Monday, October 18, 2010

More on the Media Mix Conversation

In 2008 and 2009, I had the pleasure of working with some brilliant colleagues doing advanced statistical work in the area of revenue-linked media mix modeling. Their analysis prepared each quarter for this direct-sales technology company revealed — to much surprise and skepticism — that certain traditional media channels delivered consistently stronger ROI than digital channels like email and online display ads, and even outperformed search at times. The data also provided an optimal frequency based on saturation curves for each media channel, your call for a “productive mix” including digital tactics.

The key to the analytic insight was the ability to model sales response data for latency, the often observed but rarely measured time lag between a media impression and a correlated revenue-generating action. To establish a link, sales traffic from all of the inbound response channels was attributed methodically to the most probable or demonstrable “last touch” in the prior quarter's media plan -- matching by time/date/item with precision minute by minute, product by product, and by price on limited time offers.

Since our work, the fundamental importance of “last touch” is today recognized even more widely now that Google has introduced the “View Through Completion” tracking metric for ad buy latency on the Google Display Network. Still, despite high confidence in the methodology as proven across multiple industries and disparate marketers, we still faced a skeptical CMO’s mandate to “go digital, or go home”. We might have predicted that!

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