Marketers today have more control over their advertising investment than ever before. By control, I mean marketers have many options for how to spend their ad dollars, very little commitment in terms of minimum spend levels, and rich data to pour through to measure results. Marketers can reallocate their ad budget weekly, daily, even hourly for certain channels. Despite this flexibility, however, many marketers still use antiquated methods to optimize their ad budgets. Here are six tips to help you systematically boost your marketing performance.
For some channels, it’s often difficult to measure marginal productivity from increased levels of advertising without flighting impression levels up and down. This is especially true with marketing channels that lack inherent tracking mechanisms. For example, a branded TV spot that lacks a call to action, unique URL, phone number, promo code, etc. Broad media channels like TV, radio, outdoor, online display (because clicks alone only account for a portion of ultimate sales) are good examples of this.
Flighting allows you to measure the performance of one marketing channel while holding all other things constant. You may have fifty other marketing tactics happening simultaneously, but as long as any other channel testing is occurring independent of your flighting plan, your test should remain unbiased.
Without flighting, it can be difficult to measure true seasonality as well because marketers tend to increase budgets with seasonal increases in demand, which confounds an analyst’s ability to read how much of the increase in sales was due to seasonality vs the increase in ad spend.
If your ad spend levels are constant, it’s impossible to know what increase in sales you can achieve with an increase in spend.
Variability in spend and impression levels improves the accuracy of media mix regression modeling and gives you a clear read of the change in sales resulting from changing ad spend levels. If your ad spend levels are constant, it’s impossible to know what increase in sales you can achieve with an increase in spend.
One low-risk way to do this is to adjust your weekly ad budgets by factors relative to your weekly average. For example, run certain weeks at 1.5x the average, 2x the average, half the average, and other weeks let your media go dark. The overall ad spend will still balance over the period of a quarter.
After the test is over, measure the change in sales attributable to your flighted test using a regression model so you can account for lag and non-linear effects. Also, if your product has a particularly long shopping cycle, make your flights longer by running more weeks at each spend level so the lag effect of varying spend levels can be measured effectively.