What is the most cost-effective advertising for results? Analyzing various marketing strategies with MMM
table of contents
1. Corporate marketing strategies have become more complex
With various marketing strategies being implemented, do you know which one is the most cost-effective in terms of results?
Users come into contact with various marketing strategies before reaching the results that a company has set. In the past, the main points of contact between users and marketing strategies were the so-called four mass media - television commercials, magazines, newspapers, and radio - but recently, there has been an increase in points of contact with internet-based strategies such as online advertising and social media.
In today's world, where the number of media and channels is increasing, it is necessary to implement multiple marketing measures simultaneously in order to maximize results. In doing so, it is important to quantify the effects of each measure, including not only the direct effect but also the indirect effect and the impact of external factors such as season, weather, and competing measures, and to optimize investment in each marketing measure based on the results. An analytical method that makes this possible is called MMM (Marketing Mix Modeling). (For more information on MMM, seeThis articleIt is explained in detail in
2. How to visualize the contribution value of each marketing measure
Unlike online advertising, offline advertising such as TV commercials and transportation advertising is a measure that is difficult to visualize the effect on results (hereinafter, "contribution value"). MAGELLANis a recommended service for those who have challenges in visualizing the effectiveness of such TV commercials and for those who are considering adopting MMM as mentioned above.
This time, we will introduce an example of using MAGELLAN to visualize the contribution value, which shows how much each marketing initiative actually contributed to results.
In order to calculate the contribution value to the results of marketing initiatives, it is necessary to "organize the interrelationships between each marketing initiative" and "register numerical values."
(1) Clarification of the interrelationships between each marketing measure
Identify external factors that may affect each marketing measure and its results, and assign the actions that users take to reach the results to each stage. The assignment is not definitive, but can be based on hypotheses. We call this relationship diagram a "bird's-eye view," and we will explain it in detail in another article.
(2) Registering numerical values
As for the figures, in addition to costs, measurement data such as GRP for TV commercials, impressions (number of views) and clicks for online ads, and number of views for video ads are registered on a daily or weekly basis. As performance figures, figures placed in performance indicators, such as actual purchase data such as POS data, number of visitors, number of web applications, etc. are registered. In addition, by registering information on seasons, weather, and competitors to the extent possible, the influence of external factors can also be taken into account.
Based on the relationship between policies in a bird's-eye view and the registered values, correlations between policies and between policies and results can be calculated. MAGELLAN By analyzing the results, the contribution value of each measure to the results is calculated. The calculated results are shown in the image below.
▼Ranking of contribution value to the results of each measure
*Variables: Each marketing measure
Contribution value: quantified analysis results
Cost: Registered amount
3. Summary
This contribution value is an indicator that shows how much each marketing strategy element contributed to the results, including not only the direct effect but also the indirect effect. MAGELLAN uses the same indicator, the contribution value, for evaluation, so you can compare and analyze offline and online strategies with the same indicator. By allocating the optimal budget based on this contribution value, you can aim to maximize your results.
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<Schematic of contribution value calculation>
<Terminology>
・Contribution value
The contribution of specific pathways and measures to outcomes
There are two types of contribution values: "route contribution value" and "starting point contribution value"
・Route contribution value
The statistically estimated number of results each initiative produced through that route. Estimated results for each route
・Starting point contribution value
The total number of outcomes for each STEP1 (stimulus) measure. The degree of contribution of each STEP1 (stimulus) variable to the outcome
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