Answering one of marketing most frequently asked questions:
One of the most enduring questions about the resource allocation concerns the proper mix of online and offline advertising investment. What is the right mix of ad spend between TV and digital? Answering that question often involves applying a classic bit of marketing effectiveness analysis known as marketing attribution. Essentially linking a business outcome to the marketing initiative that drove it, attribution analysis is not only integral to advertising success but also a key driver of securing buy-in from the executive boardroom.
Until very recently, calibrating online and offline advertising investments involved marketing mix modeling (MMM) or econometrics. This type of high-level, probabilistic attribution has long been the go-to model for yielding valuable insights regarding the relative effectiveness different advertising channels have on consumer behavior. With that knowledge, marketers are able to forecast future business performance and adjust their budgets to achieve better outcomes. Two drawbacks of MMM, however, are that it’s typically ‘backward-looking’ and that it takes significant time to execute.
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