Background
A large apparel retailer wanted to optimize its media strategy for a peak holiday sales period. In particular, it wanted to rebalance its spend back towards brand-focused channels as it knew it was too skewed towards performance-focused digital media, particularly paid search. This was part of a wider pitch by the marketing analytics team to shift the thinking of other stakeholders who had become overly focused on e-commerce at the expense of bricks-and-mortar stores that drove the majority of sales.
Solution
We used MMM to measure the sales period in question from the previous year to find out what had worked and what hadn’t. Specifically, we built a range of models that covered different product categories, online and in-store visits, and new customer acquisition.
We also trained the in-house team to use our decision-making platform Gain Theory Interactive. As well as being able to view the results of the MMMs and our recommendations, GTI includes a scenario planning capability that enables marketers to test what would happen to sales if they changed a wide range of investment parameters, such as media spend in different channels.
Results
Our initial analysis of the previous year’s media strategy revealed that while digital media delivered a higher ROAS than brand, they were investing in too few channels. What’s more, additional budget they had received to hit sales targets – and which they subsequently invested in paid search – was less efficient than if they had invested in a brand-focused channel.
Less than two months after receiving this analysis, they had implemented in-market decisions based on rigorous scenario planning in GTI. For example, they invested in a wider range of channels, including audio, OOH, and paid social. Ultimately, the new approach delivered $44.2m of additional sales compared to the previous year.
incremental sales