With the advent of big data, media mix measurement and optimization have become a required staple in the marketer’s toolbox. Effectively, media mix measurement and optimization are comprised of seven elements:
- Setting the objective of what you are trying to achieve
- Collection of media spend data
- Collection of consumer response and order/sales data
- Normalization of media spend and consumer response/order data
- Reporting of normalized data
- Analysis of historical media mix and results
- Optimization analysis and insights
Over the next few weeks, we’ll talk about these elements in more depth, starting with setting objectives.
In the area of data science, these are common steps in conducting analyses. For media mix analysis, the first step is critical to the success of your media mix platform as it will determine if your media mix platform solely drives strategy level decisions or have a role in day-to-day tactical execution.
At what level does the organization want to manage marketing media investments?
- Designated Market Area (DMA)
- Zip Code
A solution at the DMA level is much different than a solution at the household level or anywhere in between. A company that is heavily mass media focused is more comfortable managing investments at the DMA level. They will buy TV, radio, and digital placements at the DMA level. While they may drive digital efficiencies at a lower geographic level within a DMA, they measure return on marketing investments at the DMA level – thus invest at the DMA level.
Companies that provide products and services to discrete targeted populations prefer to invest in household level targeting. These companies prefer to deploy media mix solutions at the household level. Gathering and collecting household level data to support the targeting of direct mail, digital, email, text, etc. is key to their success. Therefore, optimizing their media spend at this level is critically important to maximizing Return on Marketing Investment.
Of course, there are companies that manage across DMAs as well as household levels. For these businesses, managing media mix solutions is more complicated, as the investment of media at the DMA level impacts the performance of media placed at the household level and vise-versa. Therefore, determining how and at what levels marketing investments will be managed is critical to how your media optimization solution is deployed – without this key linkage, you will be sifting through a lot of data without context.