Marketing Decisions Should Not Be Made with a Magic 8 Ball
As digital marketers, we have seen a lot of changes in the past 20 plus years. The advent of paid search, social, retargeting, and mobile has expanded and complicated our marketing mixes. By leveraging analytics and attribution solutions, many of us now have a clearer picture of the consumer journey and how all of our marketing efforts work together to drive revenues. All of this data and analysis is designed to give us confidence that we are maximizing our marketing dollars.
Media Planning Today Lacks Certainty
When it comes to evolving our marketing mix or budgets, a lot of it is a best guess or a process of testing to get the best results. I call this the “Magic 8 Ball of marketing.” We have historical data that we analyze to help us decide what we should do moving forward. Much of today’s media planning decisions could just as easily be decided by a Magic 8 Ball – “signs point to yes” or “don’t count on it.” The one thing media planning lacks today is certainty.
When doing media planning we typically look at each channel, the spend, and the return to determine how well we did. What we aren’t doing is understanding the contributions or influences of other channels on the channel we are optimizing. Even if we have an attribution solution, we aren’t usually able to make sense of this data to leverage it for media planning.
For example, if we spent $100 in paid search and $100 in display, we aren’t able to understand how the total $200 drove a 5% higher ROAS than if we had spent all $200 in just search or just display. Until we can understand this we can’t do effective media planning.
Emerging Technology Offers Tools for Better Marketing Decisions
Thankfully we are on the cusp of another emerging technology that can do most of the hard work of media planning for us with far greater certainty. Machine learning, AI, and statistical algorithms are now able to make sense of vast amounts of cross-channel customer touch points to determine how all of our marketing is working together. So when we want to change our marketing mix or budget, we can make the best decisions based on all of our marketing data.
Imagine if your CMO cut your Q3 marketing budget in half. How would you maximize revenues with just half the spend? Media planning tools can easily output the best marketing mix based on the reduced budget. Equally challenging is your CMO asking you; “what could you do if we doubled your marketing budget?” I don’t think any of us want to promise double the revenues but if we had a tool that could give us a few scenarios to evaluate, everyone would feel better about moving forward with a larger budget.
The key is to shift our focus from marketing activities that drive conversions to marketing activities that contribute to conversions. By understanding which media contributes or influences conversions, we can better understand how all of marketing works together to drive results. Most marketers do not have an understanding of how introducers and influencers contribute to conversions and are therefore undervaluing them compared to a traditional “last click” perspective.
An example that I recently heard was an advertiser eliminating specific non-branded keywords they were buying because they saw zero sales from them on a last click basis. The surprising effect was their revenues dropped 35%! Those keywords were introducers and without those contributions the influencers and closers (a.k.a. sales) never happened.
Media planning tools that are built into an attribution solution can take all of the contributing touch points across your marketing channels and use a holistic viewpoint to firstly provide an accurate model of all of your marketing spend and secondly, provide models for shifting media mixes or budgets.
The most sophisticated solutions will leverage multiple data points like revenues, spend, conversions, traffic, impressions, AOV, ROAS, product SKUs, and margin to generate media plans. And once you implement the media plan, they can also track your progress to goal.
So let’s put down our Magic 8 Ball and pick up a media planning solution. But don’t worry you can still use your Magic 8 Ball for other important decisions like where to go for lunch or if you should ask for a raise.
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