Marketing/Media Mix Modeling - Bad Cop or Not?
Is everybody doing it? Is it the NEXT big thing? Or was it the LAST big thing? I do know this... most companies that I talk to are either trying to do it, or they really want to do it. But, there are very few that seem to leverage it successfully.
For those who aren't doing it, or who are struggling, it may seem that the reason is due to lack of appropriate data. Well, sometimes that is the case but in most cases that I've come across, it's really not about lack of data. It's a political thing.
Lots of people find it threatening:
- Individuals, within a client company, who have budgets (like advertising, DM, PR, sales, other promotion, etc.) may like the idea of it, in theory. But, when it comes down to it, they are afraid…afraid that it will mean that they lose some of their budget.
- The client's vendors (ad agency, DM agency, PR agency, media-buying agency, etc.) are also afraid of it, as it may translate into less revenue for them.
- And from the agency side, initially, most media planners/buyers, whom I have ever worked with, find it threatening too. They feel like I am telling them how to do their job, or casting doubt on their abilities to effectively plan/buy media for our clients.
So, because of the fear, it becomes difficult to get the data. Groups within a company, who may own the data, may put up roadblocks, which will slow down, or even prevent, data collection. These roadblocks can get even worse when it comes to collecting data from other vendors, like the ad agency, the media agency, etc.
So, how do we get around it?
Well, in my experience, one of the key ways to avoid the hassle is to have the project endorsed from the top down. In other words, if the CFO or CMO wants a marketing mix project to succeed, it's amazing how quickly data can be collected. And if the CMO goes to the ad agency and the DM agency and requests the data, it’s usually pretty hard for them to say no. Really, what CFO or CMO wouldn't benefit from a marketing mix analysis? It would tell them exactly what they were getting from each of those allocated budgets. Not to mention, it would inform their budget optimization exercises and allow for projections and scenario planning.
So, if you are in the advertising group, should you be worried about the results of the marketing mix analysis? Well, maybe, but not necessarily. For one of my clients, it turned out to be the best route. In this case, the marketing group voluntarily started conducting marketing mix modeling on its own. The results told them incrementally how much business they were getting from each marketing dollar spent. Within the marketing department, they used it to optimize the overall marketing budget, across various vehicles (TV, radio, magazines, newspapers, online, DM, etc.), and as a result, saw continued growth in business (generated from marketing) annually, for several years. But, it had an even bigger benefit outside the marketing department - with the CFO. Because the marketing group was the only group that could mathematically and accurately tell the CFO what he was getting for his money, this was the only group to get budget increases each year.
And, what about those media planners/buyers with whom I have worked? Well, years ago, one of them answered my question for me. I was working with one of my favorite media execs right before the upfront in NY one year. I had just finished a new set of marketing mix models for the client, and I had discovered some very actionable insights. But, I was worried about how to make my recommendations to him. I didn't want to tell him how to do his job. After all, I'm not a media planner! Finally I decided to just go over and chat with him. So, I sat down in his office and tried to find a very diplomatic way to tell him that NBC was the most efficient/effective network for our client's spots. And, more specifically, The Today Show and primetime Drama were the programming of choice. In addition, I had to break it to him that Reality programming (contrary to current prevailing opinions) was the last programming that I would ever recommend buying, given its abysmal performance for the client. To my surprise, a big smile spread across the media guy's face! “No problem”, he said, “you’re making my job in NY over the next week, a WHOLE lot easier! Now, I don't even have to meet with the other networks. And, I know exactly what programming to negotiate for, on NBC. This will save me a lot of time running from meeting to meeting. Boy, wouldn't NBC kill to have this kind of data to use in their pricing negotiations!”
So, there you go – another way to think about it – I'm making their jobs easier. So, I'm not ‘Bad Cop’ after all…. Phew!
