The Marketing Mix

By: EconomyWatch   Date: 30 June 2010

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“Real integrated media planning is years off. Most media are planned in separate silos.” Mark Patron.

Once campaigns have been defined, we need to use media and marketing channels to reach our prospects. The media & marketing mix should be driven by analytical approach to determine what is believed to be the lowest cost of reaching a prospect – or of closing a sale.

Categories: Above the Line, Below the Line, Thru the Line and Online

Media Types: Print, TV, Radio, Cinema, Out of Home, Internet, Mobile, Database

Metrics Covered (in Marketing KPIs and Metrics, or in the Internet Marketing Guide, all links below): Impressions, Gross Rating Points (GRPs), Cost Per Thousand Impressions (CPM), Reach/ Net Reach, Frequency, Share of Voice, Pageviews

Marketing Mix Modelers

A comprehensive model covering multiple years of marketing data, used to improve overall marketing budget allocations and gain strategic advantage

Ideally you will have 3 years of data in weekly series, with full 4P3C1E data as inputs (or independent variables) and success metrics as outputs (or dependent variables)

You can still run the model if you have at least one years data with monthly values and missing data elements, but the results will be much less accurate

Models are built using statistical techniques, usually based on least squared regression analysis. Other techniques, such as agent-based modelling, can be used as necessary

The 4Ps

Price - Inc. promotional price impacts (such as BOGO)

Product – Inc. new products, feature changes, cust. service

Place – Details of location or channel of sale

Promotion – campaigns & media categories/costs/activities

The 3Cs

Competition – The 4Ps of your competitors

Customers – Track segment attributes and sizes

Channel – Overall composition, size and growth of channels

1E

Exogenous Factors – External influences such as holidays, regulation changes, SARS, Financial Crisis etc

Success Metrics

Financial Success Metrics

Revenue

Unit Volume

Contribution Margin

Survey-Based Purchase Cycle Metrics

Purchase Intent

Brand Awareness

Brand Equity

Customer Satisfaction/ Net Promoter Score

Directly Measured Interim Metrics

Leads & lead quality

Traffic & engagement levels on website

Trade show attendees/ call center enquiries/ foot traffic

Derived Metrics

Market share

Share of wallet

Customer Lifetime Value and/ or Loyalty

Building the Marketing Mix Model

1. Determine the business questions to be answered by the model

2. Determine the associated success metrics required to answer each of the business questions

3. Collect media and campaign cost and insertion/ activity data

4. Determine external data needed, such as competition, holidays, demographic & economic data

5. Clean, normalize and transform data into single model. Take into account adstocks and sellouts where
    necessary

6. Build a model for each of the success metrics, and validate using triangulation of various statistical
    methods

7. Calculate ROMI coefficients

8. Simulate potential marketing plans & determine potential revenue, profit and market share uplifts

Sales & Marketing

Marketing for Dummies Guides

Measuring, Marketing, Metrics & KPIs

Online Marketing/ Digital Marketing


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