Same Budget, More Impact with Advanced Analytics
Have you ever asked any of these questions about your marketing portfolio?
- Which digital channels should we run and how much of our budget should we allocate to each one?
- How much should we spend on our digital marketing efforts if we want to meet a certain revenue target for the year? What should our revenue target even be?
- What is the value of upper funnel marketing tactics? Are brand awareness campaigns growing our lower funnel demand?
As digital marketers, we constantly face challenges in answering such questions due to the rapid evolution of the digital world and its ever changing privacy regulations. Last touch conversion attribution is one of the most accessible measurement solutions used to make business decisions, but it undervalues the impact of upper funnel tactics and tends to overestimate the impact of lower funnel tactics. Alternative methods, such as multi-touch attribution, are typically difficult to implement, less actionable, and more imprecise due to extensive resource requirements and privacy-limited access to platform data.
To combat that, Rise built a custom incrementality and forecasting approach using Advanced Analytics.
What are Advanced Analytics?
How will Advanced Analytics help me?
The use of past and present data to predict future outcomes, enabling ideal spending levels, optimal budget allocation, realistic KPI targets, and precise measurement—all aligned to business goals.
There are several ways that Advanced Analytics helps us push the growth limits with our clients. Overall it allows for innovation alongside the changing digital landscape while ensuring growth through optimized media budget allocations.
Rise’s Four Steps to Advanced Analytics:
1. Define Success. Success looks different to every organization, so we need to start by clearly defining what success means. At Rise, we start each client engagement with a conversation around what their overall business goal is so that every strategic recommendation we make is geared towards achieving that goal. Ideally a business goal is one metric that drives the strategy for business decisions, a KPI (key performance indicator). Of course there may be individual initiatives or campaign goals along the way, but each of those should be set to ultimately still achieve the one overarching KPI — for example, revenue or leads. We define the success of our marketing efforts by growing our clients’ KPIs. Once we have that, we can start to measure it through an Incrementality Analysis.
2. Perform Incrementality Analysis. Once success is defined for a client, we focus on identifying a measurement solution to ensure all of our marketing efforts are aligned to creating incremental value.
With Advanced Analytics, Rise quantifies the numeric value each marketing effort has on our client’s business goals. We take that incremental value per dollar spent and use it as the cost to acquire a conversion from a specific tactic, rather than simply looking at the overall number of last touch conversions. This allows our clients to be able to fully fund a top to bottom-funnel media strategy, while also growing demand and remarketing pools.
To perform the incrementality analysis, we:
- Start by gathering all necessary business context including seasonality, industry trends, and any past and future strategy changes.
- The next step is to aggregate all available data, both online and offline if possible, and analyze historical performance. We build and test statistical approaches, all of which analyze how overall client revenue (or leads) are impacted at different levels of spend for each individual marketing effort.
- We ultimately select the approach and model with the best fit to the data we are analyzing. The chart below shows that Model C is the best fit to the actual conversions for this client.
- Once we have run our models and analyzed the results, we put our results into action by making budget recommendations based on the Incremental value of each tactic.
3. Forecast Return on Investment. Once we have the amount of Incremental revenue or number of Incremental leads each tactic drove per unit of spend, we combine that information with predictive models to forecast the expected return at various spend levels by tactic, ultimately selecting a budget allocation that is expected to yield the highest return.
This approach takes seasonality, recent trends, industry context, and the impact to the bottom line into consideration. Plus, the final impact includes both quantifiable and intangible benefits.
This allows our clients to determine ideal budgets, both from a volume and allocation standpoint, and also set realistic goals with expected cross-channel performance in mind.
4. Continuously Optimize. As digital marketers, we know things in the industry are changing every day. Because of that, Rise continuously analyzes performance in order to make the most comprehensive budget recommendations. Rise typically performs an Incrementality analysis for clients on a quarterly basis, performs funnel level budget recommendations through predictive analytics on a monthly basis, and performs campaign optimizations on a daily basis. This holistic approach ensures we take both a top down and bottom up approach to our clients’ media spend and continue to grow their KPIs.
What success have we seen with this approach?
Using our Advanced Analytics approach, KPIs for all clients have improved when the percentage of total budget allocated towards each tactic was most similar to what we recommended. This demonstrates the impact making decisions based on Incrementality can have on overall performance.
Rise has a team of passionate analysts and marketers who are interested in contributing to this type of success for businesses everywhere. Reach out to Rise to learn more!