Over the past few years, we’ve seen forward-thinking brands integrate econometrics and attribution into their strategy. Yet too often marketers still speak about efficiency, not effectiveness, and rely on basic attribution methods or short-term return on investment to measure the impact of their marketing; rather than more holistic methods of measuring how marketing creates profitable growth, such as econometrics.
However, with increasing amounts of data at their disposal, more marketers are starting to measure what matters, not just what is easy, and retool their investments around both short- and long-term metrics.
There is also growing pressure from the boardroom to prove that marketing investment leads to business outcomes. That will only increase as economic uncertainty in the UK continues, weak consumer confidence hits spending and businesses watch costs.
Futureproof your marketing with econometrics
Today’s media and competitive landscape requires consistent and accurate insights into campaign performance across all channels. If you have a sizeable marketing budget it's very likely that you will be using a lot of channels (e.g. TV, PPC, and affiliates) a lot of the time. Add to that key sale drivers such as price and promotions, other activities that you may not have control or visibility over, and competitor and wider market impacts, and it can feel impossible to really understand what's driving topline sales.
Jaywing’s approach to econometrics uses sophisticated techniques and experienced modellers to identify the impact of different marketing and media activities on consumer behaviour, to recognise the real incremental contribution of each activity to sales, in isolation and in combination with other drivers. Once developed, the econometric model can help identify areas for opportunity, and of diminishing returns, to provide the basis for future-facing planning, budget optimisation and forecasting.
With a detailed understanding of the key drivers of business performance, you can start to understand the answers to key questions such as ‘To what extent does TV advertising drive online search?’, and ‘Is there a synergistic effect when synchronising TV with in-store promotions?’.
Unlike many econometric models we don’t just measure and understand the impact of variables on sales in the short term (following few months). Our model measures the underlying growth of the business and can link that growth back to driving variables.
In contrast to many models that have static ‘base sales’, our model includes an ‘evolving baseline’. This enables our model to measure the longer-term impact of key variables (including marketing) on sales. We can describe the relationship between brand marketing base sales, which is a measure of brand health.
Say goodbye to guesswork with data-driven attribution
Jaywing’s approach to data-driven attribution offers an unprecedented level of visibility into the customer journey, by tracking individual customer journeys across online and offline channels. It considers the impact of all possible inputs on behaviour across each individual customers’ entire customer journey, and allows you to understand which campaigns, channels, and activities are working at which touchpoints, from initial awareness to desired actions, purchase and advocacy. It enables brands to understand which messages across which channels best influence different customer segments or sales of different product groups.
This will show you which combination of inputs are driving which responses to determine their relative value, providing you with the intelligence to guide marketing investment decisions. Knowing which activities, inputs, and channels trigger behaviour most effectively on customer journeys enables you to make more of the right media choices and eliminate those that don’t deliver for you.
Econometrics, attribution, or a combination of the two?
Econometrics is capable of measuring online, offline and direct media and assesses all media alongside each other, taking account of external factors and other marketing mix elements such as pricing and competitor activity. Its real strength is that it covers the non-direct and non-digital activity such as TV and Radio. However econometrics on its own often leaves marketing teams lacking granular insight for detailed media planning, such as keyword bids and their role in the customer journey. In these cases, we really need to track the detail of the marketing that each individual sees and how they respond to it – across all media – and be able to do this quickly.
That’s why we offer a combination of econometrics with data-driven attribution modelling, by tracking all the channel touchpoints at an individual-level you will be able to measure the full effect of a brand’s marketing investments.
This powerful combination provides the most accurate means of measuring marketing effectiveness. By combining econometrics to data-driven attribution, we can reveal nothing but the truth across non-digital and non-direct activity, like TV and Radio, and individual customer journeys to produce powerful all media, all touchpoint and all sale measurement.
The key benefit of combining both approaches is to use the mathematical expertise from each model to feed the other. For example, the econometrics model will have a better understanding of ATL (e.g. TV) advertising. This can be fed into the attribution results, and the attribution baseline can be appropriately split to reflect ATL.
The attribution model more accurately understands the effect of PPC or CRM campaigns. These results can then be fed into the econometric model to improve its calibration. What’s more, learnings from the econometric model can also be used to enhance the attribution model. For example, by feeding in macro-level price metrics: conversion probabilities will increase in departments where pricing/ promotion is competitive.
Investing in the right media
The results delivered by Jaywing’s marketing effectiveness solutions allow our clients to make instant savings when you can see how individual channels perform for any given customer. For example, we’ve shown clients where PPC is wasted on customers who are already known and who we can contact using their email address – a much cheaper media. As a result, more timely emails will reduce the PPC bill. We’ve also used econometric models in macro scenarios to demonstrate the impact of running a TV ad with price promotions in a certain season.
Using this approach, you can summarise the ROI and cost of sale results of all the media together into one place to make media planning and forecasting easier, quicker and more accurate. You can amplify your investments by most effectively targeting customers at the most influential part of the customer journey. And make more confident decisions and see where cost savings and increased sales can be driven.
If you’d like to understand the benefits that Jaywing could bring to your business, just get in touch.