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Business Intelligence for Marketing Executives
White Paper:
Marketing Mix Modeling & Optimization
The Science and Utility of Quantifying All-Media ROI
Written by
Roy W. Ralston, Ph. D.
President & CEO, Polaris Research, Inc.
About Polaris Research Polaris Research, Inc. is a recognized leader in decomposing historical marketing results to determine ROI across the entire media landscape. Our marketing analytics and insights empower companies to optimize spending levels within and across media channels based on individual elasticity and performance to realize millions of dollars in savings. Copyright © 2009 Polaris Research, Inc. (PRI), Confidential & Proprietary. May not be used for any purpose without the expressed written consent of PRI. www.polarisresearch.com, 817-223-1229 1 Capability Overview Polaris Research's Marketing Mix Modeling & Optimization (MMMO) is a quantifiable process that links a marketing mix (media channels, promotional tactics and budgets) to important outcomes such as clicks, calls, visits or more importantly sales revenue, margin and market share. Armed with this information marketing executives are able to optimize the allocation of budget dollars across media channels and promotional tactics to achieve immediate increases in ROI of up to 35%. Our key insights include ROI metrics for elusive media efforts such as brand advertising, sponsorships and promotions. We also quantify elasticities for each of the media channels and tactics measured to provide decision makers with the information they need to manage budget fluctuations. Best of all, our MMMO platform encompasses all of these insights in a secure online portal complete with running 13-week forecasts that are accurate to within 2% of actual results. Key benefits include: . Measure and forecast the performance of marketing strategies more accurately: 1. Quantify the ROI of all media channels and promotional tactics. 2. Review continuous all-media ROI reporting and forecasting via our online portal. . Maximize marketing ROI: 1. Optimize the allocation of product and brand advertising budgets to maximize consumer response, sales and ROI. 2. Determine budgets necessary to reach targets and quantify the ability of various promotional tactics to close short term gaps in forecasted goals. 3. Qualify new marketing strategies without incurring in-market opportunity costs. . Enhanced Planning 1. Develop the most productive weekly multi-media/marketing calendar possible. 2. Utilize scenario planning capabilities with the MMMO software-supported platform to answer real or hypothetical business challenges. Our Approach Our MMMO approach is integrated within a comprehensive view of customers, employees, products and markets that we call our Quality-to-Marketing-Management-System (QTMMS - see illustration below). QTMMS captures the impact of marketing mix, brand, customer experience, pricing, value perceptions, employees, economy, competition and many other factors critical to success. Brand External Factors TV Consumer Radio + Confidence + + EconomyPrint + Competitive MovesOnline Channel Sales, Consumer Price IndexInserts Revenue, Market Direct Mail ShareSponsorships + Price Re+gionIn-Store CompetitivenessRetention Promotions Product Mix Segment / Target ++ Consumer Loyalty +
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Expectations Perceived Quality Perceived Value + + + Consumer Loyalty Programs / Service Quality / Employees
Copyright © 2009 Polaris Research, Inc. (PRI), Confidential & Proprietary. May not be used for any purpose without the expressed written consent of PRI. www.polarisresearch.com, 817-223-1229 2 Certain factors change from industry to industry, but the overarching system has been applied with great success across virtually every major industry. Our QTMMS approach provides the flexibility for us to include traditional aspects of the marketing mix (media, pricing, promotions, etc.) into our models as well as other critical measures of success such as Brand Tracker Survey Results, Employee Survey Results, Internal Quality Metrics, various External Factors (economy, competition, etc.) while allowing views across important dimensions such as customer segments, products, channels, geography, etc. ... [download for more]
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