Making brands successful: Optimising marketing return on investment

Abstract

Despite the availability of fact-based approaches to measure the impact of marketing, many practitioners still rely on ‘gut feeling’ to make their budgeting decisions. In large part this is due to the incompleteness of available analytical approaches. The core approach for fact-based decision making — marketing mix modelling (MMM) has two main deficiencies. First, MMM can capture only short-term effects and therefore significantly underestimates marketing return on investment, and leads to sub-optimally small budgets. Secondly, MMM analytics could not include social media. This paper addresses both of these deficiencies and introduces an improved MMM approach with inclusion of long-term effects and ability to measure the impact of social media. This new approach is illustrated with two case studies — one from consumer packaged goods and another from telecoms.