize the performance of media mix investments, this technique takes the guesswork out of planning — helping marketers to better orchestrate and execute their marketing strategy.
Media Mix Optimization can be achieved by carrying out a Marketing Mix
Model. “Marketing Mix Modelling” is a subset of the overall “Media Optimization”
problem, which is encompassed by the over-arching question, “If I am a
marketing manager and I have Rs.1,00,000/- to spend – where and how should I
spend it?” This model helps at larger scope to solve the various questions of
marketers regarding the investment. For designing this model, an analysis is
required on the historical data of a firm. Media spending and sales information
are required for media mix analysis. Data on advertising effectiveness, pricing,
sponsorships, events, and competition can be incorporated in the analysis and
models if they are available. Retail, Communications, Entertainment,
Pharmaceuticals, etc. are the industries that suit best for this type of
approach, since they have got vast amount of historical data available.
Media mix optimization seeks to develop a causal relationship between
consumers, segments to response, and to drill down into which media mix
actually drives consumer behavior for firms’ high value audience. It reduces
the guess work through better attribution; quantifying media mix decisions
through causal channel contributions to sales. The solution is designed to
eliminate misleading performance measures and align the marketing organization
through common goals. It is only as helpful as the validity of
their predictions. Consider the need for a system of self checking the accuracy
of your optimization model and its’ recommendations by testing and measuring
initial results against objectives. Incremental adjustments will increase
visibility, accuracy and ROI.
Image courtesy: 'suite101'
Copyright: Modak Analytics
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