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Flighting your advertising: The Ultimate Guide

by BlogKeen Insights

What is Flighting In advertising?

Flighting in advertising is a media purchasing strategy that alternates between periods of actively running ads and rest periods. Flighting or “flight” is the time when ads are running, while the period with no advertising is called a hiatus.

An example of flighting in advertising is a soup company might want to flight during the colder winter months and pull back spend as things start to heat up over the summer.

Why do advertisers use flighting?

Flighting is used for two main reasons – to save budget or to take advantage of seasonality.

It is most commonly used in the context of television ads, which are expensive. A brand manager might not have the budget to run continuous TV commercials all year, but still want TV to be part of a broader strategy.

The theory is that the brand will continue to receive the residual impact of the ads that ran during the flight period while in hiatus. Marketing will have an influence on sales that will last longer than the timeline of the campaign ran. The brand gets to save budget and use that money as part of an omnichannel approach, while still helping to drive new sales through TV.

Some brands have a seasonal sales cycle. For those types of brands they are going to want to save money during their slow periods and advertise more heavily when their product has higher demand. Flighting helps these brands control spend and maximize the impact of their marketing in high-demand periods.

What are flight schedules?

The schedule is cadence of the flight and hiatus periods. The key to a successful flight strategy is finding the right schedule. You could flight for 2 weeks and go on hiatus for 2 weeks or flight for 4 and hiatus for 4. Keep reading to see our research on optimal flight schedules.

Alternatives to flighting?

Continuous Marketing

All things being equal, this is what Keen would recommend for the vast majority of brands. An even spend throughout the year is going to help brands see the highest return on their marketing investment.

Pulsing

This strategy is a mix of continuous marketing and flighting. Instead of going on hiatus, the brand lowers spend in one period and increases during the next period. This way the brand doesn’t completely lose the momentum from their campaign while maintaining some control over their budget.

The best flight schedules: Keen Research

At Keen, we help marketers plan their budgets and maximize. Using data from the Keen Platform, we took a look at different flight schedules to show the impact of these schedules on net profit.

Our case study compared three scenarios of linear TV advertising:

  • Always-on: The brand maintained a consistent advertising presence, with no hiatus periods.
  • 2-week flighting: Ads ran for two weeks, followed by a two-week hiatus.
  • 4-week flighting: Ads ran for four weeks, followed by a four-week hiatus.

2 Week Flight

 

4 Week Flight

Results

The impact of going dark: We found that after a two-week hiatus, the first week of flighting generated 91% of the profit compared to the always-on strategy. However, each additional two-week period of going dark led to a 1% decline in the profit generated on the first week of flighting again. This indicates that longer hiatus periods can negatively impact profitability.

Longer hiatus periods: When comparing the 4-week flighting strategy, the first week of flighting after a four-week hiatus generated only 88% of the profit compared to the always-on strategy. This further demonstrates the quantifiable impact of “going dark for longer.”

Building equity with longer flighting periods: Although the first week of flighting after a four-week hiatus started at 88% of the profit, by the fourth week, we observed up to 95% of the profit compared to the always-on strategy. This suggests that consistent advertising activity can help brands build equity and recover potential profit losses.

The winner: Our study revealed that the 4-week flighting strategy outperformed the 2-week flighting, primarily because the long-term impact of marketing allowed brands to build equity and create more value with consistent activity.

If you are doing a flighting advertising strategy, know that you are likely going to sacrifice net profit from the channel you are flighting. What you need to decide is whether the opportunity cost from distributing the saved funds elsewhere is greater than net profit lost during your flights.

Is Flighting your advertising budget the right strategy for your business?

The Keen Platform can ingest the data from your brand, pair it with 40 years of academic research and 10 years of our metadata to create a marketing mix model that predicts your future revenue.

If you are interested in using flighting or want to know what your optimal schedule should be, our models are used to run different scenarios and help you make an informed decision with your budget, in weeks, not months.

Get in touch with us today and see how we can help.

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3 Reasons not to go “dark” during a recession

by Blog

As we step further into a recession, accompanied by high inflation and continued supply chain disruptions; marketers are being forced to cut budgets and expected to do more with less. This leaves only difficult decisions as you navigate these challenging economic times while still delivering value to the brand.

Often, the knee jerk reaction during uncertain times is to cut marketing spend. But, going “dark” during a recession will have long term negative impacts on your business:

Loss of brand awareness

When  times are tough, consumers become more cautious about their spending habits. This means that they may be less likely to buy from brands they aren’t familiar with. By maintaining your marketing efforts during a recession, you can keep your brand top-of-mind for consumers. This can help ensure that your brand remains relevant and recognizable, even when people are cutting back on spending.

Miss out on reduced competition

During a recession, many brands cut back on their marketing efforts. This can create a vacuum in the market, leaving an opportunity for brands that continue to invest in marketing. By maintaining or even increasing your marketing spend during a recession, you can take advantage of this reduced competition and increase your market share. This can help your brand emerge from the recession stronger than ever before.

Decrease long-term growth

While cutting marketing spend may provide short-term cost savings, it can hurt your brand’s long-term growth prospects. Marketing is essential for generating new leads and acquiring new customers. By reducing your marketing spend, you may be limiting your ability to attract new customers and grow your business in the future. By maintaining your marketing efforts during a recession, you can ensure that your brand is well-positioned for long-term growth.

For more than a decade, Keen has worked with hundreds of companies and proven that brands that continue to spend during difficult times are at a competitive advantage to those who went dark. 

Get Keen and answer the following questions:

  1. If I have to cut my budget, where, when, and how much should I cut while still remaining profitable?
  2. How should I adjust my spending in order to still hit my targets?
  3. How much do I need to spend to maintain a competitive advantage?
  4. How do I account for changes in consumer demand and behavior associated with inflation and a recession?

Cutting marketing spend during a recession may seem like a good way to save money, but it will actually hurt your brand in the long run. By utilizing the Keen Platform to inform your marketing efforts, you can maintain brand awareness, take advantage of reduced competition, and generate long-term growth for your business. 

Keen to know more? Check out the “How to win in a down economy” blog to get additional tips on how to improve your job security and stay profitable during a recession. 

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How to Win in a Down Economy

by Blog

With our economy settling into a recession, it’s likely many brand marketers and P&L owners are facing unprecedented challenges in the market. Inflation, supply chain disruption, budget cuts, and marketing team layoffs are just a few examples. The after effects of Covid have created an environment of tough decisions—budgets are going down instead of up, and we have to hit the same targets with less. 

Keen CEO Greg Dolan managed a brand portfolio through 2008 without tools or software. Reliant on an old-fashioned marketing mix and a 200-page PowerPoint that arrived six months too late, he tried to make inferences about what to do next. Without on-time decision support, he made the call to reduce media investment and deploy it to trade. This strategy not only didn’t work, but it also put the brand at a losing advantage when the marketplace turned up again. However, working through such an uncertain time brought him invaluable insights and knowledge that he can now use to guide decision making as we move closer to another recession.

Here are three rules to follow from his marketing playbook to keep your team winning through a down economy.

Focus on non-working dollars

When budgets get cut in a down economy, the playbook for staying profitable follows a few key moves. The first one is to focus on non-working dollars, such as agency fees, consumer research studies, concept tests, and market segmentation, that do not create short-term impact. Pushing those efforts out to 2024 frees up dollars to improve marketing performance today while still helping you become a top player in tomorrow’s market. 

Make budget cuts where they will hurt the least

While this might seem like an obvious rule to follow, the nuances of it are quite complicated because it can be difficult to make good choices in a constantly evolving landscape. So the easiest way to accomplish this is by using software to help guide your decision making. Having the ability to simulate external environments and conditions, and look at other challenges brands are facing, empowers you to make the right decisions right now. 

Take the guesswork out with Keen

Keen Decision Systems allows you to more accurately and quickly plan, adjust, and report on your marketing mix strategy while delivering short term ROI. This enables you to shift dollars to areas where you can see the topline impact by the end of the quarter. Replace the delays and data gaps (no more 200-page PowerPoints arriving six months too late) of the old-school MMM approach with the industry’s first and only decision optimization software rooted in predictive analytics. 

You can’t afford to wait

Brand marketers need the confidence and ability to prove they are making the right decisions during this difficult time. Because our product gives you real-time insights that translate to better results in a quicker turnaround time, we give you the power and knowledge to pivot your marketing mix strategy into one that gives you a winning ROI no matter what the market looks like.

Curious to learn more? Watch the latest Keen Takes video here.

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The importance of maintaining brand equity through a recession

by Blog

When it comes to being successful in business, a strong brand can make all the difference. Having a well-established presence in the marketplace often means a company can charge a premium price for its product or services, build customer loyalty, and make it more difficult for competitors to attract the same base because consumers perceive the products of well-known brand names as better than those of lesser-known ones. But what constitutes a strong brand? This is where brand equity comes into play.

Brand equity refers to the added commercial and social value that a product or service with a certain brand name has over the same product or service without the name. It comprises the consumer’s awareness of the brand, the associations they make with it, and how they perceive the quality of the brand. This added value can be positive or negative and can be influenced by factors such as brand reputation, customer loyalty, and advertising.

A company with high brand equity will have a distinguished reputation and name recognition among consumers, which can make it easier for the company to launch new products or expand into new markets. It can also serve as a valuable asset that can be sold or licensed to generate additional revenue. Essentially it’s important to have a prominent brand because it can have a significant impact on a company’s financial performance and overall success.

The building blocks of business success

So now that the importance of having brand equity has been established, how does one go about building it? The process of building brand equity requires a long-term, strategic approach that focuses on creating positive associations and experiences for customers. It is an ongoing effort that requires a combination of factors such as:

  • Providing high-quality products or services and using consistent branding across all touchpoints
  • Building loyalty through excellent customer service and gathering feedback to continually improve the brand
  • Connecting with customers on an emotional level by communicating brand values and story in a way that resonates 
  • Developing and executing marketing strategies through effective advertising that build a positive reputation and convey the unique benefits of your brand 

Though building brand equity requires effort and commitment, it can provide a valuable competitive edge and significant long-term benefits to help companies achieve ongoing success in their markets.

One of the most important factors in building brand equity is consistency. Consistent branding helps establish a clear and recognizable identity, which can increase brand recognition and recall, which can then lead to building trust in the minds of consumers. It also helps differentiate a brand from its competitors and reinforces its unique value proposition, making it easier for customers to make an emotional connection with the brand. 

Given the current economic climate, consistency may be more important than ever. Customers are more cautious about spending during a recession, which can lead to decreased demand. While shutting off marketing during a recession can be a tempting cost-saving measure, it can have negative consequences for long-term business performance. When a company stops or reduces its marketing efforts, it often leads to diminished brand awareness and customer engagement, which can result in reduced customer loyalty and sales. 

Consistency is key

Because it is impossible to accurately predict how long a recessionary type environment could last, it is crucial for companies to maintain their marketing efforts to maximize their brand equity. But while consistency is essential for companies during a recession, it is equally important for them to be strategic. Pulling back on certain investments means potentially ceding strategic leadership by driving the category to other competitors.

Instead, companies should consider alternative cost-saving measures, such as adjusting their marketing mix, optimizing their ad spend, or focusing on more cost-effective marketing channels. If they maintain their spend, investment, and R&D innovation through difficult periods, brands are going to find themselves in a better competitive position when the economy recovers. One way to successfully accomplish this is through the use of data and technology platforms that can offer visibility into interaction effects between channels and give marketers a holistic view of their business.

For brands to continue to operate and grow in a difficult environment, they need to continue to invest in building their business, brand, and equity. If they pull back in these areas, the potential for them to lose their spot and their competitors to claim a higher share of the market grows exponentially. Whatever their position, it’s imperative that businesses think about forward trajectory and don’t get mired in the difficulties of the present because not doing so may wind up ceding leadership to someone else. By continuing to market their brand, companies can maintain customer engagement and set themselves up for future growth when the economy improves.

How Keen can help

Advances in machine-learning and AI technology have made it possible—and advisable—for marketers to incorporate timing into their marketing mix planning, which can help guide decision making for brands in times of uncertainty. An inherent benefit of technology is its ability to speed things up and automate the process of doing more math and breaking analyses down into smaller units. So now, marketers have the ability to optimize their marketing mix across all channels and weeks to maximize the value generated from spend decisions and minimize the risk of veering off course. 

With the industry’s first and only decision optimization engine rooted in predictive analytics, Keen empowers brand leaders to plan, adjust, and report on their marketing mix strategy faster—and with more accuracy—than a traditional marketing mix modeling approach. Informed by 40 years of academic studies, 10 years of client metadata and recent marketplace dynamics, and thousands of economic elasticity models and priors, our tool equips marketers to quickly start driving both short-term and sustainable value while simultaneously building brand equity.

So don’t fall into the trap of common knee-jerk reactions in marketing like shutting off spend or going dark during a recession, which can be harmful to a company’s reputation. Instead, Keen can offer real-time marketing insights to help you learn from what you’ve spent, pivot based on your goals, and predict the best path to maximize value, today and tomorrow.

Interested to learn more? Request a demo model.

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How to troubleshoot common challenges in the current recession

by Blog

The pandemic ushered in an economic climate like no other in recent years, and with it came a unique set of challenges for marketers. Brand managers are being asked to meet expectations and still grow with limited resources as budgets are being cut across the board. And the evolving role of data and advanced technology platforms in driving future marketing plans continues to increase.

In the second installment of our interview series, ReveNew, Keen CEO Greg Dolan sat down with Cesar Brea, partner at Bain & Company, to talk about common knee-jerk reactions marketers make during recessions and why they are bad for business. They also discuss the impact of supply chain, labor, and inflation challenges on marketing decisions. 

Here are three big takeaways you don’t want to miss.

Find your bottleneck

While previous recessions have often involved demand and unemployment problems, unprecedented factors like the pandemic and War in Ukraine have impacted the current economy in new and different ways. An increased inability to source products has contributed greatly to supply chain shortages and the labor problem is twofold–not only finding potential recruits, but also being able to pay the salary they demand. With inflation, things are more expensive but people have less disposable income, and this collection of challenges is hitting us in new ways.  

It’s less about cheap capital, low interest rates–and knowing you could be profitable with some support–and more about execution, or making sure you don’t waste money. Essentially, it’s about selection, and being precise with regard to the opportunities you choose to pursue. And knowing you can have success with these specific products and customers because the supply chain, labor, and price dynamics are such that people are still demanding in those sectors.

In today’s landscape, it’s essential for marketers to know their purchase paths and be able to identify bottleneck areas along it. If you have a conversion issue–whether it’s a technical, economic, or price issue–it doesn’t make sense to keep pouring money into the engagement and awareness buckets because you’re not converting that traffic. And in a recession,  that is going to do damage to your brand and bottom line. So the best case is to know where your bottleneck is and shift your attention, spending, and solutions to that place in the path.

Campaign optimization is key

When faced with unprecedented challenges, it can be difficult to know which key levers to pull in order to address them. Oftentimes, marketers’ knee-jerk reactions are to make sure search engine marketing is performing effectively or to pull the promotional optimization lever, which are both important to efficiently harvest near-term demand. But the foundation to any good solution actually starts with an accurate identification of the problem you’re trying to solve.

Identifying the objective of your business based on what environment you’re in, and then being able to have the data and information to understand what’s impacting your business and why, will give you a better understanding of what to do. Not having that clarity of understanding can lead to impulsive decisions, like cutting all the spend, moving money into the wrong buckets, or optimizing in the wrong direction from a creative perspective.

Reorganization and full integration can be intimidating, so it’s smart to look for the practical thing you can do. One value opportunity is campaign optimization, which requires a certain degree of information integration. This means bringing together data and people that don’t often experience high levels of engagement, but doing so at a slower, more collaborative pace than suddenly shifting the existing structure. Having this ethos of lightweight integration, both organizationally and data-wise, is key in getting your brand through the recession. 

The evolving role of technology

The value of coordination and cross-functional collaboration is undeniable when it comes to making marketing decisions from a holistic perspective. But so is thinking about the evolving role of technology. As data becomes more organized and access to platforms with the ability to analyze and leverage machine learning to optimize decisions more available, marketers will be able to see results more quickly and  action them through a more agile organization. This will, in turn, help support quarterly and yearly initiatives and goals, and ultimately lead to a higher ROI.

Some of the latest machine learning technologies enable us to more efficiently generate the content we need to support experiments that aren’t possible from a traditional, manual approach to content creation. Marketers can feed the tech content and it comes up with automated or AI authored images or videos. And, if you can take text and create images, you can also evaluate images, extract metadata, and do automated tagging, which might find new dimensions to describe content that creative taxonomies haven’t anticipated or emphasized. This, In turn, creates new optimization opportunities.

Technology is a major player in the field of marketing. The ability to be agile in leveraging data at a granular, localized level is paramount to drive the business forward. In fact, some CMOs would like to see the majority  of team decisions made through automated technology and data. This means content optimization or deployment of resources and investment across channels could all be fueled through data and advanced technology platforms that can continue to help the marketer learn as the future unfolds.

Plan for the future, today

In recent years, many organizations have begun making digital transformation efforts–which largely took the form of foundational investments in tech, customer data platforms (CDPs), dashboards, or other platforms. But one of the challenges is making sure you implement these initiatives with a focus on delivering a quarterly return on investment. Otherwise, without an end-to-end perspective, they have the potential to grind to a halt before they’ve had a chance to restart.

Today, things are doable in a way they have never been before, and it’s time to invest in these capabilities. That way, when this tough economic period passes and the market moves into a recovery phase, your brand or organization is in a much better place to effectively compete than your competitors. Get ahead now by improving your ability to leverage the data you’ve already invested to have, and by taking the necessary marketing steps to prepare for challenging times.

Keen to learn more? Check out the interview here.

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The difference between mixed media modeling and multi-touch attribution

by BlogSuccess Stories

Marketing attribution is the process of assigning credit to different marketing channels and touchpoints for a conversion. This allows businesses to optimize their marketing efforts and allocate budgets more effectively. Mixed media modeling and multi-touch attribution are both useful marketing analytics techniques, but they serve different purposes. While multi-touch attribution is a valuable tool for understanding the customer journey and optimizing individual marketing channels, mixed media modeling provides a more comprehensive view of marketing performance and helps businesses make more informed and effective marketing decisions.

Here are some ways mixed media modeling differs from traditional multi-touch attribution methods:

Holistic view of marketing performance: Multi-touch attribution is limited in its ability to account for cross-channel interactions and the effect of offline touchpoints on online conversions where mixed media modeling considers these and provides a more comprehensive view of the customer journey. For example, it can show how television advertising affects website traffic, or how social media engagement affects search engine rankings. This allows businesses to identify new opportunities for growth and optimize their marketing strategies accordingly.

Use of first-party data: Mixed media modeling allows for the incorporation of first-party data, such as website and customer data, to provide a more detailed and accurate picture of the customer journey. In addition, it can enable more precise audience targeting and personalization of marketing campaigns, as well as provide insights into customer behavior and preferences that can inform product development and improve overall customer experience. By leveraging first-party data in mixed media modeling, businesses can build stronger relationships with their customers and gain a competitive edge in the market.

External factors: Mixed media modeling can provide brands with valuable insights into the impact of external factors on their marketing performance. For example, it can help brands identify how changes in the competitive landscape, such as the entrance of new players or changes in pricing strategies, are affecting their ability to attract and retain customers. It can also help brands understand how shifts in consumer behavior, such as changes in shopping preferences or the adoption of new technologies, are affecting the effectiveness of their marketing efforts. Through these understandings, brands can adjust their marketing strategies accordingly to stay competitive and maintain a strong position in the market.

Use of advanced modeling techniques: Mixed media modeling utilizes advanced modeling techniques, such as machine learning and causal inference, to provide a more thorough understanding of the relationship between different touchpoints and conversions. This results in deeper insights into customer behavior, enabling businesses to make more informed and effective marketing decisions. Additionally, the use of these techniques allows businesses to simulate and test various marketing strategies and scenarios in a virtual environment, allowing for evaluation of potential impact before real-world implementation, thus minimizing the risk of costly mistakes.

Maximize marketing performance

Ultimately, while multi-touch attribution is useful in understanding the customer journey and optimizing individual marketing channels, mixed media modeling offers several advantages that make it a more comprehensive approach to marketing attribution. By providing a more accurate view of marketing performance, mixed media modeling enables businesses to identify new opportunities for growth and optimize their marketing strategies accordingly. 

Additionally, the use of first-party data and advanced modeling techniques like machine learning and causal inference provides deeper insights into customer behavior, allowing businesses to make more informed decisions. Overall, by incorporating mixed media modeling in their marketing attribution strategies, businesses can optimize their marketing efforts, build stronger customer relationships, and gain a competitive edge in the market. 

Keen to know more? Request a demo model

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How to transform marketing strategies with the power of AI

by BlogSuccess Stories

The days of traditional advertising campaigns that rely on guesswork and intuition to make spend decisions are quickly coming to an end. That’s in part because today’s marketers have a powerful tool at their disposal: AI.

AI can help marketers respond quickly to changes in their target audience’s needs by processing large amounts of data and providing insights and recommendations in real-time. This empowers them to create and implement data-driven marketing strategies that are more effective and efficient than traditional methods. With continuously-learning algorithms, marketers can run scenarios instantly and get prescriptive and predictive assistance in their decision-making.

Real-time marketing optimization for better results

Imagine you are a brand leader for a new energy drink company. You have just launched a campaign aimed at millennials, but you’re not seeing the results you were hoping for. With traditional marketing methods, you would have to wait for weeks—in reality, even months—to get a report on the campaign’s performance. And by that time, it’s often too late to make any changes.

Certain AI and machine learning platforms allow daily, real-time data input which, in turn, generates weekly performance reports. That means you can see which ads are resonating with your target audience and which ones are falling flat so you can adjust your messaging, targeting, and creative execution on the fly to optimize your campaign for better performance. Algorithms can also analyze market and societal factors to provide you with insights and recommendations for adapting your marketing mix. So if a new trend emerges among millennials, it can help you identify it and adjust your strategy accordingly. 

So let’s say that there’s a new trend among millennials towards plant-based diets and sustainable living. As a brand leader for a new energy drink company that targets this demographic, you might be wondering how to tap into this trend. By analyzing sales and marketing data, AI can more quickly identify patterns and insights that reveal the motivations, preferences, and needs of this audience segment so you can adjust your marketing mix to align with this trend.

By leveraging the processing power of AI, marketers can stay agile and responsive in a fast-changing digital landscape. With the rise of new technologies, platforms, and consumer behaviors, brand leaders need to be able to adapt quickly and experiment with new approaches to deliver better performance and results. AI-powered marketing optimization allows decision makers to test and refine their strategies in real-time, without having to wait for quarterly or annual reports. This can help them stay ahead of the curve and respond to emerging trends and opportunities before their competitors do.

Keen to know more? Contact us to see real-life examples of prescriptive and predictive assistance derived from the AI and machine learning power of our unique decision optimization engine.

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The next evolution in marketing forecasts

by BlogSuccess Stories

Marketing budgets are crucial for businesses of all sizes, and marketers are often tasked with the challenge of maximizing returns on their spend. However, when faced with budget cuts, the situation becomes even more difficult. Marketers must be able to identify areas to optimize and prioritize their spend to ensure that they achieve their business objectives.

One of the biggest obstacles they face is forecasting the future. Whether it’s a global pandemic or some other external event, the future is always uncertain, and no one can predict with complete accuracy what will happen. However, there are ways to prepare for the unknown, and one of the most effective is by using marketing forecast tools. So who says you can’t get a glimpse of what might be around the corner?

Gone are the days of relying on a single forecast for the next quarter

Traditional financial planning has relied on historical performance data to forecast the impact of budget cuts on a business, which fails to account for the nuances of different scenarios. Fortunately, advances in technology have made it possible for businesses to go beyond single marketing forecasts and instead focus on a range of outcomes.

The key is to start with assumptions or hypotheses about what might happen. For example, if there is a new product launch, marketers might assume that it will have a positive impact on sales. However, they need to consider different scenarios that could happen, such as the product launch being delayed or customers not responding as positively as expected.

By running multiple scenarios, marketers can better understand the range of outcomes that could happen. This provides a more complete picture of what might happen in the future, allowing them to make informed decisions based on the most likely outcome. For example, if the best-case scenario is a 20% increase in sales, and the worst-case scenario is a 10% decrease in sales, marketers can plan for both outcomes and develop contingency plans accordingly.

Scenario planning not only helps identify areas to prioritize, but it also helps manage risk and pinpoint places where spend can be cut back without negatively impacting business objectives. If a marketer is faced with a 10% budget cut and is considering pulling out of paid search or TV advertising, they can input different scenarios into a tool to determine the impact on revenue and profitability. This allows them to make data-driven decisions and optimize their remaining budget accordingly.

In today’s fast-paced business environment, marketing departments need to stay ahead of the curve and predict the impact of any proposed changes to their strategy. With the ability to run different scenarios, brand leaders can now have a stronger voice when it comes to those discussions rather than just pointing to a previous study that had been done. 

By effectively demonstrating the correlation between expenditure and business goals, marketers can show other departments and stakeholders the potential impact of their proposals. This enables them to advocate for their department and ensure that the most effective decisions are made to help the company outpace the competition, whether it involves budget cuts, reducing marketing spend, or implementing a new positioning strategy.

Keen to know more? Contact us to see how real-life brands proactively adapt to budgetary, economic, and societal changes in real-time.

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The benefits of Bayesian marketing mix modeling

by BlogSuccess Stories

Marketing mix modeling (MMM) has been used for decades to help companies understand how their marketing efforts impact sales. Traditional approaches typically use a standard regression analysis, which involves fitting a linear model to the data. However, these models can be limited in their ability to capture the complexity of real-world marketing environments, and may struggle to account for factors like seasonality, non-linear relationships between variables, and interaction effects.

The Bayesian approach solves for the limitations of traditional marketing mix modeling. By incorporating prior estimates of tactic elasticity, and updating those prior beliefs with new data, the model can adapt and learn over time. This is a more powerful and flexible approach, since it can handle a wider range of data types, incorporate prior knowledge, and provide a probabilistic framework for modeling marketing data.

Here are five benefits to choosing a Bayesian marketing mix modeling.

1. ROI calculation

Bayesian MMM helps companies optimize their marketing spend by accurately estimating the ROI of each marketing channel, reflecting the impact of each on overall sales, and accounting for the interplay between channels. This allows marketing leaders to make data-driven decisions about how to allocate their budgets and optimize their resources. For example, a company may find that their ROI is higher for a particular channel than previously realized due to previously unestimated halo effects. Alternatively, if the ROI is determined to be lower than previously believed for a particular channel, they could decide to shift resources away to focus on more profitable tactics. By quantifying the relationship between marketing spend and sales, companies can gain a more nuanced understanding of how their marketing efforts are affecting their bottom line. 

2. Better decision making

Using data to understand the relative impact of different channels means companies can be confident that they are getting the most value from their marketing budgets and drive growth and profitability in a more targeted and effective way. Data-driven decision-making can lead to better business outcomes in a number of ways. By using a Bayesian approach to optimize their marketing spend, companies have more sophisticated insights, and can therefore drive more sales and generate a higher ROI. Additionally, data-driven decision-making helps companies identify areas for improvement and fine-tune their strategies over time. By continually analyzing data and adapting their approach, brands stay ahead of the competition and remain responsive to changing market conditions. 

3. Flexibility

Bayesian MMM is a flexible approach that models a wide range of marketing variables, such as advertising spend, pricing, promotions, and other factors that impact sales. This is a key advantage because it allows companies to adapt to changing market conditions and consumer behavior. By modeling a wide range of variables, companies can identify which marketing tactics are most effective in different situations, and adjust their strategies accordingly. For example, a company might find that their social media campaigns are having a much larger impact on sales during certain seasons or in the presence of other channels, and could adjust their marketing spend accordingly. By using a flexible approach, companies stay agile and responsive, and continue to drive growth and profitability in a rapidly evolving business environment.

4. Robustness

Bayesian MMM can handle a wide range of data types, including continuous and categorical variables, as well as data with missing values. This is because the Bayesian estimation process utilizes prior estimates, which allows the model to fill in any historical data gaps. This robustness provides a more accurate picture of the true impact of marketing variables on business outcomes. For example, if a company is missing data for a particular channel, a Bayesian estimation can estimate the tactic performance, and still provide accurate estimates of its impact on sales. This robustness also helps companies avoid making decisions based on incomplete or misleading data, which ultimately lead to better business outcomes.

5. Bayesian approach

Bayesian models use probability theory to estimate the likelihood of different outcomes and the degree of uncertainty associated with those estimates. This framework enables the model to incorporate prior knowledge about the relationships between marketing variables and business outcomes, which can improve the accuracy of the model. Additionally, by addressing uncertainty with a monte carlo simulation, Bayesian MMM provides a range of possible outcomes with associated probabilities, rather than a single point estimate. For example, if a company is deciding between two marketing tactics, a Bayesian model can estimate the probability of success for each tactic and offer several potential scenarios, which leads to more informed decisions about how to allocate marketing resources. 

Choose power and flexibility

Overall, a next-generation Bayesian MMM is a powerful and flexible approach that accurately models complex relationships between marketing variables and business outcomes using prior knowledge. It provides more accurate ROI estimations than traditional methods, more accurate sales and revenue forecasting, and a more comprehensive understanding of the impact of all marketing tactics.

In a complex and competitive marketplace, data-driven decisions are crucial for optimizing marketing spend and achieving better business outcomes. A Bayesian approach offers a valuable tool for gaining a comprehensive understanding of the impact of marketing tactics and making informed decisions about resource allocation.

Keen to learn more? Request a demo model

 

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Navigating a cookieless world: challenges and opportunities for marketers

by BlogSuccess Stories

Cookies were created to improve the user experience of websites by allowing them to remember certain information about a user as they navigate the site. While cookies have provided many benefits for both users and marketers, concerns have been raised about the privacy implications of cookie tracking. In recent years, web browsers and regulators have taken steps to limit their use and protect user privacy, which has led to the development of alternative methods for collecting data and delivering personalized experiences.

In the past, cookies were a valuable tool for tracking users across devices and browsers, and for attributing conversions to specific marketing campaigns. However, with the rise of privacy concerns and the increasing use of ad blockers, cookies are becoming less effective and in some cases, unavailable. As the world moves towards a cookieless future, marketers are facing new challenges in understanding and reaching their target audiences.

The problem of attribution

One of the main challenges that marketers are facing in a cookieless world is attribution. Attribution refers to the process of identifying which marketing channels or touchpoints led to a conversion or a desired action by a user. Without cookies, it may be more difficult to track users across devices and browsers, and to attribute conversions to specific marketing campaigns or efforts. This makes it harder for marketers to optimize their strategies and understand which channels are most effective for reaching and converting customers.

In the absence of cookies, it becomes much harder to track a user’s behavior across multiple devices. For example, a user may browse a website on their laptop and then make a purchase on their mobile phone. Without cookies, it is difficult to attribute the purchase to the advertising campaign that led the user to the website in the first place.

Another challenge of attribution in a cookieless world is the loss of granular data. Cookies allow marketers to track user behavior at a very granular level, such as which pages the user visited, how long they spent on each page, and which actions they took. The loss of cookies makes it more difficult to track user behavior in such detail. This can make it harder to identify which touchpoints or marketing channels are driving conversions.

The loss of third-party data

Third-party data refers to data that is collected and shared by companies other than the one it is originally collected from. In recent years, there have been several high-profile breaches and privacy scandals that have led to increased scrutiny of this practice. As a result, many companies are now facing challenges related to third-party data loss.

One inherent challenges is the loss of valuable insights and intelligence. Third-party data is often used by companies to enrich and build a more complete understanding of their customers and target audience. This data can be used to personalize marketing campaigns, improve customer engagement, and drive revenue growth. The loss of third-party data can also have legal and compliance implications because many companies rely on it for compliance with regulations such as GDPR and CCPA. 

Another challenge of third-party data loss is the impact on advertising and marketing campaigns. Third-party data is often used to target advertising and marketing campaigns to specific audiences. For example, a retailer may use it to target ads to users who have recently searched for a specific product or who have demonstrated an interest in a particular category of products. The loss of this data can make it more difficult for companies to effectively target their advertising and marketing campaigns, which can lead to reduced effectiveness and ROI.

Effective alternative methods

With the disappearance of cookies, marketers will have to rely on other methods of identifying users and their behaviors. These include using first-party data, IP addresses, device fingerprints, and probabilistic models, which can be less accurate than cookies. In order to overcome these challenges, marketers will need to adopt new strategies and technologies. One of the most promising solutions is the use of deterministic identity solutions, which rely on user-provided information, such as email addresses or phone numbers, to identify and track users. 

Companies can focus on building their own first-party data by encouraging customers to opt-in to data collection and by offering personalized experiences and incentives. By collecting data directly from customers, marketers can gain a better understanding of their preferences and behaviors, and can target ads more effectively. They can also work to build more transparent and ethical data practices to ensure compliance with regulations and build trust with customers.

While the transition to a cookieless world may be a challenging time for marketers, it also presents an opportunity to reassess their marketing strategies and discover innovative ways to connect with customers. By embracing alternative methods and technologies, as well as building a more transparent and ethical approach to data collection, companies can continue to deliver personalized experiences and effectively target their advertising and marketing campaigns, while also prioritizing user privacy and compliance with regulations. With the right approach, marketers can successfully navigate the challenges of a cookieless world and thrive in the new era of digital marketing.

Want to hear how Keen can help?  Contact us today.

 

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Optimize your marketing spend with Keen

by BlogSuccess Stories

Marketing can be a challenging and often unpredictable field, which is why having access to reliable data and analytics is so important. That’s where Keen can help with our patent-pending Marketing Elasticity Engine that consists of informed priors by category, proprietary response curves, and short- and long-term decay rates. By combining our knowledge estate with your brand’s time-series data and prior ROI and lift studies, Keen is able to provide both a comprehensive historical analysis and future-looking marketing planning scenarios.

To achieve this, we take the comprehensive dataset and run it through our Bayesian regression model, which generates an output that includes model statistics and transparent priors. The use of Bayesian regression allows us to estimate the relationship between variables by incorporating prior knowledge or beliefs into the analysis.

Based on this output, Keen delivers your historical performance data, just like you would get from a traditional mix provider. However, Keen’s offering doesn’t stop there. We also run our machine learning predictive algorithm to build optimized marketing spend plans that consider your historic performance and projections on outside factors, such as distribution, category movement, price trends, and more. On top of each plan is a revenue forecast, which typically estimates within a 4% margin of error.

One of the strengths of Keen’s approach is its ability to pull levers to wargame scenarios based on your business objectives. This capacity empowers you to optimize current and future spend decisions. The always-on model means that the engine is available in the cloud, so you can run what-if scenarios whenever you want. 

As you execute your plan, Keen updates your knowledge estate to include the most recent data, which informs the prior in our model and offers real-time insights. This means you’re always up-to-date on the latest data and trends, giving you the necessary information to make data-driven decisions.

Overall, Keen offers a powerful and easy-to-use solution for companies looking to optimize their marketing spend. By combining your data with Keen’s knowledge estate and running it through our Bayesian regression model, you can gain a better understanding of the relationship between different variables and make informed decisions that help achieve your business objectives.

To learn more, request a demo model.

 

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How to optimize your future marketing spend with past and present data

by BlogSuccess Stories

In a competitive business and branding environment, one wrong marketing decision can sink a company. Or at least a stock price. In a perfect world, the better product should always win. But that’s not always the case. All things equal, the difference between a market leader and a follower is the marketing mix. No pressure.

Typically, as a brand marketer, you begin the planning process by taking a look at performance metrics from the previous quarter or year. Don’t get us wrong, that historical data is valuable and informative in its own right. But it’s just the tip of the iceberg for your marketing spend. What lies below the surface is a new dimension of marketing insight optimized through advances in AI technology and machine learning.

Marketing spend optimization in the face of unforeseen competitive and societal shifts

Let’s take a look at two fictional, high-end cooler companies. Both coolers look the same, keep drinks cold for the same amount of time, and cost the same. But, only one marketing team is able to respond to a real-time challenge. In this case, the government passes a strict tariff on raw materials essential to manufacturing. Margins collapse, Suits are sweating, and their departments are tapped to cut expenses.

First up, Old School Coolers. Marketing is legislated by the C-suite. They live in the past, desperately trying to predict future performance trends by accessing limited data on a quarterly basis. Their decisions are informed by what they did in their last crisis. And they scramble to identify which contracts they can cancel the fastest and with the lowest penalties. They have to wait at least another quarter for their data partner to give them new insights, Essentially, they’re alone.

Future Forward Coolers takes a different approach. Leadership believes marketers should not be blindfolded when planning for a crisis. By leveraging Keen, this team rose to the challenge. While planning earlier in the year, historical data was merged with outside data sources—trends and tactical performance metrics—to most effectively predict performance and profitability measures. With this foundational model in tow, periodic marketing mix checks were made throughout the year benefitting from Keen’s Elasticity Engine which continues to strengthen through the ingestion and analysis of contemporary performance and profitability data. So when the crisis hit, Future Forward’s team changed its parameters, ran new what-if scenarios, and delivered the adjustments needed to ensure their ROI remained consistent. The right questions were answered and the marketing spend was optimized.

What sets the two marketing teams apart is the use of advanced analytics to optimize performance and profitability; bridging the gap between marketing goals and financial data. Having access to a system of aggregated user data while simultaneously running future-powered and timely scenarios, can turn a good product into an unbeatable brand.  

Keen to know more? Contact us to see how real-life brands leverage data outside of their own to open up a new world of planning capabilities. Whether it’s once-a-year, once-a-quarter, or a once-in-a-lifetime crisis, we can plan for it.