MarketPulse: which half of the marketing budget is working?
Soundience has developed and applied effective methods of measuring marketing spend effectiveness, which has helped our clients identify which marketing activities are and are not working. They require very little data, and can be accessed over the web.
We have used these approaches to help companies in a number of consumer-facing sectors, such as financial services and packaged goods, to create more effective marketing budgets, saving significant money and increasing sales.
Two Different Approaches
To determine marketing ROI, we use two main approaches: multiple regression (for quick diagnostic analyses) and our proprietary tool, MarketPulse, for more detailed analysis. In both of these approaches, we try to separate the signal from the noise, and determine the contribution to sales of different marketing activities.
MarketPulse helps us to optimise the marketing mix: by measuring the actual impact of different elements such as pricing, advertising, distribution, and promotion. Using these insights, you can better allocate your marketing budget, resulting in better results for less spend. The approach is also useful for planning and measure less conventional marketing approaches, such as viral marketing or loyalty campaigns.
We have used MarketPulse in retail banking, the computer industry, beverages, and food. For example, it was used with a major UK bank to help understand the drivers of marketing effectiveness behind their credit card products. Over 900 marketing drivers were quickly analysed, to distill the 13 that accounted for almost all the impact. Marketing budgets were subsequently aligned to focus on these, saving significant expenditure and better channeling the marketing team's focus.
Benefits of MarketPulse
The chief benefit is that MarketPulse can help you reduce marketing expenditure, by identifying marketing activities that have been less effective so you can reduce or eliminate them.
Other benefits are as follows:
- Requires relatively little data compared with other approaches
- Fast--analysis is partly automated, and can be done in a matter of days or even hours
- Collaborative--runs over the web, and has built in ability to add comments, allowing your team to learn and leverage its expertise
- Shows you the time profile, not just the magnitude, of impact; this insight is useful for creating a plan that is more closely tailored to your marketing objectives
- Visual and graphical, making it easier to understand and more engaging than purely numeric approaches
- Has cumulative benefit: over time, you build a portfolio of response profiles, which can be combined to create richer and more effective plans
- Cross channel--can be applied in an integrated way to a wide variety of channels, covering all the 4 P's and more
How it Works
MarketPulse applies pattern recognition techniques used in physics and engineering to infer marketing response curves that express the impact of specific marketing actions in the past (such as advertising spend, distribution changes, or price changes).
The process works as follows:
- Your sales data (for example, units sold or monetary value) for a weekly or monthly period over the past are fed into MarketPulse
- Time series for the same period, for any number of marketing activities, are also fed into MarketPulse, using any units available (such as spend, share of voice, or TVRs)
- Through a combination of automatic optimization (genetic algorithms) and human guidance/intervention, MarketPulse is used to deduce the underlying response curves of the various marketing actions in order to create a statistically satisfactory set of profiles
- Gaps between the predicted and actual results are analysed to determine additional factors that need to be considered (such as competitor actions or seasonal effects), resulting in a more robust model
- The resulting model is used to plan future marketing plans
- Over time, the process can be repeated to yield a richer set of profiles and more accurate and effective plans
Our proprietary, web-enabled software can perform these operations in real time. It can incorporate multiple data feeds (for example, your databases or spreadsheets), and allow you to view results at your own pace or requirements.
If this sounds interesting and you work in a consumer-facing business, please call to arrange a demonstration.