Strategy Check: How's Your Allocation Performing?


As marketers had to double-down on creative solutions during the pandemic, change has been happening behind the scenes. Whether it’s doing away with cookies or the recent news that Nielsen’s audience measurement tools are being applied to Twitter’s video content, data use is shifting, always. 

While more data is always good to some degree, we have to temper this by limitations inherent in each specific media. For example, we can’t yet (and may never be able) to track who’s actually watching a TV ad – yet we still can establish metrics (and benchmarks based on those metrics) to determine success for TV ads, based on what we do know. If we pulse TV advertising (while leaving all other marketing constant) and see a substantive increase in sales – we can reasonably deduce the TV advertising had some positive impact.  

So new data sources – such as Nielsen’s integration with Twitter video – are important to track. But these are simply additional aspects of an increasingly complex media delivery infrastructure. 

It is always important to keep in mind that each media has metrics and measures that make sense for that specific tactic. Digital tactics have a dizzying array of potential measures, given the ability to track (in many cases) engagement behavior at an individual level. But given that the environment is changing, we may soon see reduced access (or much more restricted/expensive access) to some of these digital metrics.

We have to see the forest through the trees and understand the broader “global” marketing metrics that encompass all tactics. While the specific definitions may vary slightly application to application, things like total cost, impressions and leads can reliably be tracked for any tactic. These form the baseline of cost/impression and cost/lead that ultimately drive marketing efficiency for each tactic.

The beauty of these global metrics – they are “tactic agnostic.” That is, they work for traditional media as well as digital. While digital provides a whole new perspective on engagement, the global metrics – like cost/impression – remain. Ultimately, the marketer is trying to lower cost/impression and cost/lead as marketing efficiency is improved.

As we trend marketing efficiency stats over time, we can see how they react to various tactics, how they change seasonally, and ultimately the ideal or optimal balance across tactics. As we shift focus on more efficient tactics (for example, to display from spot TV ads), we can track total leads and total cost/lead and see how changes in various tactical “levers” yields greater overall efficiency.

Consider a simple example:

Currently, we have investments in certain media that yield a particular number of leads. Certain media tactics will be more efficient – in other words, have a lower spend per lead generated. By simply shifting how we are investing (the “Revised” section), we gain incremental leads while not increasing investment. We are marketing smarter, not harder.

Rather than looking at a tactic’s performance only against itself (“how did spot TV perform this month vs. last year?”), we start to ask more strategically, “given all the ways we can invest in marketing, what is the best mix of those tactics?”  

We recently recommended that a client optimize their mix. By making a few changes in marketing investment allocation, a 20% reduction in spend yielded 15% increase in response and a 30% reduction in cost/response – just by “moving the levers” and changing the tactical mix. Something to consider as we head into the second half of the year: is your allocation meeting its full potential?

Category: strategy, Marketing, media measurement, cross channel marketing, omnichannel

Patrick Burgess

Patrick Burgess

A Media and Communications industry veteran, Patrick Burgess leads the service delivery process for many of Pluris’ key clients, ensuring day-to-day success of their marketing strategies and programs. Patrick’s collaboration with the marketing teams of several Pluris clients has enabled them to achieve 30-to-50 percent gains in the productivity of their marketing initiatives, effectively utilizing Pluris’ Marketing Enablement and Offer Optimization solutions. With more than 15 years of extensive experience in marketing analytics, marketing metrics, reporting, market research, strategy, and project management, Patrick is able to engage clients at a very detailed level to improve their marketing operations and leverage new technologies and analytical techniques.

About this blog

At Pluris, we believe that we all can do a better, more efficient job at marketing to our most important customers. On this blog, we'll discuss how strategy, database management, offer optimization and analytics can help us all be better marketers. Sometimes, we may just talk about sports.

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