Chief marketing officers (CMOs) often walk a fine line when it comes to media allocation. They are tasked with managing multiple internal stakeholders with different desired outcomes – that’s no small feat! Distribution wants marketing efforts to broaden awareness to help secure shelf space. The chief financial officer (CFO) wants to see a sales boost and solid return on investment (ROI). The product team wants their newest, most innovative creations to be clearly showcased. Meanwhile, the CMO may have a significant amount of data on media reach but might not have the knowledge on how to apply that data in a way that reaches the company’s goals.
Market research can help
In order to balance all of the wants from stakeholders, CMOs will have to show why they are making certain marketing budget decisions. Data and insights can be a valuable tool when developing a marketing budget. In fact, 83 percent of marketers intend to increase the role of analytics in marketing over the next 12 months. So, what types of market research can provide clarity on where to spend your marketing budget? Here are a few to consider:
Media Mix Modelling (MMM) – MMM is one of the most comprehensive types of market research. It takes the entire media mix into account and enables CMOs to understand how each individual media spend has impacted performance and driven KPIs. It can also provide predictive analytics into how future adjustments or tactics will impact ROI.
Deep Learning Marketing Analytics – Utilizing a deep learning platform (software that capitalizes on AI/machine learning) can help determine the effectiveness of an organization’s marketing efforts, promotions, retail sales and other marketing-related investments. Because of the automated nature of this type of market research, it often takes a fraction of the cost and time of traditional MMM. It’s projected that companies using insights from AI and machine learning will gain $1.2 trillion more in media efficiencies than those that don’t.
Path-to-Purchase – This type of market research is a simplified version of the other models and focuses primarily on the customer journey. It can identify which media platforms perform best at moving people along the sales funnel from awareness to consideration to purchase. This is an even lower cost option and can require as little as half the investment of Deep Learning Marketing Analytics. That being said, it won’t provide as many targeted points of insight as the other two options.
Determining the best option
Achieving success through market research will require buy in and commitment from the whole organization. All insights are based on the original information that’s submitted to the market research firm. Ensuring the data quality isn’t lost when multiple departments are involved can be challenging. It’s vital each department works together, and that CMOs stress that contributions must be the most accurate data available. This data collection period should also be used to review market research budget availability and marketing and sales performance goals. These conversations will lead to choosing the right model for your needs.
Clarity on which of these processes is ideal for your company’s goals can save time and money, which can then be applied back into the media budget. The research should help inform your company as to where they can optimize media spend in the future—including ideal campaign periods, how to manage budget and media pressure and, of course, how to ultimately arrive at the right media mix. It should provide a complete view of marketing performance at both the media and campaign level in order to guide reallocation of budgets between channels, tactics and media placements, and help drive the highest ROI across all channels and products.
Testing the waters
If the market research results indicate there should be budget changes, consider running a small proof of concept test to show the effectiveness of the insights and provide early wins. Be prepared for push back as there may be some stakeholders who are losing budget allocation. These small tests are also recommended as it will take time to organize disparate data sources in formats that allow for modeling, to run the models and then to test those adjustments and refine strategy. This type of market research and adjustment should be continuous. The timelier the insights are received and acted upon, the more impactful the results will be.
Hold on tight
As CMOs receive more pressure from stakeholders to connect with target markets and prove ROI, the more likely they are to tap market research. It’s going to be an exciting and game-changing time with rewards including increased performance and the ability to make small budget changes that drive significant impact. The most vital step will be determining the right marketing research path for the company’s goals. Once that’s done, it’s just a matter of rolling up your sleeves and digging into the data.