Eric AndersonVP of Emerging Media

White Horse

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

This presentation on media mix optimization is brought to you by the letter “S.”

 

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

As complex as media planning has become, it has never deviated from the simple formula of the “S” curve.

 

A campaign that defines its success by lift – e.g., sales or brand awareness – will have an S as its goal.

 

Sales

Impressions per Target

Threshold where you’re delivering the minimum impressions to impact sales

Point of equilibrium where you’re delivering the right number of impressions for max ROI

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

As complex as media planning has become, it has never deviated from the simple formula of the “S” curve.

 

A campaign that defines success by reduction – e.g., in cost per lead – will have a reverse S.In both cases, we’re chasing that point of maximum efficiency before performance tails off.

 

Cost-per-Lead

Impressions per Target

Point of Equilibrium

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The S-curve is pretty simple to manage and measure when you’re working in only one medium – especially a measurable one.

 

Sales

Impressions per Target

Ramp up impressions!

Ramp down impressions!

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It becomes insanely complex when you’re working in multiple channels. If you can’t isolate the contribution of each channel, how do you know how when you have the right mix?

 

Sales

Print, Web, TV, Outdoor Total Impressions per

Target

Ramp up display impressions? Print? TV? A little of each? A lot of one and a little of the others? Yes for one demographic, no for others? And when will we know if it worked?

With all these channels, can we even find equilibrium before the campaign ends? Probably not.

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Like baldness treatments, various methods have been tried – but none of them are entirely convincing.

 

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Method 1: Common cross-channel metrics, like good old-fashioned reach & frequency.

 

See here, old boy – Reach and Frequency work just fine!

You figure out your target audience, then how many impressions each channel can give you for that audience, then you divvy up your media that way!

Traditional Media Buyer

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Method 1: Common cross-channel metrics, like good old-fashioned reach & frequency.

 

R&F is so last century, 1950s Dude!

It doesn’t actually measure performance. You still need separate models to figure out what R&F is best for your goals.

Contemporary Media Buyer

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Method 2: Control for the incremental impact of adding another channel.

 

You can do that sequentially…

 

Problem: People don’t actually consume media as if they’re wearing out a pair of shoes.

 

Source: The Ephron Consultancy

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Method 2: Control for the incremental impact of adding another channel.

 

Or you can do it simultaneously, one channel at a time.

 

Problem: How expensive and complicated is this going to get when you’re dealing with 4 or 5 channels?

 

Source: Avenue/Razorfish, “Actionable Analytics”

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Method 3: Ask users which channel delivered them, then optimize based on results.

 

Problem: This remains stuck in the “last click” rut – it only accounts for the last exposure the user had, not the cumulative impact.

 

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

Method 4: Go behavioral – figure out how your target consumes media, then divide accordingly

 

Problem: better than R&F, but it’s still directional. You don’t know how each channel actually performed, so you’ll still waste money.

 

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Method 4: Go behavioral – figure out how your target consumes media, then divide accordingly

 

Forrester has tried to improve this model by combining behavioral data with the strengths of a given medium (e.g., TV is good for awareness) to produce a mix.

 

But at the end of the day, it’s, yes, directional – a best guess at what will work.

 

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

If you use any of these methods, you’re in good company.

 

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

Media planners mostly agree: to truly know what works, you need to create a backwards-looking model that analyzes the impact of each channel.

 

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

But that can be difficult, painful, and expensive. Most media buyers would prefer to use limited model data combined with educated guesses.

 

Which is exactly why the shift to new media is nerve-wracking: the old models are no longer reliable.

 

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

In digital media-buying, though, we have the luxury of knowing (almost) exactly what works.

 

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

The real break-through came when we moved beyond the “last click” fallacy and could measure the contribution of every exposure.

 

Source: Avenue/Razorfish, “Actionable Analytics”

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

We can create precise sequences of ads and serve them based on the user’s actions and past exposure.

 

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

And we’re no longer beholden to clicks – we can measure the actions of users who saw ads but showed up later.

 

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

So if digital is so good at creating media mix models, what can it do for offline media?

 

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

Answer: LEAD WITH DIGITAL to create the offline media model.Test digital venues based on goals, then map those venues to their offline counterparts.

 

Awareness Preference Purchase

TVRadio

Outdoor Newspaper Magazine

PRDirect Mail

Takeover Display

Interactive Display

Paid SearchSponsored Content

Standard Display

AffiliatesSocialVideo

OFFLINE

ONLINE

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Example: Create a digital campaign based on driving early awareness leading to direct conversion.

 

x

Hypothetical Ad Sequence

Takeover Takeover Interactive Interactive Offer Offer

There’s something new coming from Brand X. I keep seeing these teaser ads.

I get it – their new campaign is a whole new

take on Category Y. I’ve got to have this thing.

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Create a 90-day test that determines the optimal number of combined awareness and offer impressions to produce a conversion.

Then you’ve not only got your S curve, you also know which venues produced it.

 

x

Sales

Impressions per Target

Users exposed to a sequence of ads:•Takeover•Interactive•Offer

Optimal impression path: two takeovers plus offer.

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

Feed this data into your cross-channel planning. Apportion your impressions according to what actually worked.

 

x

Takeover Display

40%

Video20%

Standard Display

25%

PPC15%

Online Model

TV40%

Video20%

Magazine25%

Direct Mail15%

Cross-Channel Mix

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Which begs the question: if digital can do it all, from awareness to sales, why not just spend it all in digital?

 

x

Well, some brands have come to that conclusion.

 

x

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

But the reality is every channel still has its strengths, even if understanding the combined strength is so difficult.

 

x

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

By using digital to model the media mix, we may finally be able to answer John Wanamaker’s famous dilemma:

 

x

Answer: It’s the half you’re not modeling.

 

x

I know half of the money I spend on advertising is wasted.

The problem is, I don’t know which half.

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

Recommendations

 

1.The most important thing, whether cross-channel or single-channel, is to know your S-curve. 2.Next most important: go beyond R&F and allocate according to goals and the behaviors that accompany them. 3.But to find marketing mix nirvana: you need to know what works based on real data and be able to divvy your budget with the serenity of the Buddha.

 

© 2009 White Horse Productions, Inc. Content may not be reused without permission.

 

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Eric Anderson, VP of Emerging Mediaeanderson@whitehorse.com

www.whitehorse.com | Twitter: @whitehorsepdx | Blog: http://community.whitehorse.com

 

© 2009 White Horse Productions, Inc. Content may not be reused without permission.