Measuring media effectiveness with a database marketing approach

The rise of interactive media, growth of direct media, and continued use of mass marketing are making it increasingly difficult for marketers to effectively communicate with consumers.

To stay ahead, marketers have historically increased their marketing and promotion efforts to ensure their messages are heard.

Today’s marketers are faced with the additional challenge from senior management: to improve consumer communications and drive sales — often with smaller, closely scrutinized budgets.

Media measurement, which determines the impact of marketing efforts by analyzing spend across various channels, can help.

When properly executed, media measurement makes it possible to determine the “cause and effect” connection between marketing actions and results, allowing marketers to optimize direct, mass and interactive channels, and more effectively allocate media budgets for future programs.

Media measurement can, and does, benefit a wide range of companies in industries that include consumer packaged goods, insurance, financial services and the pharmaceutical sector.

Broadly defined, media measurement accomplishes four objectives:

  • Quantifies the causal relationship between marketing promotion activity and sales;
  • Empirically determines the best media allocation – or mix – across channels;
  • Develops a tactical plan for media execution; and
  • Provides continuous results measurement and enables learning.

Given the advanced analytics, segmentation strategies and other database marketing approaches employed, media mix measurement seems a natural extension of traditional database marketing.

In addition, database marketing plays a key role in media mix measurement, and essentially leads the way for marketers to develop and maintain an integrated, coherent conversation with the consumer.

Using database marketing strategies outside of direct programs is a fairly new approach. After all, direct, mass and interactive channels were traditionally viewed as separate and distinct. But from the consumer’s point of view all messaging come from the same place: the brand.

To effectively conduct media measurement, marketers need data that includes sales, marketing spend, competitive activity, new product launches, market events, pricing and other industry- specific critical elements.

Once the data are collected, statistical and optimization models – similar to ones used within database marketing programs – are developed to quantify the value of each promotion channel and to determine the optimal spend level for each. Measurement processes are then developed to track the success of the media allocation.

The potential benefits of pursuing this level of strategic planning in a marketing organization are significant. The risks associated with gaining this knowledge are minimal. Even minor shifts out of a relatively inefficient media into a high performing media can realize millions.

(This article first appeared in the January 15, 2007, edition of the Essential Guide to Lists, Database Marketing & Data Services.)

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